Summary
- Reservoir Minerals announces its trenching program in Cameroon has confirmed wide-spread gold mineralization.
- This is good news and positions the company as a multiple asset play.
- The investment thesis won’t be impacted until a first resource estimate would be completed.
Reservoir Minerals (OTCPK:RVRLF) has announced an update on its exploration plans in Cameroon as it looks the company is trying to remind its (potential) investors that the company isn't solely depending on exploration success at the Timok complex in Serbia. The company hasn't been bragging about it, but Reservoir also owns several projects in Africa, and in the most recent update, Reservoir has put out some news on its projects in Cameroon.
The company has advanced the exploration work on its Bibemi project in Cameroon to follow up on interesting channel sampling results from 2 years ago, when the company discovered for instance 10 meters of 2.26g/t gold. During the dry season of this year, Reservoir dug not less than 95 trenches for a total of in excess of 3,150 meters to get a better understanding of potential mineralization. Fortunately, for the company, the trenches confirmed the earlier findings with almost 1/3rd of an ounce of gold per tonne of rock over 3.6 meters. Three mineralized zones have now been identified, and I would hope Reservoir Minerals decides to put a drill rig at work sometime in 2015 to drill-test these extremely interesting zones. I usually don't get too excited about trenching and sampling programs, but these results are quite encouraging. On top of that, Reservoir says there's some new gold panning activity going on which further emphasizes the potential of the Bibemi district.
Besides the exploration news, Reservoir also announced it was awarded the Wapouzé gold license in Cameroon. This land package is located just six miles away from the Bibemi zone and Reservoir now has the exclusive right to explore for gold during at least three years (and the exploration license can be extended twice for two years).
I fully understand all eyes in the mining world are focused on the Timok copper-gold project in Serbia which is (and will continue to be) the main value driver for Reservoir. However, the company definitely isn't a one-trick pony as it has several other irons in the fire. As Reservoir is very wellcapitalized with a working capital position of in excess of $35M as of at the end of August, its financial flexibility is much better than most of its competitors.