APAPAM CONCESSION, Ghana – Gold Mountain on the Kibi. The British worked this mound of dirt hill in the late 1800s and perhaps earlier.
Gold Mountain might not amount to more than a hill of beans in a structural geologist’s search for the “event” or “zone” that sources this region’s granitoid-hosted gold. “We still find free gold there. I think it is definitely in the ball park,” says Xtra-Gold Resources’ James Longshore.
Mr. Longshore is leading a group of Ghana geologists and prospectors across the Apapam Concession, some 2 ½ hours drive from the capital of Accra. He is the CEO of Xtra-Gold (OTC:BB: XTGR, Stock Forum), a West Africa gold prospector that might follow in the footsteps of successful Ghana companies Keegan Resources (AMEX: KGN, Stock Forum) / (TSX: T.KGN, Stock Forum), Perseus Mining (TSX: T.PRU, Stock Forum) and Red Back Mining (TSX: T.RBI, Stock Forum).
Mr. Longshore, after five years of cultivating his small company in this greenstone belt of lush Ghana, is bringing in a noted structural geologist. Robert J. Casaceli, also the chief geologist of royalty maven Franco-Nevada, just sized up Apapam. He did it even before Xtra-Gold begins its second round of (diamond-tip) drilling in July.
Small prospectors often spend millions trying to show with hard data, maps, intermagnetic surveys and geophysical exams that their ground – in Ghana, in Peru, in Colombia or Burkina Faso – contains economically-viable gold. Then, when investors continue to sniff at the results, however good they are, the company’s board pulls out its collective hair and eventually approves options and/or cash to pay a structural geologist to show the larger potential of a concession.
Not so with Xtra-Gold. This is why we at Ticker Trax believe the over-the-counter-listed company has set itself apart from many of its peers in the search for gold resources.
At Kwabeng Camp in Ghana, the dynamics of the Kibi Gold Belt could make Xtra-Gold Resources (XTGR) a vehicle for profit in a country of red saprolitic soil, granitoid-hosted deposits and rich shear-
zone structures.
“The gold in the Kibi, just as it is in the country’s three other belts, the Ashanti being one of them, is located on northeast-rending shear zones,” Mr. Casaceli tells me on the heels of his mid-April (and my late April) visit to Xtra-Gold’s properties.
At age 61, Mr. Casaceli of Franco-Nevada (TSX: T.FNV, Stock Forum) says he has seen nearly all of the world’s major gold belts. “In the Kibi, you have the same type of mineralization as you do at the other major Ghana gold belts. It is also similar to what Newmont (NYSE: NEM, Stock Forum) had on the Carlin Trend in Nevada and at Battle Mountain – sulfide dips in between or alongside thick crustal sources. This is exactly what the Kibi has there on the northeast side of Xtra’s properties. I think we will see structures on both sides of the Kibi mountain range (actually called the Atewa range).”
Bob Casaceli, a paid consultant to Xtra-Gold as of March or April 2010, postulates that Xtra-Gold’s Apapam concession, already having shown good to very good granitoid-hosted gold grades, could have a shear-zone structure that runs through a large swath of the company’s property, according to IP electricity surveys. “We require some more geophysical,” he tells me, “but based on what (in-house exploration chief) Yves Clement already has done on the intersects (from the 68-drill-hole program of 2008 and 2009), we could have a situation here that shows considerable ounces.”
(Pleasesee ourStockhousereport from Ghana:Prospector’s Perseus Heights.)
Mr. Casaceli, who today (Monday) is off to a Colombia gold prospect on behalf of another company, concedes he, Mr. Clement and Mr. Longshore require more geophysical examination of cross structures before he and others zero in on what he says is the source of the region’s granitoid-hosted gold. On tap: induced polarization geophysical surveys – also known as resistivity surveys.
“It is pretty obvious to me that what Yves (Clement) and Jim (Longshore) are well on their way toward showing one million to two million ounces in the granitoids, on the flanks of this tectonic mass where you have had the melting. This is where they are showing it in their first (68) holes and in the next drill program coming up – where the geochemistry is best at the cross structures,” he says.
Such a bottom-line gold resource of two million ounces in this easily accessed region of gold-friendly Ghana theoretically would move Xtra-Gold higher in the comparative rankings of West Africa gold prospectors. Mr. Casaceli says his interest in Xtra-Gold is similar to what stokes him about Nevada, where he resides.
“Just like in north and central Nevada, with the magma and the melting you get in this kind of shear-zone structure, the resource at Apapam could grow quite considerably,” he tells me. “Structural geology tends to turn people off … people not familiar with geochemistry or the history of how plates formed on our planet.”
Side note: This past week we ran into an illegal alluvial operation, just outside the village of Apapam but on Xtra-Gold property. (Please see Thom Calandra photos here.) Mr. Longshore is negotiating with local contractors regarding alluvial operations that bring wildcat operators into his company’s fold. Then, the joint and legal operators comply with EPA environmental guidelines for streams, rivers, pits and back-filling of those pits.
Local and illegal operations in Ghana often ravage landscapes, as seen in top two photos. “Look, everyone these days is making money off the gold price and growing steadily, so they can afford excavators like these (two) Caterpillars here,” says Mr. Longshore. He estimated this operation, with five mechanical “prospectors,” could produce 100 ounces a month and perhaps more. “If this one continues, the local chief here, sure, he is providing work and income for his people, but it keeps growing and growing and the land suffers.”
As it turns out, a day later (this past Friday), one of Xtra-Gold’s employees, local prospector J.K. Mine, ascertained the illegal operators were having little luck at the site. Xtra-Gold’s Mr. Longshore and his team are discussing a feasibility plan for at least two lease areas for alluvial gold at its Kwabeng Concession. This is where Xtra’s mining camp of about 50 people is.
One of the people who visited camp and have agreed to “prove up” alluvial is Ghana’s best known alluvial consultant and once a full-time Xtra-Gold geologist, Kofi Agyemang, a Ghana native. In addition, one of the area’s largest mining contractors for small-scale and government -sanctioned lease mining in and around the Kibi Gold Belt this past week was negotiating details with Mr. Longshore about a partnership for Xtra-Gold’s properties.
“Look, in our outlook, we are a hard-rock prospector,” Mr. Longshore says. “But hey, we already put out (in 2007 and 2008) 8,000 ounces of gold from our (floating) wash plant on the Kwabeng (seen in photo on Awasu Creek: J.K. Mine at left, James Longshore at right of photo). I think if we see gold continue its strength, we have a responsibility to shareholders to get some value from what we see as reliable sources of alluvial at our properties in the Kibi. We also have a responsibility promoting a safe and sound methodology for what could be a run of galamsey (illegal) miners to this area.”
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THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch and MarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold in 1999 and in 2000. He has been covering life-sciences and natural resources since 1988.
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