African Gold Group (AGG.V) has announced an updated resource estimate for their Kobada project in Mali. The new resource estimate came in at 2.3Moz gold in the measured and indicated categories and 540koz in the inferred categories using a 0.3g/t cutoff grade. The average grade of the resource update is approximately 10% higher than the previous grade thanks to the leach well tests which give a better indication about the nugget-effect of the deposit. This higher average grade and longer mine life will increase the economics of the project, and the company expects a feasibility study by the end of next year.
Drilling extended the strike length from 1700 to 3200 meters, and there is still considerable potential to increase the amount of ounces at depth and along strike. If Kobada would be in any other country than Mali, the value of the company would have been much higher as investors still aren’t feeling comfortable with assets in Mali.
African Gold Group had only C$600k in working capital at the end of March, so we expect they will have to raise more money soon.
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Disclosure: The author currently holds no position in African Gold Group. Please see our disclaimer for current positions.
