Sarama Resources (SWA.V) has announced a maiden resource estimate at its South Houndé project in Burkina Faso. Using a cutoff-grade of 0.8g/t, the South Houndé project has 1.5 million ounces at an average grade of 1.6g/t. If a higher cutoff-grade of 1.2g/t would have been used, there would still be 1.1M ounces of gold at an average grade of 2.1g/t.
This maiden resource estimate is an important step forward for Sarama and as this resource estimate covers less than 20% of the mineralized corridor, there’s considerable exploration potential at South Houndé.
At the end of June of this year, Sarama Resources had a working capital position of $6.4M, so the company is currently trading at a EV/oz ratio of just $9, which is relatively cheap, given the fact Sarama is headed by a seasoned management team and has several other irons in the fire with exploration projects in Liberia and Mali.
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Disclosure: The author holds no position in Sarama Resources. Please see our disclaimer for current positions.
