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Thursday, 11 April 2013
Castle Peak Mining looks to high grades as advances Akorade project
Developing small yet high grade deposits such as the Apankrah target area on the firm's Akorade project in Ghana is pivotal to the future success of Castle Peak Mining (CVE:CAP).
This target, which lies on one of the firm's nine concessions, is the company's current focus after a clutch of high grade results from drilling last year, including a 1.6 metre section with a whopping 296 grams per tonne (g/t) of the yellow metal.
That intercept was found on what is now called the Apankrah Shoot, which is a steeply dipping structure with an average strike of 100 metres, showing coarse visible gold open to in all directions.
The Apankrah Shoot is close to two additional structures - Nana and Scorpio - where high grade mineralisation has also been found.
Results from these three structures will be incorporated into the preliminary resource estimate, expected imminently.
Castle Peak has also identified a fourth structure through ground geophysics lying 250 metres to the south, which essentially mimics the geophysical characteristics of the Apankrah Shoot.
This series of parallel structures could potentially lead to Castle Peak's first small scale mining operation (amenable to open pit or underground), which the firm believes will have an average grade of more than 5 g/t, president and chief executive DarrenLindsay tells Proactive.
"We know through history that high grade leads to strong earnings," he notes.
"This is one of only a handful of high grade projects in West Africa. It gives us a competitive advantage as our margin is much higher. We're dealing with less tonnage so less rock has to be blasted and moved.”
"We expect it to be a very simple milling process given we are dealing with coarse visible gold, so it would be crush, grind, gravity and the rest is just straight leaching."
"I think it's kind of compelling that, in Ghana where the focus has always been on low grade, larger tonnage deposits, we are now seeing some smaller higher grade deposits emerge - and Castle Peak is starting to wrap its hands around one of them."
The proximity of the Apankrah Shoot to the Scorpio target also means an open pit mine development is possible, adds Lindsay.
The company's Akorade project covers a huge 225 square kilometres of the southern Ashanti gold belt, and within 50 kilometres there are five gold producers. This fact would be advantageous for any mine - once it’s up and running, says Lindsay.
"The average grade for producers in Ghana is in the 1.5 g/t range, which is why I believe there is potential here to push some small tonnage but high grade material to one or two of these currently producing mill facilities," he says.
In terms of news flow, the next big steps and therefore possible catalysts will be the Apankrah resource estimate expected imminently. The company is also working to get its samples moved out of Ghana to complete the necessary metallurgical test work, and anticipates results will take approximately four weeks from the time the sample shipments are approved by government officials.
The metallurgical results will confirm the recovery rate and move the company toward the completion a preliminary economic assessment.
Lindsay hopes news of the firm's first resource estimate will attract funding for the company, which is now in need of cash, having less than C$500,000 in the tank.
The cash injection is needed, moreover, because Castle Peak's exploits are about far more than just Apankrah. In terms of blue sky exploration, the company is very excited to be holding a considerable land position on two very large structural corridors, where exploration efforts have barely scratched the surface.
Castle Peak's goal is to create value by defining a pipeline of economic deposits focusing on strong grades.
"Staged development of the higher grade Apankrah area with eventual expansion to potentially larger deposits within our key structural corridors provides a solid strategy for increasing shareholder value over the long term. We believe this approach will attract the attention of our neighbours as potential strategic partners," the company said.
The most advanced of these is a north/south trending 12 kilometre gold-in-soil anomaly, which is immediately adjacent to the Apankrah target area, says Lindsay.
He believes Castle Peak's simple strategy for targeting such early stage high grade assets should mean people will start noticing the stock.
"We are completely undervalued for what we have so far, and if you don't believe me, wait and do your own evaluation on the upcoming resource estimate," he says.