Newcore Gold (TSXV: NCAU) announced significant drill results from its Enchi gold project in Ghana on Tuesday, highlighting robust mineralization at the Boin deposit. These results demonstrate continued potential for resource expansion as the company advances its exploration efforts in the region.
Key intercepts from the latest drilling include hole KBRC316, which intersected 96 meters grading 1 gram of gold per tonne, beginning at a depth of 100 meters. A particularly high-grade section within this hole returned 10 meters at 2.1 grams of gold per tonne. Additionally, hole KBRC313 revealed 81 meters at 1.1 grams per tonne, with notable high-grade zones of 17 meters at 2.5 grams per tonne and 7 meters at 2.2 grams per tonne.
The company’s 10,000-meter drill program is focused on upgrading 607,000 ounces of inferred resources at the Boin deposit to the indicated category. Located approximately 290 kilometers west of Accra, Ghana’s capital, the deposit lies within the Bibiani shear zone. Analysts have praised the drill results, confirming the continuity of the deposit’s mineralization, and reinforcing Newcore’s plan to develop Enchi into a low-cost, open-pit heap leach operation.
“These results, while largely confirmatory, demonstrate good continuity,” said Peter Bell, an analyst at Canaccord Genuity, in a note on Tuesday.
The Boin deposit is the second-largest at the Enchi project, containing 28.9 million tonnes at 0.7 grams of gold per tonne. According to Bell, the deposit shows significant potential as the project progresses along the “value curve.”
The 248-square-kilometer Enchi property hosts five deposits and over 25 untested exploration targets. Moving forward, Newcore plans to update its resource estimate and complete metallurgical testing. The company also aims to begin work on a pre-feasibility study later this year.
“This drilling not only builds confidence in the resource but also highlights the opportunity to increase gold ounces and develop a project with compelling economics,” said Luke Alexander, CEO of Newcore Gold, in a press release.
Canaccord Genuity has assigned Newcore a speculative buy rating, noting strong fundamentals and growth potential. The analyst has set a price target of C$0.90, significantly higher than the most recent bid of C$0.31 in Toronto. Over the past 12 months, Newcore’s share price has fluctuated between C$0.10 and C$0.39, with a current market capitalization of C$65 million (approximately $45.3 million).
The project’s scale continues to grow, with an updated preliminary economic assessment (PEA) conducted last April estimating the initial capital cost for Enchi at $106 million. The plan calls for a 9-year, 8.1 million-tonne-per-year open-pit heap-leach mine, with all-in sustaining costs projected at $1,018 per ounce. The PEA also raised Enchi’s net present value by 75% to $371 million and increased the internal rate of return to 58%, based on a gold price of $1,850 per ounce. The project is now expected to produce 121,839 ounces of gold annually, a 36% increase from previous forecasts.
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