Today, Golden Star Resources, the extremely well-positioned developer of gold that is focused in Ghana at the Bogoso/Prestea and Wassa/HBB open-pit mines, essentially the largest land package in this prolific region, offered a report on results from drilling at the Wassa mine, which consisted mainly of quantifying the higher grade shoots beneath the main pit floors:
B Shoot Pit (operating)
59.4 feet grading 32 g/t, 31.5 feet grading 3.2 g/t, and 18.4 feet grading 11.9 g/t
SE Pit (operating)
57.7 feet grading 2.9 g/t, 84.3 feet grading 2.8 g/t, and 1404 feet grading 1.7 g/t
Continued exploration of Wassa has proven to be very fruitful indeed and while some observers have viewed Wassa’s mine life as limited, the operational/exploration teams who have been working the deposit on this acreage for years now have a better sense of the true potential.
President and CEO of GSS, Tom Mair, pointed to the ongoing resource delineation and the success of the drilling program, emphasizing how it has also unlocked a clearer view of the true long-term potential of the Wassa. Mair outlined the resource modeling work slated for the second half of this year and explained that as the portrait of the full potential of Wassa is unlocked, the company would be there with the logistical muscle to produce.
VP of Exploration for GSS, Mitchel Wasel, elaborated on the quantification afforded by recent drilling at the at B Shoot and South East pits, explaining that the continuity of the higher grade zones was really being mapped out here nicely. Wasel said that GSS is building up substantial volume in these areas and results coming back from interim modeling/optimizations being conducted in-house by the exploration team are very positive, with the deeper mineralization looking economically viable and anticipation high that further drilling will boost confidence in the inferred resource.
A breakdown of significant highlights from operations is as follows:
Q1 2012
• Some 23.95k feet of drilling in 24 holes via two rigs
• Targets were set to define higher grade interval hit upon last year at B Shoot (reported this Feb 6)
• The 59.4 feet grading 32 g/t from hole BSDD113 was a step-out from another hole (69.6 feet grading 15.8 g/t) and the configuration amply suggests a cluster of mineralization (open on strike and grading down dip)
• Parallel zones of gold mineralization in the foot/hanging walls have potential to lower overall stripping ratio, making the option that much more profitable
• SE zone (which runs parallel to the B Shoot, some 656 feet east of the high grade intersection in BSDD113) also returned averages higher than the modeled grade and large halos of lower grade mineralization between the SE and B Shoot should help improve stripping costs roundly
With Q2 drilling slated for the entire fold hinge area (164 foot spacing) to produce an inferred resource for the main Wassa area for the second half of the year and intentions to go forward with that model for all site mineral resource categories (measured, indicated, and inferred), GSS is clearly putting down further foundations in Ghana. Against the backdrop of other emerging Ghana interests, the currently inactive (81% interest owned) Prestea Underground mine, as well as other operations in Brazil, this move to further define and expand operationally in Ghana looks like a very shrewd move by the GSS management indeed, especially as the global gold market starts to really heat up.
Gold accumulation by central banks is a clear reality (439.7 tonnes of gold bought by central banks in 2011) and the scale of easing by western central banks recently has forced aggressive shielding, with the tally on Hong Kong gold imports into China in February rising by as much as thirteen times from the same period last year. In fact, China has brought in some 436 tonnes of gold via Hong Kong in the last eight months (compared to only 57 during the same period last year), an annualized implied demand of 568 tonnes in a market that produces only roughly 2,810 tonnes per year of physical metal.
Indeed IMF projections show that central banks will buy some 700 tonnes this year alone. Consider the implications of this in a market where physical demand is difficult to ramp up and a third round of quantitative easing looks like a foregone conclusion (just ask Bill Gross over at Pimco, who is holding massive amounts of US mortgage debt and banking on QE3). In such a market, GSS shareholders are holding all the cards really, riding a surge that, while it may suppressed at times, shows no real signs of slowing down.
Full details of the Wassa drilling results, as well as more information about Golden Star Resources Ltd. can be found at the company’s website: www.GSR.com
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