Volta Resources, which came into existence through the merger of two juniors active in West African gold exploration, Goldcrest and Birim, is better placed than many of its peers to survive medium term effects of the credit crunch that has swept across the world and it is looking for acquisitions. At the end of October the TSX listed company held some US$10 million in cash and marketable securities, sufficient to keep it going for some 18 months, though it means exploring at a slower rate than previously planned, according to its president and CEO Kevin Bullock. A mining engineer by background, Bullock has been involved in West Africa since the mid-1990s. He was general manager of Iamgold, which discovered the Sadiola deposit that led to AngloGold Ashanti starting operations in Mali, and in 2002 he founded Goldcrest. He says that at the moment it is cheaper to buy than find projects by means of greenfields exploration. And the three countries he particularly favours are Ghana, Burkina Faso and Mali.
“The formation of Goldcrest gave us the opportunity to get into Burkina Faso,” he tells Mining Review Africa. The company owned the Youanmi mine in Australia, a past producer, which it sold and used the cash to expand its position in West Africa. “We also wanted to go back to Ghana, but when we looked for properties we found nothing available. We looked for an opportunity to do deals.”
Bullock had been following Birim Goldfields’ activities in the Bui gold belt in Ghana, a gold belt he believes is underexplored because of its distance from the coast and the higher focus on Ghana’s more famous gold belts. Those are the Ashanti gold belt, which has produced resources of over 127 million ounces, and the emerging Sefwi-Bibiani gold belt that has seen some 22 million ounces discovered. He had been friends with Victor King of Birim for many years, who is now COO of Volta Resources and was part of the original Tarkwa project’s management team. Bullock also liked Birim’s good ground position in Ghana. Birim however was cash strapped so the merger was agreed to.
Volta Resources now holds 29 projects in Burkina Faso and Ghana, too many to move along on its own and Bullock says it has been suggested that as a result the company is too thinly spread. In late October 2008 its landholding was some 5,000 km2 in Ghana and Burkina Faso, with about a 50/50 split between the two countries. However, Bullock says the project spread gives Volta a better chance to make decent discoveries. The plan is to take the top four to six projects among the 29 up the value curve, drop the bottom four to six and joint venture the remainder while retaining earn-in potential. Unfortunately, a deal that was about to be finalised in October, with another junior agreeing to an earn-in option on a large number of those properties, fell through because of that junior’s inability to raise funding.
Of Volta’s top priority projects, Bullock says Tinga tops the list with its Far East gold deposit. This project is located in the Bui gold belt and the company has registered a NI43-101 open pittable resource of 232,000 gold ounces at 3.5 g/t. The resource occurs at above 75 metres below surface and the deposit is open at depth and along strike. “While it is a small resource, the significance is that we can now say there is gold in the Bui belt. Having confirmed there is gold at Tinga we believe we will find a lot more.” The company will drill some deeper holes next year in order to generate a revised NI43-101 resource statement. If the current market environment persists Volta plans to spend US$4 million on its properties in 2009.
Next in the priority list is the Gaoua copper-gold porphyry property in Burkina Faso. This project represents a large landholding of 750 km2 and the strike extension of the copper mineralisation is over 35 km. The property has large tonnage potential and consequently drew in Free Freeport McMoRan as a partner, with the latter agreeing to undertake US$5 million worth of exploration over three years on the project. It has done US$2.6 million worth of work over two years, though it has slowed down work on this project. Bullock would not see it as an adverse development if Freeport, having invested thus far did not meet its full requirement and its share reverted to Volta Resources.
The Gaoua project which is located in the south-eastern part of Burkina Faso near Cote d’Ivoire and Ghana has seen some 25,000 metres of large diameter diamond core drilling. “We have hired a third party to undertake a NI43-101 resource definition and we expect this by the end of the first quarter of 2009,” Bullock says. “It is a large system and we control a large tonnage open pittable potential project where economically mineable intersections have been made over 15 km of strike.”
It would need to be a large deposit to justify the large scale investment required to start a copper project in the area. But water is not an issue with the site some 20 km from the Volta River and there is a proposal in place for a hydroelectric scheme by the World Bank. The Gaoua project would help move that initiative forward.
With management at Volta having mining experience the group is better placed than many other juniors as it can negotiate from a stronger position in buyouts because it has some ability to potentially go it alone. But Gaoua, in particular, is the type of project that Volta Resources would seek a partner for, not having the people or knowhow to develop it itself. “If we were to develop a project ourselves it would be in the range of a 50,000 to 200,000 ounce a year gold project.
The Chert Ridge prospect on the Cluster property on the Bui belt in Ghana is next on Volta’s priority list. It features a 12 km long soil anomaly with four distinct high grade centres. Two zones have been identified with a total 700 metres of strike. To date only RC drilling has been done to 50 metres vertical depth and this has achieved good intercepts at grades above 2.5 g/t. This bodes well for a near surface resource. It appears as if the pearls on string effect is in play here and drilling to date has indicated this. A further drilling campaign is planned with the aim of achieving a NI43-101 resource by the final quarter of 2009.
Another priority project is Kampti in Burkina Faso, in the southern part of the country to the north of the Ivorian border. It is a 250 km2 property with some 10,000 artisanal miners on site. “The geology is complex and we have found some 60 gold veins and veinlets in a 9.0 km2 area. A first pass of drilling was undertaken prior to the merger, and now King will test his model with a second campaign in the first quarter of 2009.”
The company has purchased an auger drill, which enables it to drill at US$3/metre and test targets on topographies where no outcrops occur and soil sampling is not valuable. Such an area is Volta’s Titao project in northern Burkina Faso where, while there are no outcrops, small artisanal operations have been able to breach the cap and find gold. Some US$175,000 was spent on the drill which will carry out this exploration and take geochemical samples.
Volta Resources has a decent legacy in West Africa, with Birim having been in Ghana for the past 15 years and Volta has a 30 person team there. It also has a thirty person team in Burkina Faso where it has been present for some seven years. Out of the 60 people only one is an expatriate.
Bullock says that the merger that saw the formation of Volta Resources is only the first step and believes that under current circumstances there has got to be consolidation of the numerous fractured and cash strapped small projects. He envisages Volta involved in paper deals with cash strapped juniors, where Volta can take projects further, and of course such deals will only be done provided such projects are accretive to its value and project portfolio.