It’s a long way from the salad days of 2011 in the gold mining sector when Castle Peak Mining Ltd (CAP.V) went public and saw its valuation quickly move up to C$80 million without a single drill hole completed at its Akorade Project in Ghana. Like many companies in the gold exploration and mining sector who went public during the 2010-2012 market period, the last few years haven’t been good to shareholders of Castle Peak:
CAP.V (Monthly – 5 year chart)
Castle Peak is focused on the Akorade Project in Ghana, Africa’s premier gold mining country. The Akorade project is located in southwest Ghana, in the southern portion of the Ashanti gold belt. This prospective land package encompasses ~225 square kilometres, lying within 50 kilometres of a number of current (4) and past producers (2) accounting for nearly 50 million ounces in gold reserves and resources. Located around the main highway between the port of Takoradi and the mining centre of Tarkwa there is established mining infrastructure due to the proximity of the multi-million ounce producers including access to the national power grid.
Map of Ashanti and Sefwi-Bibiani gold belts in Ghana with major gold mines (circa 2014)
After surviving through the extremely challenging environment of the last 3 years in the gold mining sector, Castle Peak is committed to moving its Akorade Project forward to delineation of an economic gold resource and eventually to either a production decision or a takeout.
Castle Peak had encouraging drill results from its 2011-2013 drill programs with highlights including 6.0m of 80 g/t Au, incl. 1.6m of 296 g/t Au and 9.8m of 6.8 g/t Au incl. 1.0m of 51.8 g/t Au from the Apankrah Deposit. The plan is to refine high priority gold prospects that have been defined through systematic review of geophysical surveys, regional geochemical surveys and in-field reviews in order to define and prioritize high probability drill targets for later in the year.
We had the opportunity to connect with Castle Peak President & CEO Darren Lindsay to hear about where Castle Peak is at right now and his plans for the next 12 months.
CEO Technician: Tell us about Castle Peak, some of the company’s history and its current plans.
Darren Lindsay: We listed in March 2011 with a strong land package and a good set of backers, which i believe drove the initial interest in the Company resulting in a strong market valuation given we hadn’t yet undertaken an exploration program on the properties. We were able to fast track a couple of prospects to the drilling stage and then just as our first drill results came out the market was starting to pull off. However, the drilling that we did early on (2011 and 2012) identified a small high grade deposit so we’re looking at about 76,000 ounces grading at about 8 grams per tonne. A double or triple of that resource could easily be a feeder pit to any one of the mines around us.
We are well located in the southern part of the Ashanti Belt; Endeavour Mining is to the west of us, immediately to the north of us is AngloGold Ashanti, and to the northwest of us are Gold Fields and Golden Star Resources. We are essentially surrounded by producers and our drill holes (the roughly 60 holes in only three prospects that were drilled by Castle Peak between 2011 and 2013) are the only ones on the property. So we’ve got 225 square kilometers of what is essentially brownfields ground that hasn’t seen much work until Castle Peak came along.
CEO Technician: What’s your plan for the rest of the year and how does Castle Peak move Akorade closer to the monetization stage?
Darren Lindsay: In 2014 and 2015 we completed a fair amount of targeted prospecting work and we’ve identified a number of what we call high potential targets. There’s still more to look at, we’ve got about 50 anomalies that we get to ‘move up the ladder’ so to speak.
From the 2014 and 2015 prospecting programs we have prioritised 5 or 6 areas that we would like to go back in and do augur sampling, they’re essentially soils at 4 meters depth so you get a really good sample of what’s underneath. And with those anomalies holding together we will get a better idea of where we want to put our initial drill holes. It’s a fairly low cost program, it’s around 250-300 samples costing roughly C$75,000 to work on these 5 or 6 targets. From this we will be able to prioritise the prospects and determine where we want to put our initial drill holes.
CEO Technician: Have you started this sampling program?
Darren Lindsay: Yes, we’ve done about 50 samples and we’re waiting until closing the placement (C$500,000 private placement) to continue with the rest.
CEO Technician: How sensitive are your plans to gold price fluctuations?
Darren Lindsay: Our objective is to identify a near surface resource that can be profitable below US$1200/oz. We have done our work to identify these lower cost, bulk mineable type of targets right on the road to Nzema (Endeavour Mining’s Nzema Mine) so there’s very little that we will need in terms of infrastructure. A higher gold price environment is always better for everybody but our objective is to continue to identify these higher grade near surface targets that are mineable where we can just load up the ore into the truck and take it to the closest mill for processing.
CEO Technician: How far away are the closest mills?
Darren Lindsay: The Nzema Mine averages about 30km, from our current set of prospects, and the Iduapriem Mine is about 25km.
CEO Technician: What are your objectives for the next 12 months and can you give us a rough timeline of what investors should expect to see from Castle Peak?
Darren Lindsay: We are currently in a small capital raise which will be used to prove up and prioritize our key prospects to drill ready, then we will look to raise some money for drilling 3-4 months out and begin drilling in the dry season. With successful drilling we would do follow up and build a resource from there. Once we close this financing in early July we will look to get sampling results back from the lab by mid-August to early September. And once we’ve received sample results back and added them into our understanding of the prospects we will want to begin to pull in drill dollars for the highest probability targets.Our objective will be to begin drilling in September/October at the beginning of the dry season.
Castle Peak has a tremendous opportunity for exploration success in one of the most prolific gold mining belts in Africa. Ghana also offers a stable government system with a favorable mining and tax code. Moreover, Ghana is equipped with excellent infrastructure and a readily available and well trained labor force.
With even modest exploration success Castle Peak shares could see significant upside from the current depressed levels simply due to the company’s geographic position in the heart of Africa’s best and most stable gold mining region. Moreover, if Castle Peak is able to add some additional ounces from these new prospects and further prove up some of the Apankrah resource that was outlined in the 2011-2013 drilling, Akorade could become a very attractive high-grade, near surface project that would become an obvious takeout for one of the mid-tier/major gold miners already operating in the area.
We would like to thank Mr. Lindsay for his time and we look forward to hearing more from Castle Peak over the coming months.
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Castle Peak Mining is a high-risk venture stock and not suitable for most investors.. Consult Castle Peak Mining’s SEDAR profile for important risk disclosures.
EnergyandGold has been compensated to cover Castle Peak Mining and so some information may be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
This article contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, standard transaction risks; impact of the transaction on the parties; and risks relating to financings; regulatory approvals; foreign country operations and volatile share prices. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.