Cardinal Resources has roots in West Africa that go back nearly 30 years, at a time when Nelson Mandela finally walked free in South Africa after 27 years of imprisonment on Robben Island. At this critical juncture in recent sub-Saharan African history, Archie Koimtsidis walked into West Africa with a motive to explore for gold across the highly prospective region. The Australian-born explorer and a few other Cardinal forefathers soon decided to refine their focus to Ghana, as it was English speaking and already had a relatively well-established mining sector at the time. “It was easier to go to the known rather than the unknown at that time,” explains Koimtsidis.
The team initially focused on the mature gold mining industry in the South of Ghana, which had seen production from a conveyor belt of gold mines since the turn of the 20th century and even earlier in some cases.
However, as part of its early regional scale exploration the company did set foot up in the North, discovering some colluvial gold and an outcrop in one particular location. Having seen this exploration potential, Koimtsidis vowed to return to the North at some point in the future.
Returning to the North
Staying true to his word, Koimtsidis returned to the underexplored Birimian terrane of Northeastern Ghana around 15 years ago, and spent the subsequent years building confidence in the region.
The geology underpinning Ghana’s Northern territory is more complex compared to the Southwest of the country, which has resulted in the majority of mineral explorers congregating in the latter region during the 1990s and 2000s.
However, armed with more sophisticated exploration tools, Cardinal has built a commanding land position in the Northeast, and is slowly reaping the benefits.
“There used to be this conception that there wasn’t any gold up in the North, due to a lack of understanding of the geology, but we saw colluvial nuggets close to the surface many years ago, so I begged to differ.”
Since these early sightings of gold, Cardinal has developed its Bolgatanga project, contained within the Paleoproterozoic Granite-Greenstone Belt in Ghana’s upper Northeast, close to the Burkina Faso border.
In fact, the closest large-scale producing gold operation is the Youga mine – a 2 million ounces (Moz) resource located in Burkina Faso and currently owned by Avesoro Resources.
Back across the border in Ghana, Cardinal enjoys access to a well-established infrastructure network surrounding the Bolgatanga project, which includes a sealed national highway, plus national HV hydro grid power and continuous water supply.
With a mining licence granted for 15 years renewable, Koimtsidis and co believe that Northern Ghana could well be a new frontier for gold exploration and mine development in the entire West Africa region.
The Namdini licence
The Bolgatanga project is comprised of four licence areas, with the Namdini mining licence the primary focus for Cardinal. Namdini was purchased in 2014 with exploration drilling commencing at the site over 2015 and 2016. However, it was not until this year that real progress began to take shape.
“We kicked off 2018 with a preliminary economic assessment (PEA),” says Koimtsidis. “Then a month later we updated the resource and then converted that into a preliminary feasibility study (PFS) in September. So, within nine months we have published a PEA and a PFS with a sizeable reserve in it.”
The PFS found that Namdini contains 4.76Moz of gold from a maiden probable ore reserve estimate of 129.6Mt at a head grade of 1.14 g/t gold, with a 0.5 g/t cut-off grade.
Key financial metrics in the study were based on a gold price of US$1,250 per ounce and included a post-tax NPV of $586 million and a post-tax IRR of 38%. All in sustaining costs were calculated at $769 per ounce for the life of mine and 1.8 years was the estimated total project payback time.
This large scale open pit operation will eventually produce 3,975,000 ounces of gold (approximately 125 tonnes) over a 14 year mine life, including 907,000 ounces produced from a 2.5 years long starter pit with an AISC of $599. Furthermore, Namdini remains open along strike and down dip, inviting the possibility of an extended mine life.
“One of the key strengths of Namdini is the fact that the processing facility is conventional. There is nothing complex in the processing and everything is off the shelf,” says Koimtsidis.
The PFS outlined a 9.5 million tonnes per annum (Mtpa) process flowsheet with a conventional crush-grind-float-regrind-CIL circuit and a gravity gold circuit designed for free gold. This process will eventually result in the production of gold doré bars on-site, a big plus for the company.
For Koimtsidis, the PFS is a significant step in the right direction at Namdini, and it gives the company confidence to progress with a definitive feasibility study (DFS), which has commenced and is anticipated for Q3 of 2019.
In addition to the DFS, Cardinal will also be focusing on district exploration next year. The firm’s land package at Bolgatanga totals close to 900 km² and provides significant exploration upside from three additional licence areas.
Around 20 km North of Namdini is the Ndongo licence area, where six large scale targets have been identified and subject to RC drilling, returning several shallow gold intersections.
In fact, one of these targets yielded a discovery in July 2018 at Ndongo East, after RC drilling returned significant gold mineralisation. Throughout the rest of the year, Cardinal extended the strike length at Ndongo East and received new drill results in the post-wet season.
These assays included intersections of three metres at 29.3 g/t gold from 45 metres and three metres at 4.1 g/t gold from 122 metres. Drilling will continue at Ndongo East after the conclusion of the 2018 wet season, with further results pending. But, one thing for sure is that Koimtsidis is encouraged by the results so far.
“The idea with this district exploration is to find some shallow high grade ounces that can be fed into the production facility to give it some extra NPV,” he says.
“If our exploration work discovers something bigger than just shallow pits, than that’s a good problem to have. The plan is to keep investigating these licences for further ounces.”
Possibilities in the South
Beyond Cardinal’s twin goals of publishing a DFS for Namdini and continuing district exploration across the Bolgatanga project, the company may also decide to recommence drilling at its Subranum project in Southern Ghana.
The 69km² licence straddles the Eastern margin of the Sefwi Gold Belt, an area that is densely populated with producing gold mines and processing facilities. Cardinal purchased the Subranum project from Newmont Mining and is currently in the process of evaluation ahead of a potential drill programme.
“There is a 5-7 km zone that is possibly mineralised within that license,” says Koimtsidis. “We need to do some more work on that in the new year.
“That could end up being a standalone project or something that gets shipped down to the other processing facilities further South or sold to some of those miners already with assets in the South.”
Finally, Cardinal will continue to work closely with the communities living in the shadow of its licence areas in Ghana over the course of 2019 and beyond. As a long-term resident, Koimtsidis understands the culture of Ghana, which helps inform the company’s understanding of what the communities want from an exploration/development company.
“We work together as a team and they assist us as much as we assist them to make sure that eventually a mine is built which provides jobs for generations to come. Our situation is a little unique. It didn’t start as Cardinal, it started nearly 30 years ago.”