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G. Joel Chury
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G. Joel Chury is a veteran investment columnist for Resource World Magazine and the Editor in Chief of VantageWire.com and author of the Bottom Line Report newsletter. His knowledge of both the mining and oil and gas sectors along with his ability to sift through TSX.V data and press releases... More
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  • Pelangio Exploration's Drive For Golden Game Changer In Ghana 0 comments
    Feb 29, 2012 11:13 AM | about stocks: PGXPF

    SOURCE: The Bottom Line Report via VantageWire.com - After delivering returns to shareholders of about 8,000% since the mid-2000s, Ingrid Hibbard, President and CEO of Pelangio Exploration (TSX-V:PX) (OTCPK:PGXPF) might be entitled to enjoy the fruits of her successes. But with five new discoveries on the Manfo Property and recent high grade intersections of11.94 g/t gold over 10 metres, 9.05 g/t gold over seven metres and 16.72 g/t gold over four metres, Ms. Hibbard and the Pelangio team continue to focus on their mission of finding major deposits on world class gold belts, this time in Ghana, West Africa.

    To bring you up to speed, the road to Pelangio's rapidly developing new successes in Ghana was paved by the successful 2007 spin out of the Detour Lake deposit in northern Ontario. That spin out went on to become Detour Gold (TSX:DGC) (OTCPK:DRGDF), now a $2.7 billion company developing a 15.6 million ounce gold reserve that is destined to be the largest single-source gold mine in Canadian history.

    Pelangio had already acquired a toehold in Ghana prior to the Detour Lake spin-off through Ms. Hibbard's relationships in Ghana. In 2006, the company had optioned a 290 km2 property beside the world's largest vein-hosted deposit held by AngloGold Ashanti. The high-grade Obuasi Mine has now produced over 30 million ounces of gold since 1897 and still hosts a further 29.5 million ounces of resource.

    Pelangio's developing relationships with the local communities, traditional councils and local and regional governments since 2006 and, in particular, a strong local team of geologists, led by Sam Torkornoo, Project Manager, provided further property acquisition opportunities. In mid-2010, the Company optioned the Manfo Property, which had been brought to the Company's attention by Mr. Torkornoo. A series of large geochemical anomalies sparked the interest of Warren Bates, Senior VP Exploration, and subsequent drilling programs identified five new near surface discoveries, with both significant high grade and bulk tonnage components.

    Pelangio is now drilling the Manfo Property's five discoveries to prove up their resource potential and actively seeking new discoveries on the remaining underexplored area of the property.

    HIGHLIGHTS:

    • Manfo Property - The Company Maker
      • Five new near surface discoveries with excellent potential for further discoveries on a 100% owned, 100km2 land package on the Sefwi greenstone belt
      • Exploration/discovery model based on neighbouring mines: Newmont's Ahafo (10M ounce reserve grading 2.54g/t) and Kinross's Chirano (2.43M ounce reserve grading 2.43g/t), each of which hosts a series of open pit deposits on significant strike lengths with upside potential for underground high grade deposits
    • Obuasi Property - The Potential Game Changer
      • 100% owned, 290km2 land package on strike and adjacent to AngloGold Ashanti's world-class high-grade Obuasi gold mine, which has produced over 30 million ounces of gold since 1897 and hosts a further 29.5 million ounces in reserves and resources in a series of 14 ore shoots
      • Exploration goal is to discover an Obuasi-style ore shoot, which grade over 7g/t gold at the neighbouring mine and hold up to 5 million ounces each

    Ghana - West Africa's Shining Light

    Pelangio holds an enviable exploration package for a junior totaling 550 km2 in Ghana, certainly the most stable country in West Africa and arguably the best blend of geology and jurisdiction in all of Africa. The country has held a series of transparent and democratic elections since 1992, with the most recent 2008 election being won by the challenger in a run-off, followed by a peaceful transition of power. With decades (or even centuries) of gold production and solid government institutions, Ghana has both the local infrastructure and social/governmental support to advance exploration successes to production. The potential for huge deposits is also world-class - likely no other country in the world has seen more 5 million plus ounce discoveries in the past twenty years. The majors have taken notice, with the list of those active in the country including Newmont, AngloGold Ashanti, Goldfields and Kinross.

    Manfo Property - The Company Maker

    Pelangio acquired an option on the 100 km2 Manfo Property September 2011. The Company has subsequently completed nearly 30,000 metres of drilling on the property, and is focusing on five new discoveries: Pokukrom East and West, and Nfante East, Central and West, as well as further targets that the Company is developing beyond the previously identified anomalies.

    The discoveries made to date at Manfo are all near surface and potentially open-pittable. So far the drill intersections are exactly what the company had been hoping to see, bulk tonnage values in the range of 1.5g/t over 30-70m, but also containing a number of high-grade discoveries near surface and at depth, including 36 g/t over 9 metres, 8 g/t over 12 metres and 14 g/t over seven metres at Pokukrom West, and 25 g/t over 5 metres, 16.7 g/t over 4 metres, 12 g/t over 10 metres and 9 g/t over seven metres at Pokukrom East. The potential for high grade deposits under bulk tonnage open pits is certainly on the Company's mind, particular considering the neighbouring producing mines.

    Due to its proximity, it's not surprising to see why Newmont's Ahafo mine is viewed as a comparable to Manfo. Located only 14km away, Ahafo is targeted to produce up to 600,000 ounces in 2012 at a low cash cost of approximately US$500/oz. The Ahafo resource grades 1.83 g/t, but this grade is significantly bumped by the growing underground resources currently being delineated. As is being proven at Manfo, Ahafo is a string of deposits along approximately 15 kms of strike, with serious underground potential being identified by Newmont, particularly at the Subika deposit, which is at the southern end of Ahafo, just northwest of Manfo.

    Today, Pelangio is at a much earlier stage. But the entire infrastructure required is local. The hydroelectric line servicing Ahafo runs through the northeast corner of the Manfo property, and the property is well served by paved roads, easy access to water and a huge mill at Ahafo only 14kms away. These factors give Pelangio significant flexibility going forward as they assess the economics on the project.

    Obuasi Property - Game Changing Potential

    Pelangio's 290 km2 Obuasi Property is one of the most intriguing exploration land packages in the world or, at least, as the Company states, the best exploration address in Ghana.

    The property is beside the Obuasi Mine, a 60 million ounce deposit, which so far has yielded 30 million ounces over the past 100 years. With another 30 million ounces in reserves and resources to go, AngloGold Ashanti is pulling gold out at a rate of 300,000 ounces annually.

    The Obuasi Mine comprises a series of 14 ore shoots, each averaging between three to five million ounces of gold each. AngloGold is currently building up resources at 15-20g/t, but very deep, and below current infrastructure. This comes after the original mine produced for 30 years at over an ounce per tonne from the late 19th to early 20th centuries. The opportunity to make high grade near surface discoveries that are mineable to great depths doesn't exist in too many places in the world any more, but Obuasi is one of the few remaining. Though it's a trickier exploration play, Pelangio's exploration for the next Obuasi-style ore shoot affords tremendous blue sky potential.

    Pelangio drilled just under 10,000 metres at Obuasi during 2011, with the best results received so far including 25 g/t over one metre, 11 g/t over two metres and 6 g/t over two metres. Importantly, these results are very similar to areas hosting ore shoots at the neighbouring Obuasi mine: quartz veins with visible gold in broader zones of arsenopyrite mineralization. More drilling is needed, but Pelangio looks to be on the road to discovery.

    The Bottom Line

    Pelangio's Manfo property is the company maker, at which Pelangio will build up resources and likely make a number of new discoveries in the coming months and years. Obuasi may need a bit more time to confirm a discovery, but the reward for a new high grade discovery beside the legendary Obuasi Mine cannot be discounted. Today, Pelangio Exploration provides the investor with two opportunities in Ghana: Invest in Manfo, Dream of Obuasi.

    G. Joel Chury
    The Bottom Line Report

    Click here for contact information

    Legal Disclaimer/Disclosure: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this Report should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. A fee has been paid for the production and distribution of this Report. The Bottom Line Report makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the Bottom Line Report only and are subject to change without notice. The Bottom Line Report assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.

    Themes: gold, west africa, ghana Stocks: PGXPF
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