Newcore Gold is advancing its Enchi Gold Project in Ghana. Can you highlight why Ghana is such a favourable jurisdiction in Africa? What are the benefits of operating in the country?
Ghana has become a preferred mining jurisdiction within Africa for both major gold miners as well as contractors. Ghana, also known as the “Gold Coast”, has a very long history of gold mining with evidence that gold mining dates back centuries. It is Africa’s largest gold producer and the sixth largest globally, having produced over 4Moz of gold in 2023.
Ghana differentiates itself from its neighbours due to the stable political environment, safety in-country, a legal system that is based on English common law, and strong infrastructure in-country.
It has a pro-development and democratically elected government with mining an essential part of Ghana’s economy and tax base. This has been highlighted by a stable history of mining tenure, royalty, and tax laws.
Ghana has modern infrastructure compared to its African counterparts, including a strong network of roads and highways as well as electricity and mobile networks across the country.
The country is a primary hub for many mining contractors, such as Geodrill (a drilling contractor) that operates a ‘hub and spoke’ model with their primary work facility in Kumasi-Ghana serving as the hub for their operations in Africa and South America. Ghana also has a highly skilled and trained mining workforce at all levels of operations with the industry being supported by two mining schools in-country.
With a long history of large-scale gold mines in the country, several senior gold producers operate in-country such as Newmont, Gold Fields, and AngloGold.
Ghana is home to four of the top 10 gold producers, including Newmont, AngloGold, Gold Fields, and Zijin. What do you think attracts majors to the country?
West Africa, and specifically Ghana, has a very impressive record of mines being built on time and on budget along with the opportunity for large-scale long-life mines. This is an attractive quality for major gold miners when they are assessing which projects to advance within their pipelines or when looking at M&A targets.
Ghana is pro-development and is growing its gold production base with two meaningful projects coming into production: Shandong’s Namdini mine was commissioned in November 2024, anticipated to add approximately 370,000oz of annual gold production; Newmont’s Ahafo North expansion is targeted for first production in the second half of 2025, adding approximately 300,000oz of gold per year.
M&A has a strong track record in Ghana as well. Most recently, Zijin announced the acquisition of the Akyem Mine from Newmont for total consideration of US$1B. This has added a fourth senior gold producer in-country. Newmont’s Ahafo project is the company’s second largest mine within their global portfolio as the company invests an additional ~US$1B to grow the mine with the Ahafo North expansion, expanding production at the Ahafo complex to ~850,000oz annually.
The strong presence of senior miners, along with large-scale gold mines in-country, and a pro-development government all continue to highlight why Ghana is a star amongst its country-peers on the continent.
Newcore is advancing its Enchi Gold Project in Ghana. What makes the project so attractive for investors?
The preliminary economic assessment (PEA) study completed in mid-2024 highlighted the robust economics at Enchi and the opportunity to build a mine with strong cash flow leverage to the rising gold price environment. The PEA provided a base case assessment of developing Enchi as an open pit, heap leach operation processing 8.1Mtpa utilizing contract mining. At a gold price of US$1,850/oz, the PEA generated an after-tax NPV5% of US$371M and after-tax IRR of 58%; at a gold price of US$2,350/oz the PEA generated an after-tax NPV5% of US$632M and after-tax IRR of 92%. Initial capital costs were estimated at US$106M. Average annual gold production of ~122,000oz over a nine-year mine life.
The PEA economics warrant advancing the project towards a pre-feasibility study (PFS) and ultimately taking the project towards a construction decision. The added attractiveness of the project lies with the district-scale exploration potential. The Enchi Gold Project spans a total of 248km2 and has over 25 targets identified across the property which provide for strong resource expansion as well as additional discovery potential. Enchi stretches along more than 40km of the Bibiani Shear Zone, a prolific gold belt in Ghana that hosts multi-million-ounce gold mines including Asante Gold’s Bibiani and Chirano mines as well as Newmont’s Ahafo mine to the north. Of the 25 targets identified to date, only five have currently defined resources with all deposits remaining open along strike and at depth.
Newcore has also started to define higher-grade structures at depth, with longer-term growth potential from the deeper sulphide mineralization that remains largely underexplored given the limited drilling completed beyond a vertical depth of 200m.
Enchi is underpinned by strong economics outlined in the PEA with longer-term potential for growth from the district scale exploration that is largely untapped to date.
Newcore is conducting a fully funded 10,000m drill programme at its Enchi Gold Project. What have been the key takeaways from the results released in 2024?
The Enchi RC drill programme that commenced summer 2024, is focused on infill and resource expansion drilling to support the continued advancement of the project. The drilling planned is targeting near-surface oxide and shallow sulphide mineralization with the goal of infill drilling for resource conversion to improve the confidence level of the existing Mineral Resource Estimate (MRE). Drilling is the next critical path item for advancing Enchi towards a PFS.
In 2024, a total of 3,398m in 21 holes were reported from drilling completed at the Boin deposit (one of the five deposits hosting the MRE at Enchi). The first set of drilling focused on the central portion of the Boin deposit with the results highlighting both the strong potential for resource conversion of inferred resources to Indicated but importantly also the resource growth potential at Enchi.
Hole KBRC301, at Boin, was the highest-grade-metre interval intersected to date at Enchi, intersecting 204g/t Au over 1.0m from 59m, with a contiguous zone of 1.46g/t Au over 2.0m from 60m.
Drilling also encountered wide zones of higher-grade mineralization with hole KBRC307A intersecting 3.36g/t Au over 28.0m from 120m, including a high-grade intercept of 37.58g/t Au over 2.0m from 133m within a broader zone of 7.76g/t Au over 11.0m from 132m. Hole KBRC288 at Boin was also one the best intercepts encountered at Enchi to date. The hole intersected 1.96g/t Au over 62.0m from 139m, including 2.31g/t Au over 25.0m from 139m, and 2.23g/t Au over 28.0m from 171m which was intersected outside the limits of the pit that constrains the current MRE. Hole KBRC288 also ended in mineralization continuing to highlight the potential for resource growth at depth.
The results released in 2024 included some of the best results ever drilled at Enchi, with all drill holes intersecting gold mineralization, successfully proving the continuity of both gold mineralization and the potential for future resource growth. The current five resource areas all remain open both along strike and at depth, highlighting the opportunity to continue stepping out to add ounces. We are excited to be drilling and anticipate a steady flow of drill results in H1 2025 from the current drill programme.
Newcore released some strong metallurgical testwork results in 2024 which continue to highlight the project’s suitability to heap leach processing. What were the key takeaways from those results and why is heap leaching processing beneficial at Enchi?
An important aspect of continuing to de-risk the development of the Enchi Gold Project towards production is completion of additional metallurgical testwork. In December 2024 we released results from additional testwork completed at Enchi: An average gold recovery of 93.0% was achieved from column testwork completed on five composite samples from the Sewum Gold Deposit and two composite samples from the Boin Gold Deposit.
The recovery range across the seven column tests was 82.6% to 97.2%, with testwork completed on samples that had an overall average assayed grade of 0.56g/t Au (with a range of 0.32g/t Au to 0.84g/t Au). These additional results are consistent with prior testwork and continue to highlight the amenability of Enchi to heap leach gold recovery. These results also support the recovery assumptions used in the 2024 PEA of 81.8%.
Extensive testwork has been completed to date, with more than 400 tests including cyanide assays, bottle rolls, column tests, and bulk-scale pilot heap tests. Work to date has highlighted that Enchi’s oxide and transition mineralization is highly amenable to heap leach processing, with the majority of gold recovery occurring in the first 40 days of leaching.
Heap leach processing is one of the processing alternatives that can be utilized at Enchi, and on the back of the significant testwork to date, it has been determined as the most optimal path forward given not only the strong recoveries in testwork but also the lower upfront capital cost requirement to build a heap leach mine. The cash flow from a heap leach operation could ultimately fund the longer-term potential of building a mill to process higher-grade sulphide mineralization that we expect to be defined as we unlock the exploration potential at depth.
Newcore’s board and management have an 18% share ownership of the company, showing a strong belief in the Enchi Gold Project – what are some of the most valuable aspects of Enchi and Newcore you would like to highlight?
Newcore has a strong leadership team. Management and the board of directors have a proven track record and are aligned with shareholders through an ~18% equity ownership. Alongside insider ownership, the company also has a very strong shareholder base with ~45% of ownership held by institutional investors that recognize the significant upside potential that exists at Enchi.
Our Enchi Gold Project is a gold project with district scale exploration potential, underpinned by a PEA study with robust economics, and located in a top-tier mining jurisdiction that hosts numerous multi-million-ounce gold mines. We are excited about not only the development potential of the project, in a pro-development jurisdiction, but also the longer-term district scale potential that exists across the property. We look forward to continuing to unlock that value with advancement of the project towards a construction decision while also continuing to unlock value through concurrent exploration.
