Please give a quick overview of Newcore Gold and its journey so far
Newcore Gold is advancing the Enchi Gold Project in Ghana. Newcore is well positioned given:
- Its strong leadership team – management and the board of directors have a proven track record and are aligned with shareholders through an ~18% equity ownership
- 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 an asset 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
Newcore was launched in mid-2020. Since then the company has significantly advanced the Enchi Gold Project with over 95,000m of resource expansion and discovery drilling; completion of a robust PEA in 2024 that highlighted the potential to build an open pit, heap leach mine with low capital intensity and strong leverage to the gold price; at a gold price of US$1,850/oz the project has a US$371M after-tax NPV5% and a 58% after-tax IRR, which increases to US$632M after-tax NPV5% and a 92% after-tax IRR at a US$2,350/oz gold price. Significant low-cost de-risking work has also been completed at Enchi, including metallurgical testwork, to continue to advance the development of the project towards a construction decision.
The company’s flagship Enchi project is located in Ghana. What makes Ghana such a favourable mining jurisdiction relative to its peers in West Africa?
Ghana is AAnglo Goldfrica’s largest gold producer and the sixth largest globally. Ghana, also known as the “Gold Coast”, has a very long history of gold mining with numerous large-scale gold mines discovered and a strong presence of senior gold producers in-country including Newmont, Gold Fields, and Anglo Gold.
West Africa has a very impressive record of mines being built on time and on budget. Ghana differentiates itself from its neighbours, notably due to the stable political environment and safety in-country. It has a pro-development government with mining as an essential part of Ghana’s economy and tax base. With two mining schools in-country, it is an exporter of skilled mining labour, as well as a primary hub for many mining contractors. Notably, over the next couple of years, Ghana will be growing its gold production base with two meaningful projects coming into production: Shandong’s Namdini mine is expected to pour first gold in late 2024, adding approximately 370,000oz of annual gold production, and Newmont’s Ahafo North expansion is targeted for first production in 2025, adding more than 275,000oz of gold per year.
The company began a fully funded 10,000m drill programme at Enchi in July. How is Enchi advancing and what makes it an exciting project?
Newcore commenced a 10,000m RC drill programme at Enchi this summer, 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. Drilling is the next critical path item for advancing Enchi towards a pre-feasibility study (PFS).
The PEA completed in 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 life.
Given the significant exploration potential that exists at Enchi, a subset of drilling will also focus on outlining resource growth on select zones, with all deposits and pre-resource targets remaining open along strike and at depth. Enchi covers 248km2 along a prolific gold belt that hosts multi-million-ounce gold mines, with the district scale exploration opportunity at Enchi largely underexplored and untested. Newcore believes there is a lot more opportunity to not only grow the resource base from the near surface potential that will have the potential to extend the heap leach mine life, but also to grow the resource base from exploration of the sulphide potential at depth. Enchi is still underexplored with the average vertical depth of the pits contained in the PEA only defined down to an approximate depth of 75m and the majority of drilling to date testing an average depth of only 125m. The gold mines that are located along trend with Enchi – including Asante Gold’s Chirano and Bibiani mines, as well as Newmont’s Ahafo mine – are defined in excess of 1km below surface, highlighting the strong longer-term potential to define additional resources at Enchi to depth. At Enchi there is a significant opportunity to continue to explore the deeper sulphide potential as well as the remaining near-surface targets across the property, while focusing on further de-risking and moving Enchi toward a PFS decision.
Newcore announced the first results from the 2024 drill programme at Enchi in early October. What were the highlights?
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 KBRC288 at Boin was one of our best intercepts 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 mineral resource estimate. Hole KBRC288 also ended in mineralization continuing to highlight the potential for resource growth at depth.
All drill holes intersected gold mineralization, successfully proving the continuity of both gold mineralization and the potential for future resource growth at Enchi. 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 back drilling and anticipate a steady flow of drill results over the next several months.
Gold repeatedly hit record prices this year, what have stakeholders gained from this? How do you see the market as we approach 2025 and what factors do you see driving future pricing?
Gold has seen a series of record prices in 2023 and 2024 which has led to substantial returns for investors holding gold as a hedge against inflation. With inflationary pressures high over this period due to geopolitical tensions and pandemic-related disruptions, gold has once again shown its safe-haven status and has been a very valuable asset within investors’ portfolios. Gold mining companies have also significantly benefited from higher prices, which has led to increased profitability. With inflation subsiding, resulting in operating costs stabilizing, combined with the surge in the gold price, it has widened mining companies profit margins making the investment case for gold mining companies much more attractive.
The outlook for the balance of 2024 and heading into 2025 appear very favourable, particularly if geopolitical and economic uncertainties persist. We would expect gold prices to remain elevated heading into 2025, driven by a mix of macroeconomic forces, central bank actions, and positive investor sentiment.
How does Newcore contribute to the local communities ?
Newcore has a strong commitment to the environment and community relations, with a priority of adding value for all stakeholders. The company is focused on continuous support of its local communities through initiatives and donations to support stakeholders. Recent initiatives have included supporting construction of a local sports field, donation of sports equipment as well as computers and supplies to local schools, renovation of a local school, fixing of bridges to provide better access for the local communities, and water well installation.
Community relations is an integral pillar to building a successful company. By adding value for all stakeholders we can make a lasting impact within our communities and an impact that creates benefits for the communities long-term.
What are the next steps for Newcore Gold and what can investors expect near-term?
Newcore will continue to have a strong focus on de-risking the development of its Enchi Gold Project. The company is focused on advancing the project towards a pre-feasibility study which includes drilling alongside completing other de-risking work such as hydrological, baseline, geotechnical, and engineering studies that are crucial to advancing the development of the project.
The company is well positioned to continue to advance the project. We completed an equity financing of C$5.5M at the end of September 2024, in addition to raising C$3.3M in proceeds from the exercise of warrants at the end of June 2024. The company continues to be well supported by long-term value focused institutional investors, along with its management and board of directors that hold an 18% equity interest in the company. Over the next several months, investors can expect results from the drill programme that is underway along with updates on the on-going development work such as metallurgical testwork results. Newcore anticipates having a very busy next year as we look to prove out the significant potential of our Enchi Gold Project in Ghana.
