Cardinal Resources – (ASX: CDV, Share Price: $0.445, Market Cap: $166m, coverage initiated @ $0.29 in June 2016 – current gain of 53%)
Key Catalyst
Shallow gold intersections from drilling at the new Ndongo East discovery on the Ndongo License, 20km north of CDV’s Namdini Gold Project – which has a 6.5Moz Indicated Mineral Resource.
CDV has performed solidly since our coverage initiation back in June 2016, generating a 53% gain. It has therefore been one of our longstanding gold sector exploration exposures, with share price gains driven by its highly successful exploration drilling programs at its flagship Namdini project in Ghana, which has led to the establishment of a multi-million ounce gold resource base. Whilst CDV pursues further resource growth, it is also simultaneously looking to advance Namdini towards production via completion of a Pre-Feasibility Study (PFS), detailed metallurgical test-work and process flow-sheet studies. Separately, CDV has announced shallow gold intersections from exploration drilling at its new Ndongo East discovery within its Ndongo License, just 20km north of its Namdini Gold Project that hosts a 6.5Moz Indicated Mineral Resource. The Ndongo East prospect lies within a larger target area of approximately 7km in strike length, which has yet to be RC drill-tested. CDV is also maintaining exploration programs at its Bolgatanga (Northern Ghana) and Subranum (Southern Ghana) Projects.
Latest Activity
Ndongo East Exploration Update
CDV has announced shallow gold intersections from the latest exploration drilling at its new Ndongo East discovery, located within its Ndongo License in Ghana – just 20km north of its Namdini Gold Project that hosts a 6.5Moz Indicated Mineral Resource.
Some of the best results from the latest drilling include:
- 2m @ 27.0 g/t Au from 10m in NDRC247
- 6m @ 12.6 g/t Au from 2m in NDRC275
- 7m @ 2.2 g/t Au from 55m in NDRC276
Figure 1: Cardinal’s Bolgatanga Project (Ndongo, Bongo, Kungongo) and the Namdini Project
Previous drilling results announced in July intersected higher‐grade gold mineralised structures concentrated within the northern portion of the shear zone over a 400m strike length, coincident with gold‐in‐soil and geophysical targets.
CDV’s most recent RC drilling has also proven encouraging, as it suggests that mineralisation continues along fence lines further to the southwest – both along strike and at depth. The furthest drill fence to the southwest has intercepted a narrow zone of mineralisation comprising 2m grading 27.0 g/t Au from 10m down-hole in NDRC247 – which indicates a strike potential of up to 1.2km of mineralised structures. Further infill drilling is planned to test this extended zone.
Figure 2: Ndongo Prospecting License with Exploration Prospects
Gold mineralisation appears to be developed at, or near, the diorite‐granodiorite contacts where competency differences create brittle fracturing, which allows the ingress and precipitation of mineralising fluids. The mineralised system is open along a northwest‐southeast strike and at depth, with multiple mineralised intersections.
Technical Significance
These latest shallow, significant gold intersections have provided a possible threefold extension to the original 400m strike length discovery zone to 1.2km in length. The Ndongo East prospect lies within a larger target area of approximately 7km in strike length, which has yet to be RC drill-tested.
The license area is considered highly prospective for the discovery of economic gold mineralisation associated with the prolific Nangodi Shear Zone, a splay fault off the main regional‐scale Bole‐Bolgatanga Shear. The Nangodi Shear Zone is spatially related to at least four significant gold discoveries – CDV’s Namdini Gold Project, the Shaanxi Gold Mine, the historic Nangodi Gold Mine and the Youga Gold Mine in Burkina Faso, adjacent to the Ghana border.
In addition, there are numerous historic shallow artisanal workings along many parts of this shear zone -including the Dusi, Zug and McGuiness Prospects – which all fall within CDV’s license area.
Next Steps
CDV expects to recommence drilling after the wet season during October‐November 2018 in order to test the strike and depth extents of the mineralised system.
Summary
CDV’s early-stage drilling activities at its Ndongo Prospecting License are encouraging indeed, particularly given the prospective gold-bearing geological structures and strategic location just 15km from its 6.5Moz Namdini deposit. Its latest RC drilling suggests that mineralisation continues along fence lines further to the southwest – both along strike and at depth. These latest shallow, significant gold intersections have provided a possible threefold extension to the original 400m strike length discovery zone to 1.2km in length. The Ndongo East prospect lies within a larger target area of approximately 7km in strike length, which has yet to be RC drill-tested.
In the background, CDV is also progressing in terms of its timetable with respect to Namdini project major milestones, with the release of both the Namdini Project resource upgrade and Scoping Study results during Q1 2018. The results generated a very positive cashflow outcome for all three throughput scenarios considered, with further evaluation and trade‐offs for improved economies of scale, mine scheduling, plant design and costings to be conducted as part of the PFS that’s currently underway.
