Aim-listed GoldStone will shortly start with an additional infill reverse circulation drilling programme to increase the mineable resource at the Homase South Pit at its Akrokeri-Homase gold project, in Ghana

The project currently hosts a 602 000 oz gold resource at an average grade of 1.77 g/t.

The existing resource is confined to a 4 km zone of the Homase trend, including the Homase North, Homase Central and Homase South deposits.

The Homase South Pit is the first of the three openpits planned to be brought into production as detailed in a definitive economic plan (DEP) published in June 2019.

The Homase South Pit extends 1 500 m southwards from the historic Homase Main Pit, from which AngloGold Ashanti produced 52 500 oz gold at an average grade of 2.5 g/t gold in 2002/3.

The new drill programme aims to further define and extend the mineable resource down-dip at the Homase South Pit to a vertical depth of about 60 m. 

The company is also considering an additional drilling programme within the Homase Trend, extending northwards, by about 2 000 m from the historic Homase Main Pit, encompassing the proposed Homase Central and North Pits, being the other two openpits defined in the DEP.

Meanwhile, GoldStone has updated the financial model used for the DEP to bring it in line with the current gold price of about $1 800/oz, compared with a price of $1 300/oz used initially in the DEP. This will enable a reduced capital expenditure cost of $3-million, compared with $7-million originally.

This reduced initial capital approach enables the company to achieve first production within the timetable envisaged in the DEP, while deferring certain elements of the project – including an elution plant, such that it can be funded from production cash flows.

The combined effect of an increase in the gold price and the reduction in initial capital outlay is estimated by the board to increase the originally estimated project net present value from $19.5-million to $34.5-million and the internal rate of return from 143% to 382%.

Further, GoldStone continues to work closely with the Ghanaian Minerals Commission and the Environmental Protection Authority to finalise the environmental and operational permits for the project, which are expected to be awarded in the next few weeks.

Once the permits are in place, GoldStone will start with mining operations at the Homase South Pit, through a contractor, and start building a heap leach plant.

The company expects the first gold pour to take place in the fourth quarter.