Dwyka Resources looks ahead to advancing new gold assets in Ethiopia
by Ian Mclelland
proactiveinvestors.com.au
Finally, after suffering from being underexplored for many years, Minerva’s promising gold projects in Ethiopia look like they will finally get the attention they deserve. Minerva certainly would have liked to have done more with its assets, but cash constraints prohibited its ambitions. Realising that potential is firmly at the top of Dwyka Resources (ASX & AIM: DWY) ‘to do’ list; now that it has virtually completed the all share acquisition of Minerva (Dwyka will issue 30.85 million shares to Minerva shareholders).
Dwyka Resources, unlike Minerva, has enough cash (approximately £6.9 million) to seriously speed up exploration at Tulu Kapi – a promising gold project which lies within the Afro-Nubian Shield. Ethopia, by the way, has undergone a bit of a transformation itself, establishing new mining laws, with advice from the World Bank, to attract foreign direct investment (FDI) into the mining sector. This has sparked the interest of numerous mining groups on the lookout for new discoveries.
This fact was not lost on Dwyka Resources, who came up against stiff competition to acquire Minerva Resources. Fortunately for Dwyka Resources, while it may not have tabled the highest offer, it did table the most appealing one.
Drilling at Tulu Kapi in 2006 highlighted the potential of the project. Results included 10 meters grading 2.1 grams per tonne gold from 10.3 meters and 37.9 meters grading 4.6 grams per tonne gold from 46.4 meters. Before Minerva shares were suspended in January this year, the company was completing additional drilling designed to define an initial JORC compliant inferred resource at Tulu Kapi.
The resource statement was never completed, but additional drilling did confirm that the mineralised zone is essentially the flanks and centre of a large hill, which should lend itself to an open cut operation with a low strip ratio. The mineralised ore is also oxidised, suggesting a simple, heap-leach operation would support a small, but profitable gold mine. This vision appears to be shared by Dwyka Resources, who snapped up Minerva on the potential to deliver a gold mine in fairly short order.
Dwyka is not messing about; drilling at the Tulu Kapi has already commenced, picking up where Minerva left off. Dwyka intends to combine its own drilling data with 34 holes completed by Minerva to quickly establish a JORC resource and make a decision on whether to fast-track the project towards development.
Melissa Sturgess, CEO of Dwyka commented recently: “Considerable exploration and resource definition drilling has already been completed on a number of targets within the Minerva project areas. Dwyka has significant cash reserves, allowing us to quickly advance these projects to development alongside our existing assets. We also believe there is potential to expand the existing gold resource meaning that subject to ongoing exploration, there is an opportunity for Dwyka to establish substantial gold, platinum and nickel resources, delivering significant short, medium and long term revenue opportunities.”
Through the acquisition, Dwyka also picked up 51% of the Yubdo Platinum Project, also in Ethiopia, and stakes in gold and diamond exploration projects in Sierra Leone. House Broker, Ambrian Capital, has a ‘speculative buy’ on the stock, though it seems likely this will be revisited once Dwyka can put some hard numbers to Tulu Kapi. |
