SCP Resource Finance says the bidding war over Osino Resources shows that Namibian projects are in high demand.
The independent broker-dealer specialising in the global mining sector said Namibia offers the best of Africa, namely the ability to go from discovery to production in under seven years without the political or security complications of some African countries and with good infrastructure.
SCP Resource Finance said the recent bidding war between Dundee (which initially offered a 37% premium) and Yintai Mining (which won out with an all-cash C$368 million bid, a 28% premium to Dundee’s offer) for Osino surprised many but highlighted the premium placed on Namibia.
It said Osino’s Twin Hills project has a 2.15-moz at 1.04 g/t reserve with a 13-year, 162-kozpa at US$1,011/oz AISC per definitive feasibility study.
In its assessment of Wia Gold’s Kokoseb discovery, SCP Resource Finance said it could grow to 3Moz.
With a low resource model, dilution, and metallurgical risk in low-risk Namibia, SCP Resource Finance said Wia is an attractive project to execute.
The project is ~50km from Osino’s Ondundu (900koz @ 1.1g/t) asset and has road access from Windhoek.
Kokoseb has an April 2024 updated inferred MRE of 2.12Moz at 1.0g/t, which follows May 2023’s initial MRE of 1.3Moz at 1.0g/t Au.
Wia Gold has 80% of the project, and Epangelo holds 20%. The project is within the larger Okombahe exploration license, which covers an area of ~2,700 km2.
Wia Gold, operating as Tanga Resources, acquired the Okombahe exploration license in February 2019 in a joint venture with Epangelo.
In September 2020, Wia Gold added an 80% interest in four gold projects (Bouaflé, Mankono, Issia and Bocanda) in southern Côte d’Ivoire.
Wia Gold started exploration groundwork at both projects, identifying a ~3km gold-in-soil anomaly in Namibia in 2021.
In March 2022, an initial 1,000m diamond drill campaign started at Kokoseb, including 5-27m highlight hits @ 1.5-4.4g/t Au, leading to an initial MRE of 1.3 Moz at 1.0g/t in May 2023.
Since then, Wia has drilled 27,378 m (96 RC holes and 11 DD holes), leading to an updated MRE of 2.12Moz at 1.0 g/t in April 2024 based on 46,874 m of drill results.
Wia Gold is targeting now 2024 for resource expansion drilling, infill in Q3 2024; infill, studies, permitting in 2025; construction between 2026 and 2028; and commercial production in the second half of 2028.
According to SCP Resource Finance, at 2.12Moz, Kokoseb already has the critical mass to be a 10-year SCPe ~145-150Koz gold open pit producer.
The company added that Kokoseb has increased cost-efficiently, reaching 2.12Moz in three years from the first discovery at just US$3/oz, with targets that could take the project to 3Moz.
SCP Resource Finance noted that Wia Gold advanced quickly from an initial survey in 2021, maiden 1.3Moz at 1.0g/t (0.5g/t cut-off in May 2023 to 2.12Moz at 1.0g/t in April this year.
Additionally, SCP Resource Finance said Wia Gold had done this exceptionally efficiently at a discovery cost of US$3/oz, raising just A$22 million over that period.
SCP Resource Finance explained that with good people involved, many of whom have successfully built companies at Centamin, Wia ticks all the boxes.
Wia Gold’s new executive chairman, Josef El Raghy, was Centamin’s CEO for the development of Sukari; group exploration manager Pierrick Couderc was exploration manager at Centamin; Andrew Pardeywas Centamin CEO and COO, and Mark Arnesen was Centamin board chairman from 2011 to 2020.
SCP Resource Finance assumed that US$183 million of equity, US$248 million of debt funding, and US$16 million of current cash generate a fully funded net asset value of US$450 million or A$0.27/sh per fully diluted for options but not mine build.
“We deduct general and administration finance costs and add US$50/oz for ounces outside the mine plan and US$25 million for West Africa to derive a net asset value of US$265m or A$0.33/sh,” SCP Resource Finance said.
The finance research company added that there are already enough ounces to form the baseload for a 10-year 150/year operation, assuming a processing rate of 5Mtpa.
According to SCP Resource Finance, preliminary metallurgical testing concluded a 92% gold recovery at P80 75µm grind size, using a grinding circuit, gravity recovery and cyanidation.
It added that Osino Resources modelled a 92% gold recovery at P80 63µm with a similar flowsheet for comparison.
The resource at Kokoseb shows good continuity from section to section with mineable 30-50m average widths and attractive 40 degree-dip.
Mineralisation is hosted in a schist package and is spatially associated with sulphides and the occasional quartz, which provide reasonable indicators for ore spotting to manage dilution / or loss, and the drilling has not been nuggety; thus we are confident that tonnes, grade, and ounces will hold up well on further infill for inferred to measured and indicated to reserve conversion.
