Azumah Resources Limited - High-Grade Results at Julie to Underpin Mineral Reserve Upgrade

Figure 1: Ghana's Emerging Northwest Gold Province (CNW Group/Azumah Resources Inc)

Figure 2: Latest RC and Diamond drilling results from Julie (CNW Group/Azumah Resources Inc)

ASX / TSX & Media Release
ASX Code - AZM
TSX Code - AZR
www.azumahresources.com.au

Investment Highlights:

  • 430,000oz Proved and Probable Mineral Reserve
  • Feasibility Study completed for a 1.0Mtpa gravity/CIL gold plant
  • NI 43-101 and JORC Code reportable 1.02Moz  Measured & Indicated and 0.66Moz Inferred Mineral Resource at Wa Gold Project, NW Ghana
  • 100% of 3,100km2 licences hosting over 150km of prospective Birimian greenstone belt.  Less than 10% effectively explored
  • 17% strategic investment in neighbour, Castle Minerals Limited
  • Board and management team of successful explorers, mining and corporate professionals

Issued Capital:

333.7M ordinary shares
9.5M unlisted options
3.5M performance rights

Directors & Management:

Chairman:
Michael Atkins

Managing Director:
Stephen Stone

Non-Executive Directors:
Geoff M Jones
Bill LeClair

Company Secretary:
Dennis Wilkins

TORONTO, Sept. 11, 2012 /CNW/ -

  • Latest Julie intercepts confirm that high-grade lodes extend beneath the base of designed open pits and initial Mineral Reserves
  • Best intercepts include:
    • 12.0m @ 3.12g/t Au from 85m (AJUC648)
    • 7.0m @ 3.23g/t Au from 26m (AJUC671)
    • 5.0m @ 23.65g/t Au from 103m (AJUC673)
    • 6.0m @ 4.87g/t Au from 156m (AJUC679)
    • 6.0m @ 4.07g/t Au from 80m (AJUC680) 
    • 13.0m @ 5.95g/t Au from 140m (AJUC682)
    • 4.0m @ 9.75g/t Au from 117m (AJUCD684)
    • 8.0m @ 3.13g/t Au from 87m (AJUC704)
    • 17.0m @ 2.12g/t Au from 79m (AJUC707)
    • 13.0m @ 4.09g/t Au from 76m (AJUC710)
    • 6.0m @ 3.43g/t Au from 17m (AJDD009) 
  • Julie Mineral Resource upgrade planned in Q4, 2012 - currently 386,000oz Measured & Indicated and 181,000oz Inferred
  • Julie and total Wa Gold Project Mineral Reserve upgrade planned in Q1 2013 - currently 430,000oz @ 2.0g/t Au
  • AZM holds $20M in cash and listed investments

"These excellent results from Julie provide further confirmation that high-grade mineralisation extends over a mineable thickness to well below the depth of previous drilling and current designed pits but is still shallow enough to be open-pitable and therefore likely to have a positive impact on Mineral Resources and Mineral Reserves" said Azumah Managing Director, Mr Stephen Stone

Perth-based gold explorer and developer, Azumah Resources Limited (ASX: AZM) (TSX: AZR), is pleased to report that another round of high-grade intercepts from drilling at the Julie deposit in the Wa East district of northwest Ghana, West Africa, has further confirmed the continuity of mineralisation below the deepest intercepts from previous drilling.

These intercepts, at no greater than 130m below surface, are still relatively shallow and will increase the Julie Mineral Resource.  They may also have a positive impact on the overall Mineral Reserve for the Wa Gold Project (the 'Project') when this is re-estimated in Q1 2013 (Figure 1. Tables 1, 2 and 3).

Azumah's recently completed Feasibility Study (refer ASX release dated 27th August 2012) enables it to commence the application for a Mining Licence and other key project development related approvals that, with the planned Mineral Reserve upgrade in early 2013, will then position the Company to make a final development decision.

Subject to Project financing, it can then shift into project development mode with the overall objective of producing gold in late 2014.

The Feasibility Study confirmed that the Project is viable, has no fatal flaws, has an all inclusive development capital requirement of $144 million and cash operating costs that will see the Project generate approximately $40 million of annual free cash flow, after taxes and royalties, from the initial Mineral Reserve of 430,000oz, grading 2.0g/t Au.

Any increase in the Mineral Reserve is expected to have a very positive impact on overall Project returns as it will also provide scheduling, cash flow and pay-back acceleration benefits.  All drilling by Azumah is totally focused on achieving this increase.

Azumah's current Mineral Resource of 1.02Moz Measured and Indicated and 0.66Moz Inferred, and its initial 430,000oz Mineral Reserve, are based on a resource block model that utilised drilling completed to the end of 2011 at Kunche, Bepkong and Julie.

The Mineral Resource upgrade planned for Q4 2012 will additionally include drill programmes completed during 2012 at each of the three deposits, including deep drilling to test depth extensions and shallow drilling to upgrade Inferred mineralisation to Measured or Indicated classification and then conversion to Mineral Reserves.

Julie results

The reported drill results represent the latest from a recently completed RC and diamond drilling programme, comprising 72 holes for 9,879m.  Drill traverses were spaced at approximately 100m intervals along strike over the full length of two, 1km long, high-grade, zones of mineralisation in the central part and at the eastern end of the 6km long, shallow north dipping (±30°) Julie shear zone (Figure 2).

The results are consistent with earlier results previously announced from the same programme (ref ASX release dated 19th July 2012), and confirm that Azumah will be able to extend its resource modelling from 100m to approximately 150m vertical depth below surface.  This will represent a major increase to the current Julie Mineral Resource estimate of 386,000oz Measured and Indicated and 181,000oz Inferred.

The increase in Mineral Resource at Julie will be in addition to increased resources defined by drilling that was recently completed at the flagship Kunche and Bepkong deposits, as well as possible additions arising from drilling at the nearby Aduane trend (refer ASX release dated 19th June 2012).

Additional drilling at Kunche, proximal to its optimised pit, has also just been completed. This programme was designed to upgrade material currently classified as Inferred to a Measured and/or Indicated classification, such that it can be included in the Mineral Reserve.  In the Feasibility Study, this material was either treated and expensed as waste or was specifically excluded from the pit optimisation process, with a resultant detrimental impact on strip ratios, costs and overall production.

Also, at both Kunche and Bepkong, a number of areas have been identified adjacent to the existing optimised pits, which have not been adequately tested and present an opportunity to delineate additional mineralisation that can be incorporated into both the Mineral Resource and Mineral Reserve.

For further information on the Wa Gold Project in general please refer to the Company's website at www.sedar.com and www.azumahresources.com.au.


Table 1: Mineral Reserve Summary
Mineral Reserve Summary
(As of 21st Aug 2012) Proved Probable Contained Gold
Tonnes (Mt) Grade (g/t Au) Tonnes (Mt) Grade (g/t Au) oz Au(1)
  Bepkong
  Kunche
  Julie
1.7
2.3
-
1.9
2.1
-
0.2
1.6
1.0
2.0
1.6
2.4
117,000
238,000
74,000
Total 4.0 2.0 2.8 1.9 430,000

* Values have been rounded

Table 2: Summary of Wa Gold Project Mineral Resources - 0.5g/t Au cut-off (CSA Global - March 2012)
Cut-off
0.5 g/t
Au
Measured Indicated Measured and Indicated Inferred
Tonnes Grade Gold Tonnes Grade Gold Tonnes Grade Gold Tonnes Grade Gold
(Mt) (g/t) (oz) (Mt) (g/t) (oz) (Mt) (g/t) (oz) (Mt) (g/t) (oz)
                         
Kunche 3.17 1.94 198,000 4.95 1.52 242,000 8.13 1.68 440,000 7.35 1.33 315,000
Bepkong 2.02 1.81 117,000 1.67 1.36   73,000 3.69 1.60 190,000 1.98 1.32   84,000
Julie       7.92 1.52 386,000 7.92 1.52 386,000 3.74 1.51 181,000
Collette                   1.69 1.45   79,000
Total 5.19 1.89 315,000 14.54 1.50 701,000 19.74 1.60 1,016,000 14.76 1.39 659,000



Table 3: Julie deposit - Latest RC and Diamond drilling results

Hole ID
East
North
Depth
(m)
Dip Azimuth From
(m)
To
(m)
Width
(m)
Au (g/t)
AJDD009 594,424 1,115,965 82.5 -50 185 17.00 23.00 6.00 3.43
            34.00 35.00 1.00 1.20
            37.00 38.00 1.00 1.23
            44.00 46.00 2.00 1.15
AJDD010 596,769 1,115,980 50.5 -50 185 13.00 22.00 9.00 1.15
            25.80 30.00 4.20 1.88
AJUC648 594,594 1,116,101 151.0 -50 185 85.00 97.00 12.00 3.12
            103.00 104.00 1.00 1.49
AJUC651 595,109 1,116,059 91 -50 185 52.00 55.00 3.00 1.57
AJUC656 595,416 1,116,030 101.0 -50 185 44.00 45.00 1.00 7.78
            63.00 64.00 1.00 45.44
AJUC665 595,414 1,115,972 71.0 -50 185 12.00 13.00 1.00 1.73
AJUCD665       -50 185 74.40 76.00 1.60 3.08
            85.20 87.00 1.80 4.91
AJUC667 596,399 1,116,031 73.0 -50 185 62.00 64.00 2.00 1.85
AJUC671 597,407 1,115,783 82.0 -50 185 26.00 33.00 7.00 3.23
            46.00 47.00 1.00 1.16
AJUC672 594,050 1,116,029 42.0 -50 185 16.00 21.00 5.00 1.59
            28.00 34.00 6.00 1.40
AJUC673 596,902 1,116,137 166.0 -50 185 91.00 92.00 1.00 2.50
            103.00 108.00 5.00 23.65
          Including 103.00 104.00 1.00 10.13
          Including 104.00 105.00 1.00 10.18
          Including 105.00 106.00 1.00 86.04
          Including 106.00 107.00 1.00 10.38
AJUC674 597,002 1,116,169 151.0 -50 185 81.00 88.00 7.00 1.91
            110.00 118.00 8.00 1.39
AJUC675 597,103 1,116,150 180.0 -50 185 41.00 42.00 1.00 1.39
            114.00 123.00 9.00 1.17
            128.00 131.00 3.00 1.62
            156.00 160.00 4.00 1.18
AJUCD676 597,351 1,115,942 180 -50 185 77.00 78.00 1.00 11.52
            87.00 88.00 1.00 1.11
AJUC677 597,447 1,115,896 120.0 -50 185 77.00 78.00 1.00 1.24
AJUC679 597,650 1,115,997 187.0 -50 185 156.00 162.00 6.00 4.87
          Including 158.00 159.00 1.00 21.38
AJUC680 597,649 1,115,840 112.0 -50 185 54.00 57.00 3.00 3.40
            80.00 86.00 6.00 4.07
          Including 81.00 82.00 1.00 16.34
AJUC681 597,652 1,115,922 151.0 -50 185 118.00 130.00 12.00 1.14
AJUC682 597,751 1,115,938 180.0 -50 185 126.00 127.00 1.00 2.02
            140.00 153.00 13.00 5.95
          Including 150.00 151.00 1.00 35.74
          Including 151.00 152.00 1.00 24.23
AJUC683 597,750 1,116,008 211.0 -50 185 168.00 169.00 1.00 1.07
AJUCD684 597,850 1,115,927 200.8 -50 185 92.00 93.00 1.00 2.68
            117.00 121.00 4.00 9.75
          Including 118.00 119.00 1.00 13.97
          Including 119.00 120.00 1.00 14.28
AJUC685 596,804 1,116,204 186.0 -50 185 108.00 109.00 1.00 1.15
            129.00 130.00 1.00 1.05
AJUC686 596,900 1,116,219 198.0 -50 185 109.00 110.00 1.00 2.41
AJUC687 597,197 1,116,032 112.0 -50 185 68.00 72.00 4.00 8.49
          Including 71.00 72.00 1.00 20.90
            82.00 85.00 3.00 1.16
AJUC688 597,200 1,116,100 164.0 -50 185 102.00 106.00 4.00 1.19
            133.00 138.00 5.00 1.58
            143.00 155.00 12.00 1.66
AJUC691 597,251 1,116,033 150 -50 185 102.00 103.00 1.00 1.87
AJUC693 596,650 1,116,108 85 -50 185 71.00 72.00 1.00 3.85
AJUC698 595,150 1,116,129 126 -50 185 81.00 85.00 4.00 2.35
AJUC699 595,151 1,116,214 170 -50 185 120.00 121.00 1.00 1.21
AJUC701 595,052 1,116,196 150 -50 185 129.00 130.00 1.00 1.60
AJUC703 595,048 1,116,125 124 -50 185 88.00 90.00 2.00 1.48
AJUC704 594,752 1,116,103 136 -50 185 87.00 95.00 8.00 3.13
AJUC706 594,649 1,116,029 96 -50 185 49.00 50.00 1.00 2.26
AJUC707 594,656 1,116,092 138 -50 185 79.00 96.00 17.00 2.12
AJUC709 594,550 1,116,028 105 -50 185 53.00 64.00 11.00 1.26
AJUC710 594,546 1,116,109 170 -50 185 76.00 89.00 13.00 4.90
          Including 76.00 77.00 1.00 29.19
          Including 78.00 79.00 1.00 14.60
            105.00 108.00 3.00 1.26
AJUC713 594,451 1,116,172 205 -50 185 114.00 115.00 1.00 3.09
AJUC714 594,349 1,116,119 139 -50 185 97.00 98.00 1.00 1.15

* True widths unknown at this time

Grades reported above are based on length weighted averages calculated for continuous sample intervals at a cut-off grading >0.5g/t with up to 2m internal dilution.  All Azumah sample preparations and standard 50 gram gold fire assays were performed by MinAnalytical Laboratory Services (Australia) Pty Ltd, Perth.  Azumah employs a rigorous quality control and assurance program comprising regular insertion of certified reference standards, blanks and duplicates.

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Nick Franey, who a full-time employee (General Manager Geology) of Azumah Resources Ltd.  Mr Franey is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and to qualify as a "Qualified Person" as defined in National Instrument 43 -101 - Standards of Disclosure for Mineral Projects ("NI 43-101") of the Canadian Securities Administrators.  Mr Franey is the Qualified Person overseeing Azumah's exploration projects and has reviewed and approved the disclosure of all scientific or technical information contained in this report.

For a description of Azumah's standard data verification processes, quality assurance and quality control measures, and details of the key assumptions, parameters and methods used to estimate the Mineral Resources set out in this report and the extent to which the estimate of previously declared Mineral Resources set out herein may be materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or relevant issues, readers are directed to the technical report entitled "NI 43-101 Azumah Resources Limited Wa Gold Project, North West Ghana", dated and effective as of 3rd May, 2012, available on www.sedar.com.

The reported Mineral Reserves have been compiled by Mr Harry Warries.  Mr Warries is a Fellow of the Australasian Institute of Mining and Metallurgy and an employee of Coffey Mining Pty Ltd.  He has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a Qualified Person as defined in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards of November 2010, as well as a Competent Person as defined in the 'Australasian Code for Reporting of Mineral Resources and Ore Reserves' of December 2004 ("JORC Code") as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia. Mr Warries gives Azumah Resources Limited consent to use this reserve estimate in reports

Forward-Looking Statement

This release contains forward-looking information. Such forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend", and statements that an event or result "may", "will", "should", "could", or "might" occur or be achieved, and other similar expressions. In providing the forward-looking information in this news release, the Company has made numerous assumptions regarding: (i) the accuracy of exploration results received to date; (ii) anticipated costs and expenses; (iii) that the results of the feasibility study continue to be positive; and (iv) that future exploration results are as anticipated.

Management believes that these assumptions are reasonable. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking information. Some of these risks, uncertainties and other factors are described under the heading "Risks Factors" in the Company's annual information form available on www.sedar.com.  Forward-looking information is based on estimates and opinions of management at the date the statements are made.  Except as required by law, Azumah does not undertake any obligation to update forward-looking information even if circumstances or management's estimates or opinions should change. Readers should not place reliance on forward-looking information and readers are advised to consider such forward-looking statements in light of the risks set forth in the Company's continuous disclosure filings as found at the (Canadian) SEDAR website.

 

Image with caption: "Figure 1: Ghana's Emerging Northwest Gold Province (CNW Group/Azumah Resources Inc)". Image available at: http://photos.newswire.ca/images/download/20120911_C5464_PHOTO_EN_17655.jpg

Image with caption: "Figure 2: Latest RC and Diamond drilling results from Julie (CNW Group/Azumah Resources Inc)". Image available at: http://photos.newswire.ca/images/download/20120911_C5464_PHOTO_EN_17654.jpg

SOURCE: Azumah Resources Inc


For further information:

Stephen Stone 
Managing Director
Tel: +61 (0)418 804 564
stone@azumahresources.com.au

Nathan Ryan - Australia
NWR Communications
+61 (0) 420 582 887
nathan.ryan@nwrcommunications.com.au

Joanna Longo - North America
Terre Partners
+1 416 238 1414
Jlongo@terrepartners.com