West African gold explorer Asara Resources Ltd (ASX:AS1, OTC:GMRMF) has provided an update on recent activities including the initiation of metallurgical test work at the flagship Kada Gold Project in Guinea to determine its potential as a low-cost heap leach operation.
With a focus on progressing Kada, Asara has also started the process of potentially divesting its Paguanta silver and zinc project in Chile and advises that advanced discussions are underway on the potential divestment of its 2-million-ounce Kouri Gold Project in Burkina Faso.
"Compelling, undervalued, exploration play"
Asara managing director Tim Strong said: “We are pleased to provide this corporate update, outlining how the company intends to move forward with our flagship Kada gold project in Guinea.
"Initial metallurgical testing will provide us with the knowledge required to move forward with the project as a low-cost heap leach operation which has the potential to quickly be put into production.
“Over the past few months, we have worked to outline a strategic plan which has the potential to provide a sustainable long-term growth path for the company. This includes a reduction in overhead costs, a review of exploration data at Kada and significant work undertaken to divest the company’s non-core assets in Chile and Burkina Faso.
“With renewed investor confidence in both gold and silver, we are pleased to have entered more advanced discussions with several interested parties on both the Kouri Gold Project in Burkina Faso and the polymetallic Paguanta Project in Chile.
“The divestment of these assets will allow the company to focus on its projects in Guinea and continue to advance Kada towards eventual development.
“The company remains a compelling, undervalued, exploration play with an asset base of 923,000 ounces of gold in Guinea, two million ounces of gold in Burkina Faso, 6.8 million ounces of silver in Chile and an ongoing US$17 million joint venture with Teck on the Loreto Copper Project, also in Chile.”
Kada Gold Project, Guinea
Asara has entered into an agreement with Kappes, Cassidy and Associates (KCA) of Reno, Nevada, to complete further metallurgical test work on the Kada Gold Project in Guinea.
KCA is a leading expert in heap leach test work and design which has been involved with numerous West African oxide gold projects including the Siguiri Gold Project operated by Anglo Gold Ashanti.
Initial test work at Kada will include head characterization, bottle roll tests, head screens, agglomeration tests and column leach tests to confirm Kada’s viability as a low-cost heap leach operation.
Sample selection within the main 923,000-ounce Massan mineral resource area has been completed and it is expected that samples will be dispatched to the USA before the end of the month. The test work is anticipated to take around two months to complete.
Paguanta Project, Chile
In Chile, Asara has initiated a number of discussions regarding the potential divestment of its Paguanta silver, zinc, lead, copper project.
The asset is non-core, and the company is working to monetise its interest in Paguanta whilst focusing on its flagship asset, the Kada Gold Project in Guinea.
Kouri Project, Burkina Faso
Advanced discussions are ongoing in Burkina Faso regarding the divestment of the company’s two-million-ounce Kouri Gold Project.
The rise in the gold price has led to “a considerable amount” of interest in Kouri from various parties.
Convertible note
The company also reports that it has agreed to extend the maturity date of its convertible note with Capital DI Limited for an additional seven months until January 5, 2025.