JOHANNESBURG (miningweekly.com) – ASX-listed West African gold company Azumah Resources has successfully raised A$4,24-million through an oversubscribed share placement as part of its push to fast-track exploration and development of its 100%-owned Wa gold project, in north-west Ghana.

The share placement, comprising 21,2-million shares at 20c a share, has been made to Australian and overseas institutional and sophisticated investor clients of Perth-based Blackswan Equities and Melbourne/Sydney-based BGF Securities.

The funds raised will bolster Azumah’s working capital to over A$9-million ahead of a large-scale, 41 000 m drilling programme aimed at increasing the company’s previously outlined 750 000 oz indicated and inferred mineral resource.

This drilling programme was scheduled to start shortly and would act as a priority test for extensions to the Kunche and Bepkong discoveries. It would also test for new mineralisation in the immediate vicinity of these deposits, investigate priority targets along the Kunche-Bepkong mineralised structural corridor and delineate maiden resources at the Julie and Collette prospects.

Azumah said in a statement on Friday that first results were expected in early December and news flow would continue well into 2010. Maiden Joint Ore Reserve Committee code mineral resource estimates for Julie and Colette were expected to be available early in the next quarter.

Preliminary openpit optimisation and mine design studies based on the mining of the Kunche and Bepkong deposits over an initial four and a half years indicated that the Wa gold project was already capable of generating robust cash operating margins and a healthy overall cash operating surplus.

Azumah’s immediate objective was to delineate sufficient additional resources during the forthcoming and subsequent drilling programmes to underpin a decision in 2010 to develop a mining operation.

Azumah’s licences stretched over 150 km strike length of prospective Birimian aged greenstone terrain, the same rocks that hosted many of the world-class gold deposits in West Africa and Ghana. Reconnaissance soil sampling has returned very widespread gold anomalism within Azumah’s 3 200 km² tenure, but only a relatively limited area has ever been drilled.

“This capital raising comes at a pivotal time in the company’s development as we embark on a major new drilling programme designed to help us reach the critical mass resource base required to establish the first stand-alone commercial mining operation in the emerging north-west Ghana gold province and to ramp up development studies at our Wa gold project,” said Azumah MD Stephen Stone.

“Based on our current resources, Azumah has an enterprise value of just A$41 per resource ounce of gold and, while this has been increasing of late, the Company is still fundamentally and relatively undervalued against its West African explorer peers,” Stone added.

Azumah’s largest shareholder, Macquarie Bank, was participating in the placement to maintain its 15% holding in the company.