West Africa-focused gold and diamond mining company Golden Saint Resources (GSR) seeks investment of £3.5-million to develop gold and diamond projects, in Sierra Leone.
“GSR already has £2-million in an escrow account, which will be used for the projects’ development,” GSR executive chairperson Cyril D’Silva tells Mining Weekly.
He adds that GSR is raising the preinitial public offering (IPO) at ten pence a share and is optimistic that if the markets remain stable, the price will run between 12 p and 15 p in the first weeks after the IPO. The IPO is scheduled for July 18, on the Alternative Investment Market of the London Stock Exchange.
GSR has three tenements in the interior of the country to the east of the capital city, Freetown.
“The company will start exploration and alluvial mining after the IPO is complete. GSR expects to achieve significant income from the alluvial production of gold and diamonds,” states D’Silva, adding that capital expenditure on the projects will be determined following the results of the exploration work.
However, GSR does not expect to start construction on the openpit mines until at least 18 months after the initial groundwork has been done.
The Baja diamond and gold project is situated in the Kenema district, in the Eastern province, and in the Bo district, in the Southern province, and covers an area about 240.1 km2.
The Tongo diamond project is situated to the north-east of Kenema, in the Kenema district and covers an area about 53.4 km2.
The Moa diamond and gold project is situated to the south-east of Kenema, in the Kenema district and covers an area about 46.4 km2.
Multidisciplinary consultancy firm Wardell Armstrong International (WAI) undertook geological work for GSR and issued it with a Competent Persons Report (CPR) for exploration projects, in Sierra Leone, last month.
WAI’s CPR executive summary states that, based on knowledge about the geological setting and occurrence of artisanal workings, the reported diamond deposits and the sulphide and quartz veins, GSR’s licence areas are considered to be prospective for diamonds in Tongo, Baja and Moa, and for gold in Baja and Moa.
“Therefore, WAI believes reconnaissance-stage exploration is justified. Known alluvial and hard-rock diamond deposits are located at a reasonable distance from each licence area and, along with the long history of arti- sanal and small-scale mining operations in each region, excavations and/or reported gold extraction were encountered in the Baja and Moa licence areas,” the report states.
Moreover, WAI recommends that the Tongo and Moa licence areas be given highest priority, based on factors such as favourable geology, known gold mineralisation and diamond occurrences, artisanal workings and potential hard-rock mineralisation, the accessibility of the licence areas and surface exposure, as well as human resources availability.
Additionally, the Sewa river, which passes through the Baja licence area, has good potential for alluvial diamond deposits and is being worked by small-scale miners further along the river.
“The diamond alluvial deposits could be targeted to generate near-term cash flow. Initial reconnaissance mapping and soil, sampling can be undertaken on the Baja licence area to identify targets and reduce the exploration area,” states the WAI’s report.
The CPR notes that the suggested explo- ration strategy for diamonds and gold is to target areas where artisanal workings are evident to identify economic alluvial deposits, which could be worked in the near term to generate cash flow for the longer-term exploration of hard-rock gold and diamond deposits.
“To identify hard-rock gold deposits, structures that may have acted as traps or conduits for hot mineralising fluids in, or associated with greenschist and amphibo- lite metamorphoc facies lithologies, which are indicative of heat sources and the possibility of the injection of gold-bearing fluids, should be targeted,” states the CPR.
As part of the CPR, WAI undertook a high-level review of environmental, social, health and safety issues relating to exploration on each of the licence areas.
The purpose of the review was to establish whether GSR complies with the environmental and socioeconomic commitments outlined for exploration licences and with the relevant legislation, as well as to identify any fatal flaws pertaining to the environmental, social and occupational health and safety issues of the exploration activities.
“WAI considers that GSR complies with these commitments and that it has adhered to the requirements set out in the licence documentation. GSR does not require spe- cific permits relating to the environment at this stage, as the current activities produce limited environmental and social impacts,” states the CPR, adding that no structured environmental or baseline studies have been undertaken.
WAI states that Sierra Leone is a stable country, which is attracting world-class investment groups, not only to its diamond industry but also to its gold, iron-ore, bauxite sectors and in heavy metals such as rutile and ilmenite.