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John Hannaford - Monteray Mining

Thursday, November 15, 2012

ONE OFF THE WOOD: We welcomed Monteray Mining (ASX: MRY) director John Hannaford to the front bar this week as he settled in to tell us how exciting exploring for gold in Burkina Faso can be.


There are a lot of companies in Burkina Faso these days, where does Monteray Mining fit in amongst the crowd?

We are a start-up company in every sense of the term in that we are about to commence our first major drilling program in Burkina Faso where we have eight licences covering 1200 square kilometres.

Companies operating in Burkina Faso tend to have people on the ground. How are you placed on that score?

We are just in the process of appointing a CEO and looking to appoint in-country management in Burkina Faso in the near term.

As part of one of the Burkina acquisitions we welcomed Andrew Habets to the Board.

He is a very experienced geologist with extensive West African experience in terms of his knowledge of the region and contacts he has, particularly in the gold sector.

Andrew is a real asset for Monteray in being able to get things done on the ground as well as being able to identify new project possibilities for us.

Was Burkina Faso your first choice as a mining jurisdiction?

We looked at a number of opportunities around the world, but we were really after something with potential to become a plus-one million ounce gold project.

We looked at areas where there are not only known occurrences of mineralisation, but also mines being developed.

In that respect it didn’t matter where we stuck pins on the map our attention kept being drawn to Burkina Faso.


What was it that sold you on Burkina Faso?

We consider the country offers the best value for our exploration dollar – for a number of reasons.

A major one being it has the lowest discovery costs in Africa at around US$16 per ounce; if you take into consideration what an ounce of gold may be worth in the development scenario, it’s a really good leverage position versus the risk of putting your money into exploration activities.

Burkina Faso boasts the highest number of new mines brought on-stream in West Africa over the past five to six years, with a number of new mines ready to come on board.

One thing that did stand out as a very important factor for us as a junior company is the ease of getting exploration done in Burkina.

Its terrain is similar to that surrounding Kalgoorlie, which means you can easily access sites in four-wheel drive vehicles. The infrastructure throughout the country is really quite good.

A lot of service companies have based themselves in the capital city of Ouagadougou, pretty much in the geographical centre of the country. There must be some advantages in that too?

This means they are only a half a day to a day’s drive, tops, from all project areas around the country.

It just makes it easy to get around and for a small company it simply means we can accomplish things much quicker, such as commencing exploration drilling and getting the results of those programs out.

Can you tell us a bit about the projects you have acquired?

We completed two acquisitions in 2012, picking up 100 per cent rights to eight granted permits covering 1,178 square kilometres across three project areas.

All the tenements are located in regions that have yielded significant gold discoveries.

We consider the quality of the portfolio stems from its locations as well as what we would describe to be a clean ownership structure.

We own 100 per cent interest in all our projects, which all have long-life permits with a long way to run.

Are the projects all together or spread across the country?

Our project portfolio sits predominantly in two main areas.

We have five permits in the Mana region, which sits in the central western part of the country and follows the extensions of structures of TSX-listed Canadian company SEMAFO’s 6.8 million ounce Mana mine.

This is their flagship project, currently producing 140,000 ounces of gold per year and they are looking to expand to a scenario they have labelled the Super Pit, which is expected to take it up to around 300,000 ounces per year, making it the biggest gold mine in Burkina Faso.

Our focus there will be to identify something along strike from a major gold discovery and mine.

The second main area is situated in the central area of the country on the Sebacé shear zone and is along strike from the 1.7 million ounce Bissa project of High River Gold.

This is a highly-regarded project that is expected to commence production next year.

Our ground there is 500 square kilometres of completely untouched terrain sitting along strike of Bissa, a 1.7 million ounce ore body.

Let’s take them one at a time. What are you expecting to find on the Mana region tenements?

SEMAFO has a number of projects along the Mana shear zone where they have been conducting a lot of drilling adjacent to our licences.

What we are looking for on our tenements is extensions to that shear zone, both to the west and to the east.

On the western zone there is some sedimentary cover that we believe is covering up some parallel structures, which we have identified from aeromagnetic imagery.

Even though there is sedimentary cover our exploration work so far has shown good anomalies under that cover.

MMI work at the Tigan permit has uncovered a very strong gold and multi-element anomaly that is consistent with what we are seeing running off the Shear Zone.

Our plan is to commence auger drilling on that anomaly in the next month with a view to identifying targets to drill with a RC rig early in the new year.

We have also identified other soil anomalies on the southern group of tenements and we will be commencing infill soil sampling later this year, again with the outlook for conducting a drilling program early next year.

That sounds pretty exciting. Will the Sebacé shear zone projects be as good?

We consider that project area, the Pepin and Giumba permits, to be our most prospective.

It is completely virgin terrain. Nothing has ever been done there, apart from some artisanal mining.

It is in an area of great current activity; the 1.7 million ounce Kalsaka mine of Cluff Gold and the Bissa project has been permitted and High River Gold will be developing that early next year. Also, Riverstone’s Karma project, a little further to the north, with a 2.3 million ounce resource is planned to be developed in the next few years as well.


We are anticipating an extension here of the Sebacé shear zone that High River Gold has been successfully exploring.

Just to put this in perspective – the Bissa project is expected to be a mine of around 140,000 ounces per year at cash costs of around US$550 per ounce.

So, here we are sitting on un-drilled terrain, along strike from a major gold mine. This to me is why we are in the junior resources exploration game.

These sort of opportunities just don’t come along too often; we consider there to be obvious extensions to this shear zone that go right through our permit area.

The challenge for us is that it is 500 square kilometres of permit to be explored.

That means we have to go about things the correct way in order to narrow down the drilling opportunities, rather than just going in and poking holes in the ground.

We feel this area holds huge potential for Monteray to find a potentially one million ounce ore body.