Could you comment on the PEA Newcore Gold released earlier in 2024 for the Enchi gold project in Ghana?

The PEA, which was published in April 2024, outlined extremely robust economics. For the base case scenario at a US$1,850/oz gold price, we have an after-tax NPV of US$371 million and an after-tax IRR of 58%. Additionally, we benefit from significant leverage to the gold price - every US$100 increase in gold price translates into a roughly US$50 million increase to the after-tax NPV, which is more than the company’s market capitalization as of September 2024. If we consider the top-end scenario of US$2,350/oz as outlined in our PEA, the NPV increases to US$630 million, with the after-tax IRR rising to 92%. For 122,000 oz production over a 9-year mine life, the after-tax payback period is 1.6 years, or just over 1 year at a US$2,350/oz gold price. We are now preparing to advance Enchi to the pre-feasibility study (PFS) stage.

What do you think the market wants to see to justify moving Enchi into production?

The current economics are compelling enough to justify advancing the project towards a PFS and moving the project towards a construction decision. However, the real upside lies in the district-scale exploration potential. We have identified 25 exploration targets to date, of which only five are currently included in the PEA and Mineral Resource Estimate (MRE), leaving 20 additional targets for future growth. Recently, we expanded our tenement with a new license and launched a 10,000-m RC drilling campaign in July 2024. The goal of this infill program is to upgrade inferred resources into the indicated category. Currently, a pit constrained MRE for Enchi was completed in 2023 and outlined 743,500 oz gold in the Indicated category and another 972,000 oz in the Inferred category.

Our current deposits all remain open along strike and at depth. Enchi is still underexplored for sulfide potential with the vertical depth of all the pits containing our resource within the PEA only defined down to around 75 m. The mines sitting along trend with Enchi – including Asante Gold’s Chirano and Bibiani mines, as well as Newmont’s Ahafo mine – are defined down to a depth in excess of 1 km below surface, which is telling of the geological characteristics and potential of the area. 

Do you think high gold prices will entice more generalist investors into the sector?

Producing gold companies are seeing a significant amount of free cash flow generation, with every move in the gold price going directly to their bottom lines. This is inevitably going to pull in generalist investors. When you see an incremental number of these new buyers invest in the sector, you generally see gold stocks really start to move up. The other important piece is operating costs coming down as inflation starts subsiding. That also contributes to flattening all-in costs and higher margins, and therefore outsized returns for producers.

How does West Africa compete as a destination for gold exploration and production?

West Africa has an impressive record of delivering projects on time and on budget. Ghana, in particular, is Africa’s largest gold producer and the sixth largest globally. Notably, a significant amount of gold production is anticipated to come on stream from meaningful projects across the country over the next 12-months: Shandong’s Namdini mine is targeted for first gold production in late 2024, adding approximately 370,000 oz/y; Newmont’s Ahafo North expansion is targeted for first production in 2025, adding between 275,000 and 325,000 oz/y. Ghana is keen to see projects being built and is a pro-development country. At Newcore, we are fortunate to have amassed such a large land package in a top-tier gold mining jurisdiction.

What should we expect from Newcore in the coming months?

Drill results will be a key catalyst for the company and an important component of our newsflow in the coming months. We will also continue to release results from on-going metallurgical test work, alongside other de-risking work such as hydrological, baseline, geotechnical, and engineering studies that are crucial to advancing the project towards a PFS. Having completed a financing of C$5.5 million in September, along with C$3.3 million of proceeds from warrant exercises received at the end of June 2024, we are well funded for the 10,000-m drill program underway at Enchi as well as the continued de-risking and development of the project as we prove out the district scale potential.