Mining Minerals & Metals Share Discussion Threads

[bongo bwana] 01/6/2009 20:11

SS - thanks for some great reading.

[share_shark] 29/5/2009 23:09

Gold.

Long article but is does sparkle.




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Gold. It's been an object of fascination since the beginning of recorded history. Even today, the Indian wedding season creates a spike in demand for this commodity since wealthy brides wear it for their nuptials.

Indian households hold more than $460 billion worth -- about $395 for every inhabitant. Compare that to India's GDP per capita ($1,078), and it's equivalent to the average American family of four hoarding over $65,000 of the yellow stuff.

However, some Indian brides will have to make do with imitation gold this year; as one bride-to-be explained: "Gold is too hot right now." Too hot? I have an inkling it could be about to get even hotter.

Will gold break $1,000 (again)?
"It's not a question of if, it's a question of how soon," said Peter Munk, back in January. Normally, I don't pay too much attention to market predictions, but Munk is the chairman of Barrick Gold -- the gold producer with the world's largest reserves.

Investors aren't only buying gold exchange-trade funds (ETFs) such as the SPDR Gold Shares ETF. Munk also said that he's been taking calls from wealthy investors asking him how they can get their hands on the actual, physical commodity.

Is $1,000 per ounce just a step in a long climb?
Barely three weeks after Munk's call, gold broke the $1,000 barrier, closing just shy of its all-time high. Although it has since fallen back below $1,000, gold is still up more than 11% year-to-date against less than a 2% gain for stocks. However, some strategists are looking well beyond the $1,000 level for gold.

Citigroup recently said that gold prices would reach $2,000 per ounce. CLSA strategist Christopher Wood, who predicted Japan's "lost decade" in 1993 and the U.S. housing crisis in 2003, now says gold is likely to more than triple from its current level, to $3,500 per ounce in 2010.

Those numbers may sound fanciful, but Wood believes that policy reactions to rampant deflation will ultimately devalue the dollar. Moreover, there is a compelling case for a supply/demand imbalance that could drive gold prices substantially higher. After all, gold is in relatively fixed supply; as legendary value investor Jean-Marie Eveillard put it: "The market for gold bullion [is] a small market, so it could go very high."

Indeed, if investors were to shift even a small part of their portfolios from financial assets into gold, it could have a big impact on gold prices. According to Schroder Investment Management, the total value of gold above ground is an estimated $4.8 trillion, or less than 4% of the total value of global equity and bond markets.

For these reasons, and because of my deep misgivings about the way in which the government is taking on the current crisis, I think gold is an attractive choice as a portion of one's investable assets. I believe conditions look very favorable for gold to outperform the U.S. stock market in 2009 and over the next three to five years. Still, investing in gold isn't without its challenges.

"The people involved with [gold] seem to be slightly insane"
That's just one of the problems Societe Generale investment strategist James Montier has with gold. The other? "I don't know how to value it," he says. As a value investor, Montier is used to valuing assets in terms of the stream of cashflows they produce. Unfortunately, you can't draw cash from a gold ingot -- its value is determined wholly in terms of the vagaries of supply and demand.

With stocks, you don't have that problem. With some expertise, you can derive reasonable estimates of their intrinsic value, based on the cash flows the companies generate. And despite gold's attractiveness right now, there is no need to abandon stocks altogether. Some sectors are well-positioned to ride out a recession ... and the future wave of inflation. Combine that with valuations that are lower than they have been in years, and you get what I call gold-standard stocks.

Seven potential gold-standard stocks
The stocks in the following table were selected from four defensive sectors: utilities, health care, consumer staples, or aerospace and defense. All are trading at an adjusted price-to-earnings (P/E) ratio of less than 16 -- i.e., their earnings yield exceeds 6% in a world in which Treasury bonds are yielding less than 3%. (I calculate the adjusted P/E ratio by using the average earnings-per-share for the prior 10-year period.)

Stock
10-Year Average EPS
Adjusted P/E*

Cardinal Health (NYSE: CAH)
$2.44
14.3

American Electric Power (NYSE: AEP)
$2.36
11.0

CIGNA (NYSE: CI)
$2.14
10.2

Sara Lee (NYSE: SLE)
$0.97
9.3

Coventry Health Care (NYSE: CVH)
$1.97
9.3

Ameren (NYSE: AEE)
$2.98
7.8

Centerpoint Energy (NYSE: CNP)
$1.62
6.2


*Adjusted P/E based on closing prices on May 27, 2009. Sources: Standard & Poor's Capital IQ and author's calculations.


These aren't formal recommendations -- it would be misleading on my part to suggest that on the basis of a two-criteria screen. However, they do merit further investigation.

[share_shark] 29/5/2009 19:01

This may exhaust you reading this but it is worth having a gander at the article,in my opinion. Small piece on Glencar Mining.





Junior miners face tough times despite signs of optimism


29 May 2009

Signs of better times ahead for London-listed junior miners shouldn't be interpreted as the end of the depression that has ravaged the sector in recent months.

That's the view of industry analysts from business advisory firm Ernst & Young, who think that strict management controls on cashflow will be vital if companies are to survive in the near-term.

Where are the improvements?

"A remarkable reversal of fortune" is how Ernst & Young describes a 29% gain in its quarterly Mining Eye index during the first three months of 2009.

The index had recorded a drop of 46% in the previous quarter and a tumble of 75% over the whole of 2008. But a steady upward lift in the prices of some key traded metals now seems to have breathed new life into a flagging market.

That bounce is backed up by figures that show a sharp increase in the secondary fundraisings that AIM listed miners managed to pull off during the first quarter of 2009.

In total, investors were tapped for £239 million, up from £147 million in the last three months of 2008 and closer to the £295 million raised in the first quarter of 2008. All that, says Ernst & Young, points to the fact that funding is certainly available for the right kind of projects.



Ernst & Young's Dr Tim Williams: "The impact of the global economic slowdown has yet to be fully realised."

Nevertheless, fears remain about whether the full impact of the global economic slowdown has yet been felt among smaller explorers. Dr Tim Williams, director of mining and metals at Ernst & Young, reckons that despite the cautiously optimistic signals, it would be premature to suggest that the depression is over for AIM's junior miners.

"The number of delistings both this quarter and going into Q2 2009, combined with the number of companies warning of critical working capital restraints, is evidence that the impact of the global economic slowdown has yet to be fully realised," he said.

"Many companies remain unable to ensure the security of tenure of their projects beyond the next few months."

The number of mining companies delisting rose to nine in the first quarter quarter. But compared to overall AIM delistings – which topped 77 during the period – the number seems modest given the high proportion of mining firms quoted on the market.

According to the research, all nine delistings were a direct or indirect result of the difficult trading conditions. Indeed, a number of companies entered into voluntary administration arrangements to obtain protection from creditors while they attempted to restructure. Others warned of critical working capital deficiencies, default on payments due and the inability to raise sufficient funding to continue operating beyond the immediate future.

Securing the present

Despite the problems, it is thought that AIM mining companies in 2008 responded to the market conditions with speed and resolve to secure their futures – ranging from drastic cost-cutting, to suspension of activities, capital restructurings and asset disposals. For some, those actions have ensured their ability to continue as going concerns. For others, however, the obstacles to raising cash became insurmountable.

In January, African Eagle Resources plc shelved all of its exploration plans except for its core nickel project at Dutwa in Tanzania. Things looked brighter in May when it suggested that it could also be sitting on 700,000 ounces of gold at its Igurubi project also in Tanzania.

But it wasn't so good for Albidon Ltd, whose shares took a tumble in January after it reported that production at its Munali nickel project in Zambia was below forecasts. Its shares were suspended in March and the company slipped into administration the following month.

Elsewhere during the first quarter, international diamond miner Petra Diamonds Ltd revealed more details about a major exploration review at the company. Petra is aiming to build a cash-generative, world-class production portfolio and in doing so said it was slashing its annual exploration spend by around US$25 million.

Michael Lynch-Bell, head of EMEIA mining and metals at Ernst & Young, said that securing the present, through cost reduction and cash preservation, is, and must remain, the number one priority for AIM's miners.

"While the focus remains on survival, sources of funding are likely to remain scarce over the coming months and the junior miners are likely to face further distress, particularly those without a source of cash flow," he said.

"Effective management of working capital and cash flow will be critical to surviving the downturn."

Ernst & Young's research concedes that although it is likely that delistings will continue to outpace new admissions and the outlook for IPOs remain unfavourable, a number of companies have demonstrated that finance is available for the right projects.

In January this year, African Copper plc suspended operations at its Mowana copper mine in Botswana amid funding problems. That led to a battle between Australian miner Natasa and South African cash shell Zambia Copper Investments over who would step in to plug the financing. ZCI eventually sealed the deal in mid-May with a pledge to get the Mowana mine up and running as quickly as possible.

In February, European Nickel plc signed a financing agreement with two Chinese partners that included the provision of a guaranteed US$350 million debt facility to develop its Caldag mine in western Turkey. When it completes, the deal is also expected to include significant investments by Jiangxi Rare Earth and China Tianchen Engineering in European Nickel and the Caldag mine.

Elsewhere, Irish explorer Glencar Mining plc signed up to a deal that could eventually lead to a joint venture with South African gold mining giant Gold Fields covering Glencar's Komana licence. Details of the deal are still to be ironed out but the JV agreement are expected to see Gold Fields inject up to $32 million in return for a 65% stake in the Komana licence. The deal would also see an equity investment in Glencar of $3.2 million plus annual exploration option fees.

According to Ernst & Young, a clear strategic focus on investing capital and resources in the right projects at the right time is essential. It reckons that the strategy must be well-communicated to existing and prospective shareholders and will enable some companies not only to survive the downturn, but to thrive when the upturn begins.

Williams concludes: "While it is too early to talk of recovery, there is a noticeable change of sentiment in the market and an increasing expectation that the long-term fundamentals for the industry will drive prices on an upward trajectory once again."

[share_shark] 29/5/2009 14:59

So as not to strain the eyes the article continues thus and dont forget everything comes to he/she who waits.


The dollar meanwhile is at an inflection point, as are stock markets. It's as though they can't decide which way to turn. If stock markets turn down, money will move out of equities, back to cash and the dollar could rally. If they turn up, the dollar could plummet. Anyone interested in technical analysis, and in particular Elliot Waves, will note that the dollar has traced a 5-wave up and 3-wave down pattern. We are at an obvious point for it to turn up. If it does, gold will most likely pull back.



While we're on the subject of chart patterns, a number of analysts have become very excited about the enormous, bullish inverted head-and-shoulder pattern which gold has mapped out this last year.

What does that mean? It's a chart pattern which often indicates a change in trend, 'a major reversal pattern' says Stockcharts. The head and shoulders suggests a top and the inverted head and shoulders a bottom. Stockcharts describes the inverted version: 'The pattern contains three successive troughs with the middle trough (head) being the deepest and the two outside troughs (shoulders) being shallower.'

Gold has indeed mapped out this pattern, as the GLD chart above shows. This would presage a big move in gold to somewhere north of $1200. The volume levels are more or less text book too. But, again, before everyone gets too excited, the formation usually comes at the end of a long downtrend, not at the end of an uptrend as is the case here.

Gold miners are making more money

On the other hand, the action in gold stocks, which often lead the metal, has been very bullish and very exciting. I said back in November that gold shares, as opposed to gold itself, would be the best performing asset class of the next few years. This next chart shows the HUI, the index of US-listed gold stocks, over the last three years. There was a lot of resistance between the 300 and 375 levels and the HUI has broken decisively through.

[bongo bwana] 29/5/2009 11:02

Komana!!!!

Im feeling less depressed 1W and thanks once again.

[1waving] 29/5/2009 10:12

haydock - thanks. Was well worth it to get an understanding of a long RNS. I think the early paragraph relating to the global markets, lack of funding and reducing drilling set a poor tone at the start of the RNS and may have influenced how the rest of the release was taken.

I have gone through a little more info and am now quite pleased with the results. That has come from looking in particular at the successes at Bokoro and Fingouana and broadly at looking how the Sankarani shear zone has and will develop.

I agree that the timescales are very important. Gold Fields should be pressed very strongly to get Komana developed quickly and it does seem that agreement is there to develop aggressively and is off to a good start with drilling having recommenced already, but the pace needs to be maintained. As for Solona, that needs three rigs next season and a determination to end the season with a JORC resource, geology allowing of course.

The highlights of the RNS for me were from the new discoveries at Bokoro and Fingouana.
Bokoro
"Between November and December 2008 a follow- up programme of angled heel to toe air core drilling over the anomalous zone was completed. This delineated two parallel to sub parallel NNE trending shears within the anomalous zone. These two anomalous zones have a tested strike length of 6 kilometres each."
Both RAB and RC drilling has demonstrated decent grades over good widths from near surface mineralisation.

Fingouana.
" A target area of approximately 30 square kilometres straddling the Sankarani Shear Zone was initially covered with a RAB drill grid.and results indicated a 5,500m long by 800m wide north-northeast trending anomalous zone. A follow up programme of infill bedrock sampling was completed in December 2008. The results include two highly anomalous holes with values of 5.5grams/tonne and 7.3grams/tonne in holes approximately 550 metres apart at the core of an anomalous zone."
Further air core drilling, bedrock sampling and a couple of RC holes have given early signs of decent mineralisation over width from near surface mineralisation. Have a look at the exploration/drill plan map for Fingouana on the Sankarani project page of the website, that really does paint a picture.

There is one more statement from the Fingouana target sat on the middle of the shear zone which jumped out at me this morning

"An IP geophysics survey was completed confirming the presence of underlying dominantly N-NE trending structures with a probable crosscutting WNW-ESE fault structure potentially influencing mineralisation here."

Now where has that been heard before. ??

[haydock] 29/5/2009 09:36

Mineweb has it in a nutshell, exactly>

MINING FINANCE / INVESTMENT
UPWARD TRAJECTORY
Some signs of cautious optimism for junior miners - but cash remains king
Ernst & Young which publishes the Mining eye Index for junior mining stocks on London's Alternative Investment Market (AIM) says that movement this year suggests some optimism is returning to the market.

Author: Ernst & Young
Posted: Thursday , 28 May 2009

LONDON -

The Ernst & Young Mining eye index made a gain of 29% over Q1 2009, supported by steady upward momentum in the prices of some key traded metals. This is a remarkable reversal of fortune for an index that lost 46% during the previous quarter and 75% over 2008. However, the Mining eye still remains some 71% below its 2008 (and record) high and 26% below its 2004 base level.

Quarter one showed signs of cautious optimism for AIM's junior miners with secondary fundraising in the sector totalling £239 m, compared with £147 m in the previous quarter, and £295 m in Q1 of 2008, indicating that funding is available for the right projects. However, the full impact of the global economic slowdown has yet to be realised. AIM's miners continued to warn of critical working capital constraints and some entered into voluntary administration arrangements or defaulted on credit payments. The number of mining companies delisting also rose to nine this quarter.

Dr Tim Williams, director of mining and metals at Ernst & Young said: "Despite these cautiously optimistic signals, it would be premature to suggest that the depression is over for AIM's junior miners. The number of delistings both this quarter and going into Q2 2009, combined with the number of companies warning of critical working capital restraints, is evidence that the impact of the global economic slowdown has yet to be fully realised. Many companies remain unable to ensure the security of tenure of their projects beyond the next few months.

SECURING THE PRESENT

On the whole, AIM mining companies in 2008 responded to the market conditions with speed and resolve to secure their futures - ranging from drastic cost-cutting, to suspension of activities, capital restructurings and asset disposals. For some, those actions have ensured their ability to continue as going concerns. For others, however, the obstacles to raising cash are becoming insurmountable.

All of this quarter's nine delistings were a direct or indirect result of the difficult trading conditions and a number of companies in Q1 2009 entered into voluntary administration arrangements, to obtain protection from creditors while they attempted to restructure. Others warned of critical working capital deficiencies, default on payments due and the inability to raise sufficient funding to continue operating beyond the immediate future.

Michael Lynch-Bell, head of EMEIA mining and metals commented: "Securing the present, through cost reduction and cash preservation, is, and must remain, the number one priority for AIM's miners. While the focus remains on survival, sources of funding are likely to remain scarce over the coming months and the junior miners are likely to face further distress, particularly those without a source of cash flow. Effective management of working capital and cash flow will be critical to surviving the downturn."

LOOKING AHEAD: SURVIVE THEN THRIVE

Although it is likely that delistings will continue to outpace new admissions and the outlook for IPOs remain unfavourable, a number of companies have demonstrated that finance is available for the right projects. A clear strategic focus on investing capital and resources in the right projects at the right time - a strategy that must be well-communicated to existing and prospective shareholders - will enable some companies not only to survive the downturn, but to thrive when the upturn begins.

Williams concludes: "While it is too early to talk of recovery, there is a noticeable change of sentiment in the market and an increasing expectation that the long-term fundamentals for the industry will drive prices on an upward trajectory once again."

[bongo bwana] 29/5/2009 07:02

There is no doubt that 1W is correct in relation to the massively dilutive effect of a rights issue on the scale which would have earned the cash generated by the Komana JV with GF.


This deal was clever and timely - no doubt about that either and HMc & Co deserves a lot of credit for concluding same.

But from this point forward GEX needs to get cracking on generating independent revenue streams and this can be achieved by tidying up the outstanding JV's in Uganda and Ghana and helping to bring the Komana and Sankarani ore bodys to the crusher/grinder mills.

Concurrently they also need to get their asses into high gear on finding another high yield ore body which can be sold on or brought to production ASAP.

Shareholders expectations have been badly dented by the requirement to put our hopes on hold while GF makes steady progress with its Komana and Sankarani interests - probably a period of up to 3 years.

[serpicouk] 28/5/2009 21:39

Only glanced at the RNS:
This is what happens when a company keeps its affairs hidden from its share holders for the best part of a year. That RNS (whether deliberate or not) was impenetrable and makes the company look decidedly unfocused in its operations.

I think I'll review it over the weekend (from the above posts it sounds like a mixed bag) - I'm not surprised you're turned off by this company Deka - I suspect you're not alone.

[1waving] 28/5/2009 21:08

Missed another two license extensions called the Mossominian Extension which just extends the northern boundary edge of the Sanioumale East and West targets to the river and the southern edge of the Fingouana target to the river.

Another one around the Farasaba License to the river and country boundary called the Siradouba Extension.

Wouldn't be surprised to see further extensions added or for GEX to come up with the license for further adjacent areas. Not too many though, need to push hard at Solona with at LEAST three rigs there next season of which at least two should be RC/Diamond.

[haydock] 28/5/2009 19:17

If they pursue the advantage of the cash, with vigor in the next year, then there will be reason for optimism.
It certainly seems that much smaller gold finds, near the million mark will be taken out in the future.
It's wait & see at the moment, the market will react when there is something down the line.
Perhaps they should try for a little plot in Egypt, in the near future, only half joking.

[haydock] 28/5/2009 19:12

SS.
Borrowed for HER, zinc play on hold.
Regards Hay.

[1waving] 28/5/2009 17:05

The circumstances in financial markets dictated the recent JV now rather than later as GEX were running out of cash and a placing would have been massively dilutive, particularly at the low SP, and just a short term fix -- there would have had to be further placings and dilution for several years.

Whatever business model was intended has been circumvented by the current market conditions -- not in GEX control. GEX will end up with 30-35% of several million ounces in the JV with Gold Fields but does need to develop it's own operation.

Miners used to build up a big resource then start with mining, but the model of building a small but adequate resource and getting mining production going then building on that has proven poular and successful in recent years. That is the way Solona should go with adequate resource and feasibility. I hope the start small and build is impressed on Hugh at the AGM.

[share_shark] 28/5/2009 17:04

Gold to Rise on Dollar 'Weakness,' Deutsche Bank's Lewis Says
Share | Email | Print | A A A

By Alex Emery

May 28 (Bloomberg) -- Gold will rise this year as investors seek a haven from a slumping U.S. dollar, said Michael Lewis, head of commodities research at Deutsche Bank AG.

Investors concerned they may lose their savings as banks go out of business are also paying a premium to hold gold certificates through Exchange-Traded Funds, Lewis, based in London, said yesterday in an interview in Lima.

"The interest rate, exchange rate and equity environment still remains quite constructive for gold, particularly in the short term," he said. "We may see a bit more dollar weakness, and the appeal of gold will continue for inflation-hedging."

The dollar last week fell to the lowest this year against a basket of six currencies including the euro and yen. Bullion typically gains when the dollar weakens and oil rises. Oil futures rose 0.8 percent in New York yesterday and are up 49.5 percent since mid-February.

Gold futures for August delivery were little changed at $955.20 yesterday on the New York Mercantile Exchange's Comex division. Gold has risen 18 percent since mid-January, boosted by the global recession.

Starting in 2010 and for the next three years, other metals such as platinum, palladium and nickel will outperform gold as the global economy recovers from the worst slump in half a century, he said.

Zinc Prices

Zinc prices will recover quickly as mining companies have closed unprofitable mines, taking supply off the market, he said. Mining companies such as Glencore International AG, Pan American Silver Corp. and Volcan Cia. Minera have shut mines after the global crisis curbed demand for the metal, used to galvanize steel for use in cars.

Refined zinc production will fall about 240,000 metric tons short of demand next year, more than this year's projected shortfall of 25,000 tons, Desjardins Securities Inc. said in a April 27 report.

Agricultural commodities such as corn may rise in price this year as farmers cut planting because of a lack of credit, Lewis said. Soybeans may gain on "huge" Chinese demand, he said.

"Agriculture has an ability to rally even during economic downturns," Lewis said. "Fundamentals are tightening in some of these markets and that could come through into higher prices."

T

[1waving] 28/5/2009 15:17

Sankarani - Today's drill report starting from the North.

Bokoro and the Fie River extension.
At last the elusive orezone, with a strike length of 6 kms has been found. That area was creating quite a bit of head scratching as the indications were there and plenty of drilling has been done over the last couple of years. Reasonable grades over very good widths and from surface or near surface:--
" Between November and December 2008 a follow- up programme of angled heel to toe air core drilling over the anomalous zone was completed. This delineated two parallel to sub parallel NNE trending shears within the anomalous zone. These two anomalous zones have a tested strike length of 6 kilometres each. Several wide ore grade intersections were encountered including an intersection of 42 metres at 1.96grams/tonne from surface in BRAB652."
Other RAB grades include 27m at 1.7g/t and 21m at 1.9g/t

To follow up 13 RC drill holes have also been drilled in January confirming the mineralised structure with reasonable grades over good widths near surface including 27m at 1.9g/t, 25m at 1.3g/t and 10m at 2.5g/t. Also worth noting 1m at 25.9g/t at 139m downhole depth.

Bokoro now comes in from the cold and is looking good with this near surface ore body with good widths. Also now have the Fie River extension which adjoins the newly discovered Bokoro ore body target area and so far has had bedrock sampling done.


Sanioumale license and Bada extension.
Fingouana is a newer target which has now had initial drilling and is already showing very good potential, not surprisingly, as it straddles the main Sankarani shear zone.
" A target area of approximately 30 square kilometres straddling the Sankarani Shear Zone was initially covered with a RAB drill grid.and results indicated a 5,500m long by 800m wide north-northeast trending anomalous zone. A follow up programme of infill bedrock sampling was completed in December 2008. The results include two highly anomalous holes with values of 5.5grams/tonne and 7.3grams/tonne in holes approximately 550 metres apart at the core of an anomalous zone."
RAB drilling in February showed significant intersections of 12m at 6g/t, 9m at 1.4g/t, 3m at 3.8g/t and 3m at 2.6g/t. Extensive RC and Diamond drilling being planned here for next drill season. Early stage exploration done, next season will see what it is made of. Showing the early potential you would expect being in the main shear zone.

Sanioumale East & West ore bodies also fall into the main Sankarani shear zone just to the south across the river from Fingouana. Developing on the drilling done by Randgold where decent grades over significant widths were found, Gold Fields have built on this with a 2007 21 hole RC drill programme showing significant grades and widths near surface such as 22 metres at 1.6grams/tonne, 10 metres at 1.3grams/tonne, 14 metres at 1.0grams/tonne and 2 metres at 2.7grams/tonne. Two broadly parallel anomalies were delineated by a 2007/2008 bedrock sampling programme, with a strike length of approximately four kilometres each, bounded both to the north and the south by the meandering Sankarani River. A short RC/Diamond drilling programme has been completed recently to test the structure at 500 metre intervals over a strike length of 2 kilometres with best intersections of 19m at 2.4g/t and 20m at 1.5 g/t. An extensive reverse circulation target definition drilling programme to be conducted after the 2009 rainy season.
These established ore bodies in the main shear zone can be developed very quickly and demonstrate further the Sankarani shear zone's potential for large quantities of gold.

At Sindo bedrock sampling has been completed and in an email from Hugh a few weeks ago he mentioned that drilling was being done there so there may be results to come. The Bada extension is a welcome addition which has just had bedrock sampling done but is a prime piece of real estate as it is directly on the main Sankarani shear zone.

Farasaba.
At Kabaya South Previously reported drilling has delineated a north-northwest to south-southeast trending, westerly dipping, anomalous zone over an 11 kilometre long strike length. Drilling in the current drill season over three zones showed several mineralised intersections over significant widths were intersected but grades were generally not of ore grade. Better grades and widths have been found previously elsewhere on the Kabaya South area and future work here is likely to focus on locating higher grade zones along this persistently mineralised structure over the 11 kilometre strike length.

This comment from the release does seem quite apt:--
"Drilling programmes completed at seven targets continue to return encouraging results with results from Bokoro and Sanioumale and Fingouana in particular impressing."

The Sankarani shear zone is proving it's worth with the Bada Extension being a welcome acquisition. Those three areas look very good with Bada, Fie river and Sindo following on at earlier stages of exploration.

Accelerated development of Sankarani alongside Komana should be seen with Gold Fields resources applied to bring the project to fruition quickly to add to GF production and reserves, which have been declining, and adding value to Glencar for it's investors as the project advances.