Tietto Minerals (TIE.AX) released an anticipated resource update on its Abujar gold project in Ivory Coast which now includes 2.15 million ounces of gold based on just over 45 million tonnes containing roughly 1.5 g/t gold. Roughly 40% of the ounces are now part of the indicated resource category, signalling a higher confidence level in those ounces. What’s perhaps even more exciting is the high-grade core of the deposit which now contains almost 20 million tonnes of rock at an average grade of 2.2 g/t gold for roughly 1.4 million ounces of the precious metal. Subsequent drill holes have confirmed the mineralization continues below this high-grade core and the drill bit was successful in chasing the gold mineralization to a depth of approximately 400 meters. 8 more deep holes are in the lab and assay results of these holes (of which two contained visible gold) should be available shortly.
The global resource now contains approximately 25% more gold compared to the previous resource and this uplift of approximately 400,000 ounces was generated through just 20,000 additional meters of drilling, of which 5,000 meters were qualified as infill drilling (and thus helped to convert inferred resources into indicated resources but only had a small impact on the overall resource size). At this point, a 50,000 meter drill program is underway to further increase the currently known resource and to drill-test some of the regional targets in anticipation of a planned resource update in the third quarter of 2020.
Tietto has invested in an additional drill rig which increases the capex but thereafter strongly reduces the exploration expenses as the pure drill cost per meter of diamond drilling drops to just US$35/meter. To fund the ongoing 50,000 meter drill program, Tietto has raised A$17M at A$0.26 per share and a fist tranche of 29 million shares has already closed bringing the total share count (including the 94M escrowed shares but excluding in-the-money options and performance rights) to 301.5M for a current market cap of almost A$90M. That appears to be still reasonable for a deposit that now seems to have a good shot at pushing the global resource to in excess of 3 million ounces in the next resource update in Q3.
Disclosure: The author has no position in Tietto but is watching with interest.