At the end of last year, we attended Edgewater Exploration’s site visit to their Galician Corcoesto Gold Project. Right before the visit, Edgewater released the results of a Preliminary Economic Assessment on the project, outlining a 100kozpa operation with cash costs around $715/oz.

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Edgewater Exploration Ltd. – Corcoesto Site Visit


Egewater Exploration is a Canadian-based mineral exploration and mine development company with gold assets in prolific gold regions Ghana West Africa and La Coruña, Spain.

Together with FeatherStone Capital Advisors, Edgewater successfully secured two mid-stage gold projects from Red Back Mining and Lundin Mining. Red Back Mining, now Kinross Gold Corp., optioned to Edgewater the Enchi Gold Project in West Africa, Ghana, located 70 km southwest of Kinross’ 5 million oz Chirano Gold Mine. The Enchi Gold Project covers a 40 km strike length of the Bibiani Shear Zone that hosts a number of major gold mines and deposits including the Chirano Gold Mine and the 5 million oz Bibiani gold deposit.
In Addition, the Company owns a 100% interest in the Corcoesto Gold Deposit in northwest Spain as well as an additional 7 gold and gold-copper
projects totalling 50,013 ha in southwest Spain. Open in many directions, Edgewater believes the under-explored asset has the potential to expand beyond the current Resource Estimate.

At the end of last year, we attended Edgewater Exploration’s site visit to their Galician Corcoesto Project. Right before the visit, Edgewater released the results of a Preliminary Economic Assessment on the project, outlining a 100kozpa operation with cashcosts around $715/oz, and total capital expenditures of approximately $160M.

The Economics of the project

The final results of the PEA were a bit worse than we originally expected, but there still is a healthy margin if you take a goldprice between $1250-1400/oz as base case scenario.

There will obviously be some more finetuning (the strip ratio for instance should come down to 7:1 from the current 8:1), and we expect the numbers to change during the Pre-Feasibility and Feasibility studies.

There currently is a NI43-compliant resource estimate with approximately 1.45M ounces in all categories, but we are quite confident this number will grow towards the 2Moz mark.

The political support for the project

We were positively surprised by the support for the project from both the mayor of Cabana de Bergantinos and the Minister of Economy of the autonomous Galician region. Both the mayor and minister attended a company dinner, and answered all the questions analysts had. During this Q&A-session, it became very clear that both officials really want this project forward to move forward.
Minister of Economy Javier Guerra (Partido Popular) emphasized the fact that the Galician government considers Edgewater to be a good partner, and will continue to build on this relationship.

Mayor José Muino of Cabana de Bergantinos (Partido Popular) also pledged his support for the Corcoesto project in his latest re-election campaign, so Edgewater’s plans are supported by all local governments.
As the unemployment rate in Galicia is approximately 20%, the 250 new direct jobs at Corcoesto will have a positive impact on the region. Edgewater currently employs 38 locals, and will continue to hire locals as the operations expand. With the current total amount of 51 employees, Edgewater is already one of the biggest employers in the surrounding region.

What’s next for Corcoesto?

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  • CRN is currently completing an engineering study to construct a ramp, which will be used for advanced underground exploration. Construction of this ramp is anticipated to start H2 2012.
  • Edgewater is hopeful to have the mining permit by the end of this year


Enchi Gold Project

Harry Mustard, the Exploration Manager on Edgewater’s project in Ghana also attended the field trip, and gave a presentation on the progress at the Enchi project. Drilling is going well, and we can anticipate a preliminary resource estimate on the Boin, Sewum and Nyam zones later this quarter. Based on the preliminary assumptions and results, we are aiming for a resource estimate of approximately 600koz of gold.
Edgewater plans to start a Phase II drill program at Enchi later this year, consisting of about 25,000 meters to increase the resource estimate.


With two irons in the fire, Edgewater is extremely well positioned for this year. We will see resource updates on both projects, and as Corcoesto seems to be fast-tracked with the full support of the local governments, we can expect a lot of news coming out of Spain.

If we use a combined resource estimate on both projects of 2Moz, Edgewater appears to be undervalued at their current Enterprise Value of 26.8M and we expect a re-rating to occur.

Disclosure: Over the past 12 months, the author acted as placement agent for
Edgewater Exploration Ltd. and received a finders fee for his services. The author has visited the Corcoesto project in Spain in November 2011, and his costs have been reimbursed by the company. Please see our disclaimer for current positions.



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