African Gold Group Inc. (TSX-V: AGG) is up 8 cents to 44 cents a share this morning after announcing it has hired Mali-based AMCO Drilling Mali SARL to perform drilling for its upcoming Kobada campaign in the area. According to Dr. Andres Rompel, African Gold’s vice president of exploration, the goal of AMCO’s program will be to “upgrade the quality of the resource” and to “drill additional holes” into other prospective areas the company has identified in the region.
Right now, there isn’t a stated timeline for the project. However, AMCO’s commercial manager James Blakely stresses that its team is experienced in working through Mali’s rainy season, which typically runs from June through October or November. Hopefully, this will “expedite the drilling program,” as Blakely says it will.
It’s the latest in a string of similar announcements for the project. Last week, the company hired Minxcon Consulting Pty. Ltd., an advisory company that primarily focuses on geological project management in Africa, to “oversee and manage” the Kobada undertaking. AMCO will be working closely with Minxcon as it proceeds to drill 15,000 metres for the upcoming assay.
Earlier this month, African Gold hired SENET, another West African company, to conduct an updated feasibility study for the Kobada project, expected by April 2020. An earlier feasibility study, completed in February 2016, indicated a proven and probable reserve of 12.7 million tonnes of ore with 1.25 grams of gold per ounce, totalling 511,000 ounces. The company calls these previous results “compelling” on the Kobada project page, but says that it is undertaking these internal studies in order to “optimize the size of the envisioned mine” and “increase [its] confidence in the resource model.”
In addition to African Gold’s hiring spree and its efforts to restructure its corporate team this month, the company has been busy raising money. It arranged a $3 million private placement in mid-August for 14,285,714 units at 21 cents per unit, to provide funding to the Kobada project and “for general corporate purposes.”
That financing closed on Aug. 27, but the company announced a secondary private placement on Aug. 22 to fund the same near-term construction plans. The company is looking to sell 11,363,636 units, at 44 cents per unit, totalling $5 million. Unlike the previous financing, each of these units also includes a warrant with an exercise price of $0.60 and which expires two years down the road. The offering is expected to close on September 4.