Mako Gold Ltd (ASX:MKG) has kicked off a scout drilling campaign at the Tchaga North Prospect of its 90%-owned Napié Gold Project in Côte d’Ivoire targeting three high-grade zones identified from recent mapping and trenching programs.
The 1,500-metre reverse circulation (RC) first-pass program at the flagship project will target high-grade gold zones in east-west structures which have never been drilled at the Discovery Zone, Double Zone and Deep Artisanal Site.
In a show of confidence in the company and its Napié Project, a drill-for-equity agreement has been signed with drilling contractor Geodrill (TSX:GEO) for up to 50% of drilling costs to be paid in shares.
Drill for equity
This will enable Mako to maximize drilling metres while preserving cash and effectively allows the company to drill at half of its normal drilling contractor cash costs.
Mako’s managing director Peter Ledwidge said: “The drill testing of the three high-grade prospects is just the beginning of what may unlock further significant gold mineralised zones. These zones could contribute towards an increase of the current 868,000-ounce gold resource on the Napié Permit.
"We are pleased to have secured a drill-for-equity agreement with our drilling contractor, Geodrill, which will help us preserve cash while achieving our goal of drill testing the high-priority targets identified by our recent 'boots-on-the-ground' fieldwork.
"We have a long-standing relationship with Geodrill and have always been impressed with the quality of their work, including their extraordinary ESG initiatives in the communities where they operate.
“Geodrill has been on the MKG share register for some time and we welcome their further investment in the company.”
Tchaga North with new high-grade zones recently identified by mapping.
The drilling targets
The Discovery Zone Target (NYSE:TGT) is named after the discovery drill-hole drilled in 2018 which returned 8 metres at 8.53 g/t gold as well as one of the early diamond drill holes which returned 1 metre at 215 g/t.
Previous drilling did not test the east-west structures identified by mapping and trenching. Fieldwork by Mako geologists identified these structures which host high-grade gold in rock chip sampling.
Trench NATR002 intersected high-grade gold in east-west quartz veins. The trench was only 20 metres long but returned 4 metres at 3.97 g/t, including 1 metre at 14.80 g/t, and 4 metres at 1.79 g/t, including 1 metre at 5.34 g/t.
Other than a four-metre section which was not sampled due to the presence of overburden, the majority of the trench was mineralised.
The planned drilling will be oriented towards the north based on new information from the recent mapping program.
Double Zone hosts several artisanal workings which reach approximately 10 metres vertical depth in some pits.
Rock chip samples from the miners’ reject piles returned 44.73 g/t, 22.46 g/t, 16.78 g/t, 12.85 g/t, 6.29 g/t and 4.86 g/t gold. In addition, trench NATR008 returned 5 metres at 1.12 g/t, including 2 metres at 2.29 g/t.
Trench results extended the strike length of the zone by 100 metres to the east and Double Zone now extends more than 400 metres with mineralisation open along strike to the west and east.
Previous drill holes, including 1 metre at 44.86 g/t in hole NARC819, were drilled to the east and would not have intersected the newly discovered high-grade quartz veins which are oriented east-west.
Once the site of considerable artisanal mining, the activity at the Deep Artisanal Mining Site is now significantly reduced, with only a handful of miners remaining on site, as the water table and hard rock limits their digging.
Artisanal miners have hand-dug pits down to approximately 40 metres in places. Results of sampling of quartz veins retrieved by the miners include 24.34 g/t, 9.47 g/t and 4.55 g/t gold.
In order to properly test this target, four scissor holes (two towards the northeast and two towards the southwest) are planned to intersect the structures at a vertical depth of 50-60 metres below any disturbed ground.
This zone can be traced over 200 metres, remains open in all directions and has never been drill tested.
Following the drilling and pending positive results, the company will plan further work, including drilling, at these targets.
Geodrill agreement
The new agreement with Geodrill is an addendum to the 2023 binding Memorandum of Understanding (MoU).
After receipt of the invoice, and with the issue price for each share being the previous 15-day VWAP immediately prior to the date of the invoice, Mako may issue MKG shares to Geodrill, constituting up to 50% of the invoice for drilling services provided and pay the remaining balance in cash.
The drilling company has agreed to a three-month escrow on shares issued to them and thereafter, to notify Mako of its intention to sell shares 5 days in advance.
“Geodrill is proud to be partnering again with Mako Gold on their Napié Project," said Geodrill’s chief executive officer Dave Harper.
"We have had a long and successful relationship, having previously drilled on multiple discoveries with the management team in West Africa. One of the discoveries went on to become a major producing mine.
"The drill-for-equity arrangement allows Mako to drill twice the meterage for the same cash burn, doubling the likelihood of success, while at the same time providing flexibility to revert to cash payment, should Mako elect to. We look forward to increasing our shareholding in Mako.”