If you are the typical small cap investor and not a geography buff, the chances are good that you have never heard of nor can locate the African country of Burkina Faso on a map. However, gold mining companies definitely know where Burkina Faso is located as it’s becoming one of Africa's hottest destinations for frontier mining with one small cap in particular focusing on finding the country’s next Mother Lode.
Investment Snapshot
Africa’s Greenstone Belts (which hosts all of the major deposits in Ghana and Cote d’Ivoire) continues northward into Burkina Faso wheregold production hit 45.5 tonnes last year – putting the country ahead of Tanzania as Africa's fourth-biggest gold producer after South Africa, Ghana and Mali.
According to the country’s mining minister,"there is gold everywhere in Burkina Faso…” which also has “huge potential in manganese, zinc, lead, copper, nickel and limestone."
As of last year, there were 10 goldmining operations in the country with another two gold mines under construction plus $100 million has been invested in exploration efforts.
Small cap Canada based Nexus Gold Corp (TSX-V: NXS; OTC: NXXGF; FSE: N6E) is a gold exploration and development company that’s operating primarily in Burkina Faso with three current mining projects. All three projects are currently the subject of a 4000-meter RC summer drill program.
In mid-June, Nexus Gold Corp made two announcements that will definitely lead to further news concerning results in the coming months that will have the potential to move shares.
What You Need to Know AboutBurkina Faso’s Mining Potential
Just how hot is Burkina Faso for gold mining? Earlier this year, OumarouIdani (the country’s mining minister) made the following comments in an interview with Reuters:
"There is gold everywhere in Burkina Faso, in every region… With this strong potential, naturally it is attracting investment."
"Burkina is more dynamic, and is progressing faster…We are second only to Democratic Republic of the Congo on the continent in terms of investment in exploration."
Note that as of last year, there were 10 goldmining operations in the country with another two gold mines under construction with the precious metal accounting for over 60% of total exports.Idani went on to say that$100 million has been invested in explorationefforts in his country and he added:
"Our big problem today is showing that we have other things besides gold. We have to diversify production. We mostly only produce gold, but we have huge potential in manganese, zinc, lead, copper, nickel and limestone."
That’s actually a nice problem for an African country to have for a change.
Moreover, Idaniexpects Burkina Fasoto produce a record 55 tonnes of gold in 2018 for a two-thirds increase fromjust five years agoand a tenfold increase over the past decade. Gold production also hit 45.5 tonnes last year – putting the country ahead of Tanzania as Africa's fourth-biggest gold producer after South Africa, Ghana and Mali (note that the latter two countries actually border Burkina Faso).
One of the major reasons Burkina Faso has excellent geological potential for mining and why it’s attracting gold miners is that the Greenstone Belts (whichoften contain ore deposits of gold, silver, copper, zinc and lead) hosting all of the major mining deposits in neighboring Ghana and Cote d’Ivoire continues northward into the country. So it’s natural to assume that gold and other important minerals can be found in the country.
Another major reason is that the country’s gold comes mainly mined from Proterozoic rocks and alluvial/eluvial deposits – a geological setting that is analogous to the prolific Precambrian gold belts of eastern Canada and in other parts of the world.
Finally, Burkina Faso comes with a stable political climate along with a pro-mining and foreign investment stance as the country’s government is trying to improve its economy by developing mineral resources that can be properly taxed and regulated (as opposed to small-scale artisanal mining which often damages the environment with no taxes or royalties being collected) and by improving infrastructure.
Nexus Gold Corp is a Pure Play Burkina Faso Gold Player
For investors looking to get in on the country’s gold rush, small cap Canada based Nexus Gold Corp (TSX-V: NXS; OTC: NXXGF; FSE: N6E) is a gold exploration and development company that’s concentrating primarily in Burkina Faso. The Company is currently concentrating efforts on establishing a compliant resource at one or more of its three current mining projects:
The 38-square km Bouboulou project comprises no less than five established gold zones contained within three separate 5-km long gold trends.
The adjacent 250-square km Rakounga gold concession extends the Bouboulou gold trends and currently contains three drill tested zones of mineralization.
The Niangouela gold concession is a 178-square km project featuring high-grade gold occurring in and around a primary quartz vein and associated shear zone approximately one km in length.
In mid-June, Nexus Gold Corp made two announcements that will definitely lead to further news about results in the coming months that would have the potential to move shares.
The first announcement was the commencing of a 4000-meter RC drill program at its three Burkina Faso projects. The summer drill program began immediately and will consist of approximately 2,000 meters of reverse circulation drilling on the Rakounga exploration permit and 1,000 meters each on the Bouboulou and Niangouela exploration permits. President & CEO Alex Klenman commented:
"This summer drill program, in addition to our current soil grid program, represent significant steps in the development of our Burkina assets. One of the primary goals of these programs at the combined Bouboulou-Rakounga concessions is to increase the size of the overall mineralized footprint while generating data to help establish the nature of the proximal relationship of the known gold zones. Niangouela is an earlier stage project, but the high-grade discovery we made there last year makes this a compelling project to pursue. We're looking forward getting back up there and exploring the new zone."
In addition to the summer drill program, Nexus Gold Corp also announced the initiation of a 105-line kilometer geochemical survey on the Rakounga permit. The survey is designed to aid in identifying gold mineralization which may occur in the nine-kilometer gap between the Koala showing on the Company's adjacent 38-sq km Bouboulou Gold Concession; and the Koaltenga showing, located on the western edge the 250-sq km Rakounga Gold Concession.
Klenman commented:
"We're pleased to get the 2018 work program underway. This is an important step in the development of Bouboulou-Rakounga. The area we're covering has the potential to significantly expand the mineralized footprint. Ultimately, we are looking at this project to produce a resource estimate and the data generated by this survey will move us closer to that goal."
Senior Vice-President of Exploration Warren Robb added:
"Given the gold mineralization we have already encountered on the Bouboulou and Rakounga permits, it makes this area highly prospective ground and it will be exciting to see what sort of numbers we get from this initial program.”
In light of the summer drill program and the geochemical survey, the SmallCap Network will be following Nexus Gold Corp closely over the coming months in anticipation of results that could send shares trading significantly higher.