Yacob Dewar Gold Deposit

Deep weathering of VMS deposits in the arid Arabian-Nubian shield can create an oxidised near-surface zone highly enriched in gold, as at Bisha in Eritrea and Hassai in Sudan.

The Yacob Dewar oxide gold deposit holds a JORC Indicated Resource of 80,000 ounces of gold at 2.8g/t.  The Resource report is available here.  Metallurgical tests have indicated that the gold can be efficiently extracted by cyanide leaching with better than 90% recovery. The deposit lies in the top 40m of a sequence of weathered rocks, within 6km of a sealed trunk road.

The project’s advantages (shallow depth, low strip ratio, relatively high grade, simple metallurgy) mean that it is likely to be very profitable despite its modest size.  Future upside is offered by known (though as yet un-drilled) satellite gold deposits within the licence area.

Andiamo has completed the resource geology and is well advanced with metallurgical and environmental studies.  Preliminary financial modelling has indicated revenues of $60 to 80 million over 2 to 4 years, with profits of $20 to 40 million. The capital requirements to obtain a mining permit, construct the mine and commence production are estimated to be $5M to $10M.

The possibilities of extending the Yacob Dewar gold resource with blind, faulted or en echelon extensions of the mineralisation will be tested by a programme of shallow RAB or air core drilling. Mineralisation at Ber Gebey, 3km north of Yacob Dewar will be tested in the same programme, followed by resource drilling.  An oxide copper resource associated with the Yacob Dewar VMS will also be evaluated.