Ampella Mining—Batie West

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Batie West: A brand new gold mine

There are not many companies who can hold their hands up and say that they have discovered a brand new gold province, but Ampella Mining Limited, a West Australian explorer, can do exactly that.

Ampella has a suite of quality exploration properties in Burkina Faso, West Africa. On a recent trip to London, U.K., Doctor Paul Kitto, Managing Director, and Evan Cranston, Executive Director, sat down with IRJ to talk about the company’s flagship project, Batie West. Batie West is a very promising never-before-explored project and in light of the company’s recent rebirth, Kitto and Cranston are expecting very big things from this, the jewel in Ampella’s portfolio.

The new Ampella and Batie West

Cranston says that when Ampella floated in 2007, the company had two tenements: one zinc project and one gold project.

“In about June/July of last year we underwent a company restructuring. Paul joined as CEO at the time, and he picked up Batie West, which is the one we are mainly focused on today,” Cranston says.

“We put a new Board of Directors in and, to date, we have been able to raise over A$25 million cash this year. We were basically reborn as a company mid-last year.”

Today, Ampella is 100 per cent focused on Batie West and the company is working to divest its other tenements: the Madougou and Doulnia projects.

“Our other listed project, the Donko project, is now part of Batie West. The tenement packages are all connecting up there,” Cranston says.

“We’re the first exploration company to ever set foot on this ground, and there has been no history of gold dating back from 2007 all the way to the 15th century slave trade. We’ve got some old 15th century workings on the tenements, but for the last 500 years gold hasn’t been explored for on any of this ground.”

“We believe we’ve selected what is a brand- new gold province. We’re saying that based on the size of the area and the amount of gold ore being discovered.

We’ve acquired five tenements which lock up a 110-kilometre-long shear zone and there’s evidence for gold occurring all the way along that length,” Kitto continues.

The Batie West permits cover an area of 1350 square kilometres and were acquired by Ampella 14 months ago. Since that time, the company has had three drill programs, totalling 25,000 metres.

“One of the prospects that we’ve concentrated on is called Konkera and we hope to have a resource out on that in early 2010. We just completed that third phase of drilling and we’re still waiting on some of the assays,” Kitto says.

“We’re very excited for the project and obviously Konkera is going to have a resource on it quite early down to around 100 metres vertical depth. It’s still open in all directions.to the north west, to the south east and at depth.”

On November 23, Ampella released their latest drill results for Konkera. “You can see that the assays we received confirm our expectations and we hope to have a JORC compliant resource out by early next year,” Kitto says.

“The sorts of numbers that we’re looking at—nine metres at 12.3 grams, 10 metres at 5.9 grams, 12 metres at 6.7 grams—they are really very exciting. They tell us that the style of mineralization, in terms of mining, will allow us to have an open-pitable operation and that’s exactly what you want if you’re operating in Africa.”

Two days later, on November 25, another press release announced that the company had raised $16.5 million to accelerate exploration at the Batie West project.

“Originally, the company announced that we were seeking to raise $12 million. We ended up issuing 30 million shares at 55 cents raising $16.5 million. The reason we increased the raising was due to it being four to five times oversubscribed after one day, so there was huge appetite for the placement,” Cranston says.

“We expanded it to try and accommodate all of the new institutional investors from Australia and the U.K. We have a very supportive shareholder base in terms of the quality, calibre and number of institutional investors, as well as the supportive retail mum- and-dad investors that have backed us since the beginning.”
This key base of shareholder support enabled Ampella to make the strategic decision to go full-steam ahead throughout the global financial crisis last year.

“The company had a couple of million dollars left in the bank and we decided that no one would invest in a company that sits on their hands and preserves cash,” Kitto says.

“Our shareholder base was very supportive and they underwrote a 2 million dollar rights issue earlier this year to keep us going.”

“Subsequently, we’ve had a great deal of exploration success and raised just over $25 million dollars to fund exploration going forward,” Cranston adds.
With capital secured and strategic goals met, Ampella also goes to great lengths when it comes to people power. The locals in the region of Batie West have never experienced mining before and educating them requires a truly expert board and team.

Ampella people

Cranston and Kitto explain that Ampella has been very careful to support and educate local communities about the impact of mining in their locality. The company’s efforts are bolstered by the wealth of support that mining has received from the government.

“The government came out in February of this year and said that they would like to be the fourth-largest gold producer in Africa within the next three years. They’re very much behind exploration and development. It’s the fourth poorest country in the world and they export beans and cotton, so the gold industry would be extremely important to this country,” Kitto says.

Four new gold mines have come into operation in the last two years and two more are in development, so the government are extremely pro-mining at this stage. We co-sponsored the Burkinabie Minister for Mines’ visit to Australia to show him what support there was for the mining industry and he was really shocked—totally blown away by the reception.”

On the week of November 30, Ampella arranged to take the community leaders from the Batie West district to a mining conference in Ouagadougou, Burkina Faso’s capital city.

“The conference will introduce them to what mining is all about and what it can do for the communities as well,” Kitto says.

“We’ve done a lot of infrastructure building and repairs for the community. We’ve also contributed to a lot of AIDS relief. We try to contribute and help out wherever we possibly can. We’ve assembled a board that is technical, and therefore understands the necessary processes an exploration company has to go through. We’ve got a very good group of people on the ground, who have experience living, working and being successful in the exploration game in Burkina Fasa—and having that network of contacts is very important.”

What’s next for the new gold province?

Kitto says that perhaps one of the biggest differentiators between Ampella and its peers is how far the company has been able to take the greenfields Batie West project in such a short space of time.

“We’ve managed to take a project that has had no work done on it whatsoever, and in just over 14 months we’ll have a JORC compliant resource. There aren’t many companies operating out there today who are able to do that. That just shows the ability of the group we have to achieve set goals,” he explains.

Kitto says that Ampella’s short-term strategic goal is to get that JORC compliant resource released to give the market confidence that Batie West has significant resource potential. Looking longer term, the company plans to prove up at least 2 million ounces in resource which will enable them to move the project on to pre-feasibility and development stages. While doing this, Kitto also says that the company will continue exploration and will look closely at the rest of the tenements and assess their potential.

“We’ve taken the first rock chips, dug the first trenches, drilled the first holes, and the exploration potential of this 110-kilometre-long structure is just enormous,” Kitto says.

“And we’ve been trying to do it as quickly and efficiently as possible. We’re not going to be one of those companies that does things nice and slowly. We understand that the market appreciates speed and the efficiency with which we’re delivering. We’re rated as one of the best explorers out there—which is great.”

It is plain to see why Ampella is viewed as a top explorer by the wider industry. An unexplored site, to a resource compliant property in just over 14 months, is no small feat. If this rapid and impressive progress is anything to go by, Ampella’s Batie West project could go on to become something really special within this coming year. 

www.ampella.com.au