Three Buying Opportunities In A Resurgent Gold Market

Approximately 450 meters to the west the survey identified another similar structure. This one does not outcrop and has not been drill tested, so it could represent another good target.

Finally, the survey showed that the known normal fault in the Dark Star Corridor extends 700 meters farther along strike than known to the north, under cover.

They are just geophysical targets, so take from it what you will. That being said, geophysics well interpreted can be the tool that uncovers new zones in the Carlin Trend.

The third company is Orezone Gold Corporation (ORE:TSX) (ORZCF), which just announced that it is selling its Bondi project in Burkino Faso to Sarama Resources Ltd. (SWA:TSX.V). It was the right thing to do, as Orezone is focused on Bomboré, the largest undeveloped oxide gold deposit in West Africa–and one of few sizeable gold projects in the world that should soon be permitted and completely ready for construction.

The feasibility study, released last April, outlined a combined heap-leach and carbon-in-leach operation producing 135,000 ounces (135,000 oz) gold annually for the first eight years. That's a big enough number to matter to a major.

It is expected to cost US$250 million to build the mine, which should then be able to produce gold at an all-in sustaining cost of US$678/oz. That enables a 24.4% after-tax internal rate of return, using a gold price of US$1,250/oz.

Costs are low because the operation is straightforward. The strip ratio is just 1 to 1. The ore does not need to be ground.

Two milestones approach for Orezone: the final permit, expected in the next few weeks, and an updated resource estimate incorporating another 50,000 meters of drilling, expected in the third quarter.

The permit is expected before the middle of June, which means it should be issued around the time of Janet Yellen's rate decision. Whichever way that decision goes, I expect gold to start moving up again after—quickly if the decision is no raise, slowly if the decision is to raise.

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