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GLENCAR MINING GEX

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I have an interest in Glencar Mining which is purely a gold play and am relatively new to investing in mining explorers and would be interested in how such a company should be valued through the stages of development. Website www.glencarmining.ie

 

Glencar has a project in Ghana and a further two early stage license areas in Uganda which are of little consequence at present. It is their five license areas in Mali which are important. Three of these areas are in a farm in/JV with Gold Fields s.a. with the other two being retained by Glencar. These two are Solona and Komana. It is Komana which has been advanced rapidly and the initial resource estimate came out in October.

 

That recent JORC compliant resource estimate came in at 520,000 oz with SRK Consultants report also stating that due to the sparse drilling within parts of the estimate area, there needed to be further infill drilling which would probably increase the estimate by 200,000 oz. Komana West is also open at depth and along strike to the North and South. Glencar have drilled to the North and South and it looks like the orezone continues several hundred metres to the South. The zone to the South of the estimate area looks to be wider but with lower grades, with potential high grade shoots. The best grade was 733gm/ton over 1 metre. A further 4000m of RC/Diamond drilling to test for extensions at depth and infill in the resource model area and test the areas marginal to the zone has been completed in late 2007 together with 5800m of RAB drilling to test the extensions to the North and South. Drill results are expected within the next few weeks.

 

The Komana East prospect area was drilled originally by a previous license holder (Randgold ) and they estimated a non- JORC compliant resource of 280,000 oz. Further drilling here commences in January.

 

Within the Komana license area, about 9 kilometres South of Komana West and directly South along the hosted shear zone, lies a further three drill ready target areas which will be drilled in the current drilling season which lasts until June. High grade rock chip samples have been taken from this area and there could be very strong potential here.

 

That is just the Komana license area, the further 4 license areas in Western Mali will count as a bonus. Two potentially decent orebodies have been found in the Farasaba and Sanioumale license areas which are in the Joint Venture/farm in deal with Gold Fields s.a. A major airborne magnetic and radiometric survey is due to start on Jan 14th over all five license areas.

 

My questions relate to valuation and cost.

 

Firstly, with what is known how would you value the Komana project and what would be added to that value from what is expected ? How would the additional areas be valued ?

 

Secondly, at Komana West much of the gold is coarse and occurs free as well as in intrusions in the shear zone and is likely the recovery process will be carbon in pulp with the mine being open pit. How much would the recovery process cost per oz in comparison to other methods ?

 

Any other opinions on Glencar would be helpful whether good, bad or indifferent.

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I have been following Glencar (GEX.L) also, but have found the share price very eratic, from my limited knowledge.

 

They went to 14p and then all the way back down to 7p. I found it strange that the price dropped so significantly when they had published 'good' results.

 

If anyone can shed any light on how this would be valued it would certainly help my understanding a lot also.

 

 

http://bigcharts.marketwatch.com/advchart/...25774&time=

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Having looked at a post by DrBubb I revisited the technicals on Glencar - The following may be of interest.

 

After discovering a good strike at Komana West in Mali in late 2005 the shares rose to a peak in early 06. From there the chart has formed an A-B-C down with volume drying up on the C leg. Try looking at this on a weekly chart with a 14 period RSI and volume histogram. The volume is distorted by Glencar's previous funding arrangements ( which ended in Aug/Sept '07 following a private placement ) which caused a volume spike once a month however it is still apparent that volume has dried up. The 14 week RSI is just coming up through 30. This is quite a classic pattern with the excitement of the discovery then a fall away. There is news due in the next few weeks of 9,800m of drilling completed in late '07. Those drilling results could be the catalyst for the next leg up.

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Having looked at a post by DrBubb I revisited the technicals on Glencar - The following may be of interest.

 

After discovering a good strike at Komana West in Mali in late 2005 the shares rose to a peak in early 06. From there the chart has formed an A-B-C down with volume drying up on the C leg. Try looking at this on a weekly chart with a 14 period RSI and volume histogram. The volume is distorted by Glencar's previous funding arrangements ( which ended in Aug/Sept '07 following a private placement ) which caused a volume spike once a month however it is still apparent that volume has dried up. The 14 week RSI is just coming up through 30. This is quite a classic pattern with the excitement of the discovery then a fall away. There is news due in the next few weeks of 9,800m of drilling completed in late '07. Those drilling results could be the catalyst for the next leg up.

 

As an additional point the price movement may be conforming to Elliott wave theory. The rise to an impulsive peak in early '06 can be counted as wave 1 with the corrective phase a-b-c counting as wave 2. Should this be the case wave 1 saw a rise of 14 pence, with wave 3 being the strongest and longest, this implies upside of at least 14 pence. A very interesting chart technically. watch carefully for signs of a break up.

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After reading of the importance ot the 200wk M.A. in the members/educational section have checked this out with Glencar and the price is now sat on that M.A with drilling results to come in a couple of weeks. Add this to the above and what do you get ?

 

Sat on 200wk M.A. with newsflow to come

 

Is this a GIP ?????

 

Would appreciate comments

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bigbf4.gif

 

Hiya, Bubb is a much better chartist than me, so await his comments, but ...

 

it isn't a conventional Bubb GIP because the company isn't old enough yet to be bouncing off a 200-week moving average.

 

I don't know the company, but it looks like selling has mostly dried up and it is finding a bottom here.

 

Is this an AIM stock?

 

Like many juniors it has been declining in the face of rising gold, which must be most frusrating for holders. It needs to get above those MAs. Maybe the results will get it above there into an uptrend.

 

Your risk-reward looks pretty good here. but beware AIM stocks ...

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bigbf4.gif

 

Hiya, Bubb is a much better chartist than me, so await his comments, but ...

 

it isn't a conventional Bubb GIP because the company isn't old enough yet to be bouncing off a 200-week moving average.

 

I don't know the company, but it looks like selling has mostly dried up and it is finding a bottom here.

 

Is this an AIM stock?

 

Like many juniors it has been declining in the face of rising gold, which must be most frusrating for holders. It needs to get above those MAs. Maybe the results will get it above there into an uptrend.

 

Your risk-reward looks pretty good here. but beware AIM stocks ...

 

 

 

This is an AIM stock ------- My chart database on this goes back to 1994 ---- Company history states entry to stock exchange 1983, admitted to AIM Sept 2005. Company history below.

 

1971 - Company incorporated as Glencar Explorations Limited

 

1983 - Company reregistered as public limited company (plc)

1983 - Entry to Stock Exchange

1986 - Discovered Teberebie Gold Mine in Ghana

1989 - Sold interest in Teberebie to Pioneer group Inc.

1994 - Discovered Wassa Gold Deposit

1997 - Company changed name to Glencar Mining plc in May 1997

1998 - Commenced construction of the Wassa mine in February 1998

1999 - Commenced production at Wassa in January 1999

2001 - Produced 250,000 ounces at Wassa by November 2001

2002 - Sold interest in Wassa in 2002 in sustained weak gold market

2003 - In April 2003 signed Letter of Understanding to acquire the 1,000 square kilometre Sankarani Project in Mali.

2005 - June 2005 announced plan to list on AIM

2005 - Admitted to AIM on 23 September 2005.

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Can you post a 3 or 5 year weekly chart and run simple moving averages at 18, 52 and 200 ?

 

Beware AIM stocks because

 

1. The market is totally illiquid

2. The market makers put such wide spreads on small caps you can find yourself 20% underwater straight after purchase - and it's worse when you want to sell.

3. the market does not undertsand, appreciate, value or, indeed, take any interest in explorers, so even if you declare fab results the market will not give a toss.

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PS What a mistake selling Wassa was in 2002? A 250,000 ounce producing mine! Whoops

 

Do the management get gold? Amazingly, many miners don't.

 

You're certainly doing your due diligenc eon this one though. Fair play to oyou

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Frizzers, may be technologically challenged on posting the chart from my end of day Sharescope database. Can anyone else lend a hand here.

 

Wassa was an unfortunate consequence of the gold price at the time.

 

The company's history does show a track record of discovering 2 major gold deposits, I'll look forward to the third at Komana !!

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The first drill results/update of the current season came out yesterday in quite a lengthy detailed release. Strong and positive results. A summary of key points and comments follow:-

 

In and around the Resource Estimate Ore body at Komana West - (REO)

‘Extensively mineralised zone running from 119metres to 246 metres depth.’

Ore grade mineralisation at depth perhaps more variable.

38 metres at 38.9gm/t from 94 to 132 metres depth in Bonanza zone

Extensions at depth to the REO

 

In the South of the REO

‘Many of these holes intersected mineralisation at a higher grade and thickness than had been seen in some of the earlier holes in the same area’

Bodes well for the 200,000oz increase within the REO as stated in the SRK resource report

 

Western extension.

KWRC119 and 120 drilled to test western parallel structure intersects a very promising mineralised structure.

Additional North South trending structure found to the West ?

Existing resource based on a N-S trending main mineralised zone and an East ridge.

Needs more drilling but certainly adds to the overall mineralised zones.

 

North of the REO

RAB drilling finds ’significant mineralisation’ in a number of holes to the East of the originally projected Northern extension zone. 4 RC holes drilled - results awaited.

Additional orezone.

 

South of the REO

Not a lot on this but previous RC drilling indicates the mineralisation extends several hundred metres to the South and is generally wider but with variable grades and potential for very high grade shoots. Best grade 733gm/ton over 1 metre.

 

Awaiting results of 22 Diamond and RC holes drilled in and around the REO.

 

Soloba - 3.5kms to the South of KomanaWest

RAB drilling picks up a ‘zone of significant mineralisation’ to be followed up by RC drilling in a few weeks.

 

Kama - 9kms to the South of Komana West

5 RC holes drilled with mineralisation found in 3. Needs more drilling-Airborne survey may help to define this target more clearly

 

The strikes at Soloba and Kama give credibility to the ‘string of pearls’ theory or a series of strikes along the North South trending hosted shear zone running through Komana license

 

Komana East - RC drilling going on here, non JORC estimate by previous license holder ( Randgold ) of 280,000oz. From memory I believe the cores and samples from Randgold’s drilling are still held which will help with producing a JORC compliant estimate here.

 

Solona license area - RAB rig now drilling 3 targets there.

 

High resolution aeromagnetic survey currently underway will give great assistance in defining targets on all 5 license areas .

 

Expect further strong newsflow for 7-8 months culminating in increased JORC estimate. Drilling season Oct-June.

 

Full release and drillplan maps at http://www.glencarmining.ie

 

Glencar is quoted on ISEQ and AIM

 

DYOR

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In trying to answer the question in my first post on this thread and put a reasoned value on Glencar, I stopped at a point where I realised that their strikes at Komana were possibly being valued at $10 to $20 per ounce.

 

They currently have a market cap of £18.2m and had over $4m in the bank in January as stated in a Minesite article. This cash will be ‘burned’ over time but will increase ounces. They have 4 license areas in Mali in addition to the Komana license, a license area in Ghana which does have an ore body which they are looking to J/V, and two early stage licenses in Uganda which I have discounted for valuation purposes.

In looking to put a value on these, the Ghana license area does have potential, 2 of the 3 areas in a farm in deal with Gold Fields do have small initial strikes with the 3rd nothing of note as yet. The final area held by Glencar at Solona has had very modest results so far and 3 targets are being RAB drilled there at the moment.

 

I put a value of £2m on each of the 3 licences with strikes and half a million on each of the licences without, making a total of £7m. Adding the £2m ( $4m ) in the bank and £7m gives £9m, take that off the market cap of £18.2m leaves £9.2m of market value attributable to Komana.

 

With a JORC estimate of 520,000oz from drilling up to last June at Komana West, SRK stated in their report that due to sparse drilling in some areas that infill drilling would likely increase the estimate by 200,000oz, that infill drilling has produced good results, drilling is currently underway to firm up a previously reported ( By Randgold ) resource of 280,000oz at Komana East. So I am looking at a pretty solid 1 million oz there to start.

With currently known extensions of 7-800 metres North and South of the estimate orezone, extensions to the NE and SW and at depth found in recent drilling together with 2 new early stage strikes to the South along the hosted shear zone, all need proving up but in my estimate will probably add a further 1million oz.

 

The government have a 10% stake and a local partner 5%. So taking the £9.2m attributable to Komana and dividing it by a cautious 1m oz or forward looking 2m oz gives just under a value per oz of £5-10. Even taking into account the government and local partner interest that still comes out at very close to $10 to $20.

 

 

Even though juniors have been unloved for some time I was surprised at the $ per oz value. In realising that there are so many ways of assessing value, would appreciate comment on the credibility of looking at it this way.

 

DYOR

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Glencar - Gold fields farm in - Sankarani project - License areas Farasaba, Sanioumale and Bokoro. Most recent releases.

 

Extract from Gold Fields end of 2007 exploration report. Interesting how it picks out Kabaya South as worth a specific mention and follow up drilling there in the second half of 2007. As there was no drilling from June to October due to the rainy season, must be Nov/Dec RC drilling, we have not seen the latest results there.

 

Sankarani project

 

At the Sankarani Project in Mali, Gold Fields is earning a 65 per cent project interest from Glencar Mining plc. To date, just over US$2.5 million has been expended giving Gold Fields an effective 25 per cent interest in the project. 168 holes totalling approximately 12,500 metres were drilled. The initial drilling was completed early in F2007 and follow-up RC drilling took place on the Kabaya South target during the second half of F2007. Gold Fields has the right to increase its stake in the project to 51 per cent by spending an additional US$1.5 million by the end of the second quarter F2008.

-------------------------

Extract from Davy's (housebroker ) research report, June 07

 

Farasaba – Kabaya South target

 

This is one of the best targets in Glencar’s inventory of ‘non-Komana’ prospects. It was first drilled in October 2006, and a second programme of just less than 2,000 metres commenced in February 2007. Several individual holes recovered commercial grades of gold mineralisation, and a broad zone of anomalous gold has been established over a strike length of 800 metres and to a depth of over 100 metres. The best intersection was 19.2 metres at 3.93 grammes per tonne. The initial interpretation is that the drilling has outlined a steep westerly dipping mineralised zone.

 

Drilling will also take place on the Gold Fields Joint Venture concessions.The Kabaya South target, located on the Farasaba

concession, will be drilled in October. Likewise drilling is also expected on the Sanioumale concession.

----------------

 

from Glencar release May 07

 

At Sanioumale West, a first round drilling programme over a 600 metre strike length returned a number of significant ore grade intersections including:

17 metres at 1.8 grams/tonne in SRC004 from 27m - 44m

10 metres at 1.3 grams/tonne in SRC012 from 28m - 3 38m, and,

1 metre at 17.8 grams/tonnes in the bottom sample of SRC021 from 59m - 60m.

 

Some of the more significant mineralisation was intersected at both the southern and northern ends of the drill grid. In the south, SRC004 intersected 17 metres at 1.8 grams/tonne from 27m - 44m downhole and 2 metres at 1.2 grams/tonne from 47m - 49m. In the north, SRC021 ended in high grade mineralisation with a 1metre sample from 59m - 60m grading 17.8 grams/tonne gold. While we have not completed sufficiently close - spaced drilling to delineate a continuous mineralised zone, the occurrence of such significant intersections is particularly encouraging.

---------------------------

 

Kabaya South at Farasaba appears to be the lead target followed by Sanioumale West at Sanioumale, little of significance at Bokoro so far.

Should be due an update from Glencar/Gold Fields soon on Sankarani.

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Thanks for your post on valuation on the juniors underperformance thread Frizzers.

 

This answers quite a few questions on valuing Glencar’s jewel in the crown, the Komana license area. There is just a JORC resource at Komana of 520,000 oz but it is clear that recent drilling completed will knock this up to well over a million, additional strike length to this is probably about 1.5-2kms at the moment but will increase over the current drill season, particularly with new strikes at Soloba and Kama.

 

Even moving the base figure of the price of gold much lower, my previous posts on valuation at Komana are clearly ridiculously conservative when using this Jim Sinclair method. That is just on the Komana area, not the whole company.

 

The Q&A back of an envelope valuation method from Jim Sinclair’s website.

--------------

 

Hi Jim,

As a young tad, I worked in several Canadian hard rock PM mines from jackleg drilling to drill core interpretation. I know the B from the BS regarding proven reserves and factors governing the viability of a start-up, but these juniors have me stumped. My modest portfolio is exclusively precious metal juniors with more than adequate proven reserves, and a mine in operation or close to it. I’ve been diligent in making sure that none of them are hedged yet still they are greatly underperforming in relation to the price of gold.

Does Jesse’s advice to “sit tight” apply to juniors with good credentials, and if so, what will be some signs of these juniors unhooking from the general market decline in the future? You and Dan are the major reason I have not and will not cut and run in the insanity of the present market.

Sincere gratitude;

CIGA Hardrock GH

 

 

Dear CIGA Hardrock GH,

 

The hedge funds are long the Barricks of the world and short ALL the juniors. The hedge funds have over-priced the big guys and under-priced the juniors.

 

Here is the question that needs to be answered:

With gold headed to $1650 what do you think your junior with 1,000,000 ounces of 43-101 compliant reserves and a deposit strike length of at least 4 kilometers would be worth? Here's a back-of-the-envelope estimate:

 

1,000,000 times $1650 minus a $300 total production cost per ounce.

In ground value: $1,650,000,000 (not including recoveries)

Cost of extraction: $ 300,000,000

Amortization of plant and equipment over say a 10 year mine life: $200,000,000

Value:

Value of the asset $1,150,000,000.

 

Now let's say the deposit goes to 5,000,000 ounces contained. In this case five times $1,150,000,000 is the value - all things being equal.

Does the enterprise plan to produce or will they sell the asset when it matures, say two to four years past initial production?

If they plan to produce for their own account, then the value is a combination of discounted present value times cash flow.

If they plan to sell the property, it is asset value. If the last sale of such an asset was at "x" euros times ounces contained, then the starting negotiation would be a premium above "x" euros times ounces contained plus a value for gold contained within other resource categories.

 

The hedge funds can play all the games they want but they will fail on valuations as gold goes to and through $1650. My personal money is wagered on my words. So those that are demoralized should sell and stop the pain.

 

I am significantly committed and intend to continue my commitment with every cent I have, no margin.

 

Regards,

Jim

---------------------

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Interesting note from Gold Fields, Glencar's earn in partner on 3 of their license areas, from their 2007 exploration and business development update.

-------------

 

During F2007, Gold Fields spent US$47 million on near mine exploration and US$41 million on greenfields exploration – a total exploration spend of US$88 million. The year also marked a significant evolution in the approach to exploration against the background of two considerations:

 

A global shortage of quality gold projects; and

 

Immense liquidity from the equity markets presently funding juniors thereby reducing the scope of conventional earn-in deals.

 

This has necessitated an increase in the generative effort within the exploration group to develop new opportunities in under-explored areas, and a change in the nature of business and deal-making relationships regarding exploration.

 

---------------

 

Into elephant country ?

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From Davy's report June '07 ( House broker )

 

--------------------------------

 

Quite apart from the specific Komana West target location, there is a

body of evidence that the deposit sits on a north south mineralised trend

defined by the Komana shear zone which itself extends over a length of

20 kilometres.

 

---------------------------------

 

Following on from this, in the current drill season new strikes have now been found at Soloba, 3.5kms to the south of Komana West, and Kama, 9kms to the South. This 20 kilometre hosted shear zone is bearing fruit, very probably with more to come.

 

 

Glencar said they had 3 known targets to drill south of Komana West so one known target to come. Airborne survey currently underway may indicate further targets.

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A very good article showing the phases of exploration to production which is worth comparing to Glencar's chart, or other juniors.

 

http://www.safehaven.com/article-8689.htm

 

 

Glencar chart, weekly ohlc, with 14 week RSI.

 

 

http://www.advfn.com/p.php?pid=chartscreen...iFn91mLi%2Bcl5X

 

 

 

Technical Analysis

Formed wave 1 up in late 05 early 06, on discovery, then formed a corrective wave 2 down in the form of an A-B-C to complete wave 2. This is part of Elliott wave which means we should now be ready for wave 3 up. Wave 3 is the longest and strongest. Note the 14 weekly RSI has just come up through 30. Very positive technically.

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Glencar has risen this week to sit fractionally under the 200 week ma. This looks like a GIP. Dr B ?

Also A-B-C down looks to be complete with volume drying up. Chart now turning up.

 

18/52/200 week MAs with RSI and Volume.

 

Chart link

 

http://www.advfn.com/p.php?pid=chartscreen...Y8AX%2FGsMYXQMS

 

 

Note There was a volume spike one day a month due to Glencar's previous funding arrangements which ended in August last year

Possible Elliott waves 1 and 2

 

 

 

.

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Excellent drill results announced this morning, a bonus in fact. The Komana licence area is building a very major resource. This new strike at Komana East adds a very significant deposit, the alignment of which, the previous license holder missed.

 

 

Glencar Mining plc - Drilling Update - Komana East - 26 March 2008

 

Glencar intersects significant, extensive ore zone in Komana East drilling programme

 

* Significant, persistant ore grade mineralisation intersected at Komana East over one kilometre strike length to date along the regional Sankarani Shear Zone

* 19 metres at 4.92 grams/tonne intersected in the southernmost hole drilled to date

* 8 metres at 3.92 grams/tonne intersected in northernmost drillhole

* 20 metres at 4.36 grams/tonne intersected in the central zone indicating continuity of mineralization through this zone

* Mineralisation open in each direction along strike and at depth

* Main Sankarani Shear Zone extends for a further 20 kilometres to the south within Glencar's Komana licence.

* Drilling continued at Komana West deposit and Solona targets; update expected shortly.

 

Glencar Mining plc, ("Glencar" or "the Company"), the AIM and IEX listed company with gold exploration interests in Africa, is pleased to announce assay results from the first phase of drilling at its Komana East target in southern Mali.

 

The Komana East target is approximately 7 kilometres east of Glencar's Komana West deposit and drilling by the previous licencee, Randgold, in the area in the 1990s had already outlined a non - JORC compliant resource of 280,000 ounces of gold. The objective of the current programme is to enable the completion of an ore resource estimate for Komana East in combination with the update of the resource estimate for Komana West following completion of the current drilling campaign in June next.

 

Glencar's first borehole at Komana East was drilled in November 2007 to gain structural information relating to the projected ore zone. This structural information was used in the design of Glencar's first main phase of drilling at Komana East which comprises holes drilled on a northwest-southeast axis compared to the east-west axis used by Randgold in its drilling campaign. This phase, which is continuing, commenced on 19 January 2008 and comprises to date of 16 holes totaling 1,941 metres of reverse circulation drilling and 147 metres of diamond drilling.

 

Twelve of the holes were drilled along the projected shear zone in four fencelines. One additional hole (KERC137) was drilled between fencelines. The remaining three holes were drilled on a separate target some 800 metres to the west to test a separate geochemical anomaly. On each of the four fencelines, one hole intersected the mineralized structure, with consistently good gold grades over significant widths.

 

The northernmost fenceline included the earlier hole KEDD126, reported in January 2008, which intersected 8 metres at 3.92 grams/ tonne between 102 and 110 metres downhole depth.

 

The second fenceline, 250 metres to the south, contained hole KERC138 which showed the following intersections: 2 metres at 2.41 grams/tonne between 55 and 57 metres downhole; 15 metres at 1.86 grams/tonne between 72 and 87 metres downhole and 22 metres at 2.81 grams/tonne between 94 and 116 metres downhole depth. On this fenceline, another hole, KWRC345, was drilled from the west side of the projected structure to an azimuth precisely opposite that of hole KERC138, i.e. 135 degrees, and it confirmed our geologists' initial interpretation of a sub vertical ore zone. This hole intersected the following mineralized intervals; 5 metres at 1.7 grams /tonne between 37 and 42 metres downhole; 4 metres at 4.95 grams/tonne between 49 and 53 metres downhole; 2 metres at 2.66 grams/tonne between 57 and 59 metres downhole; 6 metres at 5.51 grams/tonne between 62 and 68 metres downhole and 20 metres at 4.36 grams/tonne between 75 and 95 metres downhole.

 

The third fenceline, 200 metres further south, contained borehole KWRC140, which intersected the mineralized structure over 12 metres grading 2.45 grams/tonne between 112 and 124 metres downhole depth.

 

The fourth fenceline, 600 metres further south, included borehole KWRC142 which intersected 19 metres at 4.92 grams/tonne between 42 and 61 metres downhole depth.

 

The single borehole KERC137 did not encounter significant mineralization and further drilling at this location is planned to test whether the hole actually penetrated through the main shear zone.

 

The results obtained to date are particularly encouraging. We have intersected consistent ore grade gold mineralization over a one kilometre strike length and the mineralized zone is open along strike in both directions and at depth.

 

We are continuing to drill along the southerly strike continuation of the mineralized zone on fencelines 100m apart. Geological logging of holes drilled in the past week suggests we have intersected the mineralized structure on our next stepout fenceline, a further 100 metres to the south of those boreholes reported above.

 

The mineralization is contained within a brecciated, silicious metasediment. The grades of gold seen in the mineralised zone at Komana East are consistent and average at in excess of 3 grams/tonne. Details of the assays received for the main mineralized intervals are given in the table below and details of the hole locations will be published shortly on the Company's website at http://www.glencarmining.ie

 

This is a very exciting development in Glencar's exploration of the general Yanfolila/Sankarani region. The consistent tenor of the mineralization encountered to date suggests a strongly mineralised system persistent over the strike length so far drilled. The mineralised zone seems to be particularly strong at the southern end of the currently drilled area. The area currently being drilled falls along the main Sankarani Shear Zone, a major, regional shear structure which extends for a further 20 kilometres to the south within Glencar's Komana licence.

 

At Komana West, drilling has continued aimed at adding to the resource statement for that deposit. In addition we continue to receive exploration drilling results from the Company's exploration licence over the neighbouring Solona area. While the current assay reporting times are still significantly longer that those achieved during previous field seasons we anticipate having sufficient data to be in a position to report an update on Komana West and Solona drill programmes within the next four weeks.

 

Hugh McCullough, EurGeol., PGeo, Managing Director of Glencar, is a member of the Institute of Geologists of Ireland. He is a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, March 2006, of the London Stock Exchange. He has reviewed and approved the technical information contained in this announcement.

 

+-------------------------------------------------------------------+

| Fenceline | Hole | From | To | Width | Grade |

| | | m | m | m | g/t |

|--------------+-------------+---------+--------+---------+---------|

| 1 | KEDD126 | 102 | 110 | 8 | 3.92 |

|--------------+-------------+---------+--------+---------+---------|

| 1 | KEDD126 | 116 | 118 | 2 | 2.01 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KERC138 | 55 | 57 | 2 | 2.41 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KERC138 | 72 | 87 | 15 | 1.86 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KERC138 | 94 | 116 | 22 | 2.81 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KEDD344* | 54 | 61 | 7 | 1.15 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KEDD344* | 68 | 76 | 8 | 0.71 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KEDD345* | 37 | 42 | 5 | 1.70 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KEDD345* | 49 | 53 | 4 | 4.95 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KEDD345* | 57 | 59 | 2 | 2.66 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KEDD345* | 62 | 68 | 6 | 5.51 |

|--------------+-------------+---------+--------+---------+---------|

| 2 | KEDD345* | 75 | 95 | 20 | 4.36 |

|--------------+-------------+---------+--------+---------+---------|

| 3 | KERC140 | 112 | 124 | 12 | 2.45 |

|--------------+-------------+---------+--------+---------+---------|

| 4 | KERC142 | 42 | 61 | 19 | 4.92 |

|--------------+-------------+---------+--------+---------+---------|

| 4 | KERC143* | 20 | 22 | 2 | 4.85 |

|--------------+-------------+---------+--------+---------+---------|

| - | KERC137 | 39 | 44 | 5 | 0.75 |

|--------------+-------------+---------+--------+---------+---------|

| - | KERC137 | 57 | 62 | 5 | 0.81 |

|--------------+-------------+---------+--------+---------+---------|

| - | KERC137 | 67 | 68 | 1 | 1.30 |

|--------------+-------------+---------+--------+---------+---------|

| - | KERC145 | 6 | 7 | 1 | 1.26 |

|-------------------------------------------------------------------|

| The following drillholes did not intersect significant grades |

| above 0.5g/t: |

| |

| KERC135, KERC136, KERC139*, KERC141, KERC144*, KERC146*, |

| KERC147* |

| |

| * Holes marked with an asterisk have some assay data outstanding. |

| |

+-------------------------------------------------------------------+

 

 

 

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The drill results this morning were a positive bolt from the blue, a positive surprise thanks to Glencars skill at interpreting the geology. The previous license holder, Randgold, missed the deposit announced today and the strikes at Komana West, and Soloba and Kama. Still, their loss is Glencar's gain.

 

I was comfortable with there being 2m oz at Komana but with the today's results and the results announced 30th Jan I am now comfortable with 3m oz.

 

Those two sets of drill results have added strikes at Soloba, Kama and today at Komana East. They have found increased grades in the resource orezone at Komana West and found substantial extensions at depth within that zone. The further 1km of strike at Komana West not in the resource orezone has been extended with additional orezones being added and is still open to North and South along strike.

 

Current market cap is just under £20m, giving a value of $15 per ounce at 3m oz. That is just Komana, you still have to add in the other 4 license areas, the cash in hand and the value of the rest of Glencar which knocks that value per ounce to under $15.

 

Further results are expected from Komana West and Glencar's 95% owned adjacent Solona license area, three targets being RAB drilled there, within the next 4 weeks. Strikes at Solona would do wonders.

 

The chart is at a GIP with the SP rising strongly above the 200wk ma today, will add the weekly chart at the weekend.

 

 

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The GIP has developed this week with the sp moving up through the 18 & 200wk ma's on the back of the news reported earlier this week.

A new orezone of over a kilometre with good grades which is open along strike and at depth at Komana East. Drilling is continuing here.

 

 

Chart 18/52/200 wk ma's. Wkly RSI 14. Bollingers 20/2.0 with 20 wk ma

 

advfnGEX.jpg

 

 

Glencar have said to expect further news within 4 weeks on drill results from Komana West and their 95% owned adjacent license area Solona with 3 targets being RAB drilled there.

 

 

Apologies if the chart isn't clear. Link below is clearer

 

http://www.advfn.com/p.php?pid=chartscreen...WOnaBqIVQBk6dVi

 

 

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Have found a drill result calculator for ounces and a fair value which may prove useful. You just need a few simple figures to get the ounces and fair value. When putting the width and grade in rather than put in the results for every hole, just using an average width and grade for all the holes only needs one entry. Useful as a rough guide.

 

http://www.49west.com/newcalc.html

 

Glencar have drill results due within the next 10 days or so which could add in a new dimension as they are RAB drilling 3 targets on the Solona license area. One of these is Badogo Malikili which had a sparse drill programme last year, best grades were 8m at 2.62g/t and 2m at 25.2g/t, gold encountered in 8 of 13 holes there.

 

Further RC/Diamond drill results are also due for Komana West and we may get news on extensions at Komana East.

 

 

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