It’s a mixture of assets and expertise that turned heads easily enough in London in the summer and autumn of this year, as Jon Forster and long-time colleague Craig Banfield set about marketing Cora Gold Limited (LON:CORA) to institutions and other high net worth individuals.
The company eventually got away on the Aim market on 9 October, sporting a very decent share register and a market capitalisation of around £9 mln.
It also had an exploration budget of £3.45 mln with which to get down to serious work on its suite of gold assets in Mali.
This is a company that’s had a reasonably long gestation period, having been built up into a marketable proposition over a number of years, culminating in the combination of non core Hummingbird Resources (LON:HUM) exploration assets and those already in Cora Gold, so there’s been plenty of time to put together a plan of campaign.
Forster is by inclination an explorer and he’s keen to get to work on the ground, although in the run-up to and during the listing time the company has benefitted from the corporate experience he and Banfield also bring – it goes back to the early 1990s and the days of SAMAX, a company which essentially opened up Tanzania to modern junior exploration.
Success was also had with gold discoveries in in AXMIN and subsequently the discovery of the Mako project in Senegal, currently in the final stages of a production programme being conducted privately by Toro Gold.
But in latter years Forster has been focussing on Mali and most recently on the primary targets inside Cora which were brought into the company in a deal struck with Hummingbird before the listing.
“Craig and I started Cora Gold and established an exploration portfolio,” says Forster. “But then we met with Hummingbird and did a deal on a package of assets that were non-core for them.”
It was a case of use-it-or-lose it for Hummingbird, and because Hummingbird had been all hands on deck with the construction of its Yanfolila gold mine, it was running out of time. No exploration had been conducted on the Sanankoro discovery since 2013, when gold was still slated by some to go to US$2,000.
Instead, it fell, and Gold Fields (NYSE:GFI), the then owner of Sanankoro, walked away from Mali altogether. Into the breach stepped Hummingbird. But Hummingbird operates on an altogether smaller scale than Gold Fields and really needed a team like Banfield and Forster to get the earlier stage exploration assets moving.
But although it’s early stage, Forster knows what he’s looking at, and he knows where he’s going with Sanankoro. Although Hummingbird retains a 33%-plus stake in Cora, in no sense is this any sort of a satellite company to the Hummingbird asset.
“ Systematic reconnaissance drilling by Gold Fields covered the entire 14 km length of the Sanankoro structure” says Forster, the results of which demonstrate the potential for gold mineralisation along its length.
“Two initial zones were followed up by Gold Fields, over a zone with about 1.6 kilometres of strike. And this covers less than 10% of the total gold domain.”
What’s more, says Forster, the mineralisation that was revealed by Gold Fields shows clear potential for economic widths and grades.
His aim is clear. “Our first principal objective is to create a new standalone mine.”
Public announcements issued at the time of listing speak of the potential for Sanankoro to contain more than a million ounces of gold. With the £3.45 mln exploration budget now banked, the aim is now to go out and demonstrate a good portion of that scale.
Still, investors will have to bear with him if they are in a hurry for confirmation of that one million ounce number. Because, rather than chasing an immediately marketable resource, it’s actual evidence of scale that he’s going after first, with official confirmation from consultants likely to follow on further down the line.
On the flip side, there’s also the prospect of early cash flow from another suite of assets that are well within trucking distance Hummingbird’s Yanfolila mine.
And there’s also a third suite of assets on the geological structure to the west known as the Keneiba Window. This too is within trucking distance of another mine, Anglo’s Sadiola project.
And Sadiola is now transitioning through its oxide oreto sulphides and might be grateful for a little bit more easier-to-process ore from a near-neighbour.
All of which sets Cora Gold up well in terms of upcoming newsflow. There’s unlikely to be any cash call for eighteen months or so, so it will be all about building value on the ground in Mali, demonstrating that scale and delivering some good exploration results.
If anyone can do it, Forster can.