Glencar’s gold mining endorsed

MINING group Glencar’s gold exploration activities in Mali, west Africa, have been endorsed in a separate brokers report.

Chief executive Hugh McCullough, previously responsible for establishing two commercial mines in West Africa, may be about to add a third, said the report.

In an interview with the Irish Examiner, Mr McCullough said he firmly believes this drilling programme will lead to a commercial mine.

He told shareholders at the group’s annual general meeting on Thursday, he was confident of a positive outcome from the drilling programme.

The extent of the discovery will not be fully established until the end of next year.

However, Mr McCullough said the group has established sufficiently encouraging high grade deposits at its Komana West site in Mali that suggest a commercial project will be established in time.

Glencar has had encouraging gold finds across lengths of 80 metres of rock containing very good ore grades, he said.

Gold finds across intersections of rock between 30 to 40 metres of rock are enough to indicate commercial potential, he said.

The group expects to establish the extent of the current zone by September.

It will then go on to delineate the full extent of the gold deposit over the next 18 months.

“No matter what figure we start out with here, we will make it into a commercially viable deposit,” Mr McCullough said yesterday.

He was speaking following publication of the report by analyst Job Langbroek of Davy Stockbrokers, who holds shares in the firm.

The broker who visited the site recently has lifted his share price recommendation for the group from 15c to 21c per share.

A valuation of Glencar is currently constrained by an incomplete understanding of the Komana West deposit, Mr Langbroek said.

Nonetheless, after taking into account Glencar’s other activities, we believe the market is reflecting a 0.8m-ounce discovery at Komana West, he said.

“We set a short-term price target of 21c and fully expect further upgrades as the story unfolds,” Mr Langbroek said.

Glencar’s primary operations are now in Mali and Ghana, West Africa. However, its activities in Mali are now the most important according to the broker.

Shares in the group fell 3cents to 15.5cents in early afternoon trading yesterday.