It’s called the Gold Coast for a reason
If I asked you what country in Africa is the number two producer of gold behind South Africa, what would you say? I’ll give you a hint; it used to be called The Gold Coast. It was called that for a reason, there are more 10 million ounce deposits there waiting to be found than any country I have ever visited. I was most impressed.
The country, of course, is Ghana, bounded by the Ivory Coast to the west, Burkina Faso to the north and Togo to the east. It is the second largest gold producer in Africa and the 10th biggest in the world. In my view only Colombia offers as much opportunity to serious juniors.
I visited a serious junior gold company in Ghana, Midlands Minerals (MEX-V) a few weeks back. I really like the prospects of the country and I was suitably impressed with the company.
Midlands' key project in Ghana is called Sian/Praso. The project was put into production by a Chinese company in 2000 and went belly up in 2004 as their costs spun wildly out of control. There is an existing 500-tpd mill on the property along with about 65,000 ounces of gold in a low-grade stockpile.
Don’t give Midlands too much credit for the mill; it’s in pretty ugly shape. It’s one of those mills that looks like it fell out of an ugly tree and hit every branch on the way down. Midlands believes that $10 million in investment and 6 months could sort it out, however.
The immediate goal of Midlands President and CEO Kim Harris is to advance Sian/Praso past 1 million ounces in 43-101. She is fully funded for 20,000 meters of drilling and has completed about 6,000 meters. Expect drill results on a regular basis.
Midlands wants to believe the project has greater than 1 million ounce potential and it’s certainly possible. The Sian/Praso ground is in the Ashanti Gold Belt, home to 125 million ounces of gold already discovered.
Midlands has 192,400 ounces in the indicated resource at 2.33 g/t and an additional 203,350 ounces in the inferred category at 2.35 g/t gold. With $7 million in the bank, at today’s price, the company is only getting $15 per ounce and that’s pretty cheap. At the completion of the 20,000-meter drill program, Midlands expects to still have $6 million in the kitty.
Midlands is fully permitted for production and has a 30-year lease on the project. Kim Harris anticipates making a production decision after defining at least a million ounces.
I like the company and the project. It’s in Home Run County and has been mined in the past. While the mill was used and abused, it could be upgraded to 2000 tpd in six months for $10 million. That is fully financeable so is pretty much non-dilutive. Kim has been aggressive about financing while she could so is well positioned for both an aggressive 20,000 meter drill program with some money left over for doing a feasibility study.
The truth machine is turning as you read this and the results will be what the results will be. I think the company has a real shot at a multi-million ounce find.
Midlands is an advertiser so it’s perfectly natural that we are biased and you should take that into account before making any investment decision. All the people I met and talked to at the project were very helpful so I encourage any potential investor to contact the company for more information. Right now the stock is really cheap and with some nice results, it could shoot a lot higher.