Download the BFG Equities research report.
May, 2010
Dear Shareholders and Investors
With debate raging about the Federal Government�s plan to apply a 40 per cent tax on the profits of Australian resources projects, I thought it may be an opportune time to share with you a leading stockbroker�s research note concerning West Africa.
The analysis by respected institutional broking firm BGF Equities draws a glowing conclusion about the growth prospects for a range of Australian-based gold companies operating in West Africa.
Analyst Warwick Grigor, who hosted a recent trip for investors to several West African gold projects, including Azumah�s Wa Gold Project in Ghana, said in his note that West African gold stocks offered greater exploration upside than Australian brownfield projects, without the technical problems associated with going back to old projects.
�A virginal open pit operation carries much less risk than deepening old pits and proceeding underground,� Grigor wrote. �Recent events have shown that geopolitical risk is escalating in Australia with a government unsympathetic to mining. West Africa is one of the hottest places to be in the gold sector and will remain so.�
Grigor went on to provide an extremely favourable assessment of the outlook for Azumah. �AZM is playing a catch-up game in the market with the shares still looking cheap,� Grigor wrote. At the time of his writing, Azumah shares were 34 cents.
�Maybe this is because the management is not as promotional as others and it is leaning towards an earlier, more modest startup operation of less than 100,000 oz pa. It continues to offer sound value with active exploration.�
Please click here to download Grigor�s note. I hope it is of interest.
I am also pleased to report that work in preparation for a maiden resource at the Collette deposit at the Wa Project is proceeding well. You may recall that recent results at Collette included 20m at 7.43gpt from 76m.
Meanwhile drilling is well underway to extend the interim 350,100-ounce resource at the Julie prospect and drilling is also taking place in the flagship Kunche-Bepkong district, where resources stand at 750,000 ounces.
The feasibility study for Wa is scheduled to be completed this year, with Azumah looking to establish a project which produces 100,000 ounces-plus a year with a long life.
Results of the various drilling programs underway will be released to the market as they come to hand.
Yours Faithfully
Stephen Stone
Managing Director
About Azumah Resources
Azumah Resources Limited is an emerging West African gold company focused on developing the first commercial-scale gold operation at its 100%-owned Wa Gold Project, located in the emerging north west Ghana gold province.
The Wa Gold Project tenure extends for over 3,100km2 encompassing 150 strike kilometres of prospective Birimian aged greenstone geology � the host sequence to several world-class gold deposits in Ghana and West Africa.
Azumah has already defined a JORC Code reported Indicated and Inferred Mineral Resource of over 1.1 million ounces gold for the Wa Gold Project based primarily on mineralisation it has discovered and delineated at the Kunche-Bepkong and Julie deposits.
The Company is confident of expanding the defined resources on several fronts including through the step-out drilling of existing resources, the drill testing of high-priority targets in the immediate vicinity of the Kunche and Bepkong resources, the exploration of the northern and southern strike extensions of the Kunche - Bepkong structural corridor and infill and extensional drilling at advanced prospects within the recently acquired Julie and Collette prospecting licences.
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Bernard Aylward. Mr Aylward is the General Manager of Azumah Resources Limited. Mr Aylward is a Member of The Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the �Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves�. Mr Aylward consents to the inclusion in the report of the matters based on information in the form and context in which it appears.
The information in this report that relates to in-situ Mineral Resource estimates for Bepkong, Yagha and Atikpi is based on information compiled by Mr David Williams, an employee of CSA Global Pty Ltd, geological consultants. Mr Williams is the competent person for the Bepkong, Yagha and Atikpi estimates and takes overall responsibility for these. Mr Williams is a Member of The Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the �Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves�. Mr Williams consents to the inclusion in the report of the matters based on information in the form and context in which it appears.
The information in this report that relates to in-situ Mineral Resource estimate for Julie is based on information compiled by Mr Stephen Hodgson, an employee of CSA Global Pty Ltd, geological consultants. Mr Hodgson is the competent person for the Julie estimate and takes overall responsibility for this. Mr Hodgson is a Member of The Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the �Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves�. Mr Hodgson consents to the inclusion in the report of the matters based on information in the form and context in which it appears.
The information in this presentation that relates to Mineral Resources at the Kunche Project is based on a resource estimate that has been audited by Mr Paul Payne, who is a full time employee of Runge Limited. Mr Payne is a Member of The Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the �Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves�. Mr Payne consents to the inclusion in the presentation of the matters based on information in the form and context in which it appears.
Forward Looking Statement
Statements regarding plans with respect to the Company�s mineral properties are forward-looking statements. There can be no assurance that the Company�s plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that the Company will be able to confirm the presence of additional mineral deposits, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of the Company�s mineral properties.
All notes pertaining to the Kunche Mineral Resource estimation of September 2006, the Bepkong Mineral Resource estimation of September 2008, the Atikpi and Yagha Mineral Resource estimation of September 2008 and the Julie Mineral Resource estimation of March 2010 can be viewed at www.azumahresources.com.au