Newcore Gold (TSXV:NCAU) has flagged resource growth potential at its Enchi project in Ghana after encountering high-grade mineralization at depth through its ongoing 80,000 meter diamond drilling program.
Earlier this week, the company announced that drilling in the Niamh gold deposit portion of the project had yielded results above current reserve grade and below drilling limits that restrict mineral reserves.
This was highlighted by an intersection of 3.51 grams per tonne gold over 21 meters from 245 meters down, including a higher interval of 5.91 grams per tonne over 9 meters from 251 metres. Another hole intersected 1.61 g/t gold over 14 meters of 278 metres, including 2.94 g/t gold over 7 meters of 284 metres.
Drilling also tested the slope and lateral extensions of previously identified high-grade gold mineralization at Niameh, with one hole returning 1.40 g/t gold over 21 meters of 317 metres, including 2.08 g/t gold over 11 meters of 319 metres.
“These holes successfully intersect gold mineralization below reserve pits and in areas that have historically seen limited drilling,” Greg Smith, Nucor’s vice president of exploration, said in a press release. “As the third largest deposit currently identified at Enshi, Niamh remains open along strike and at depth, with this drilling continuing to support our interpretation that the mineralized system is continuous at depth.”
The company currently has four active drilling rigs on site, working to identify opportunities to add high-grade gold to the early years of the mining plan while also expanding the mineral footprint.
The Enshi project currently hosts potential reserves totaling 51.3 million tonnes grading 0.64 g/t gold containing 1.05 million ounces, included within an indicated resource of 83.6 million tonnes grading 0.56 g/t gold containing 1.5 million ounces.
New PFS
Based on the reserves, Newcore recently released a new pre-feasibility study for the project that includes drilling and technical work completed in 2024 and 2025 but excludes the results of the 2026 program.
The project’s PFS gave an after-tax net present value (NPV) of $496 million and an internal rate of return (IRR) of 37%, for a mine expected to last nine years of operation with an average annual production of 104,000 ounces.
The economics represent a decline compared to its Preliminary Economic Assessment (PEA) published in 2024. According to Newcor, the new technical study used a modified mine plan centered around an open-pit operation using standard milling and carbon-in-leach processing, rather than a lower-capital open-pit pile leaching process.
According to analysts at SCP Research, the PFS report provided a “good starting point” for the mine project, particularly in the upper grade years 1-3 (130,000 ounces per annum at 0.8 g/t) through mining of the Boin deposit, although it “reduced the upside of the project over the life of the mine.”
“The reason is that the mining plan is effectively the same shallow pits as the previous PEA heap pits but with higher grade ounces thrown in to the fore. The opportunity and rationale for CIL is to capture the upside of higher grade ounces at depth, but drilling to bring together the mine plan will occur over the next 10 months,” they said in a research report.
With more drilling, SCP sees the potential to extend the life of the mine at the main grade, with a higher production profile of 130,000-140,000 ounces. annually.
Those at Haywood echoed the importance of exploration in the project’s growth trajectory, noting in a research note that “grade remains critical to the economics of the project.” Its analysts were encouraged by the recent results from the Niameh region. “We view this set of test results favorably, which features many interceptions with scores well above the resource score of Niamh deeper in the system,” they wrote.
Following the exercise results, Haywood maintained a “buy” rating on Newcore with a target price of C$1.50. “We expect the share price performance to be driven by Newcore’s ability to demonstrate the potential for a larger-scale operation than contemplated in the PFS,” they said.
By midday Thursday, Newcore Gold was trading at C$0.34 apiece — about a third of its 52-week high of $0.92 — for a market value of $103.2 million.
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