As a company that focuses on exploration and production of precious metals, Amani Gold Limited (OTC:BRYYF)(ASX: ANL) is believed to have significant potential after its recent resource estimates exceeded 4 million ounces. Throughout 2021, BRYYF went through several changes in management and operations in order to prepare for its diamond drilling campaign in the Democratic Republic of Congo. With its most recent appointment to its Board of Directors, many investors believe a potential buyout could be ahead for BRYYF stock.
BRYYF Stock News
The global gold mining market is projected to grow from its current $214.1 billion market size to reach $249.6 billion by the end of 2026. Gold remains a highly sought after resource and the market for the mineral has only increased as gold hits $1,816 per ounce. Considering gold’s 200-day moving average at $1,796.25 and then again at $1,800, now could be the time to invest in gold mining stocks. Taking advantage of this bullish market, BRYYF’s primary goal is to grow through three tiers: mining, discovery, and acquisitions.
Giro Gold Project
The Giro gold project is the company’s flagship project and includes exploration in two sites covering an area of almost 500 square kilometers in the northeast Democratic Republic of Congo. Since Q3 of 2017, the company has finished working on seven diamond core holes in the Giro gold project and it continues to dedicate all its efforts to two key prospects within the Giro project – the Kebigada Deposit and the Douze Match Deposit.
Kebigada Deposit
The Kebigada Deposit includes 4.1 million ounces of gold according to its parameters of indicated and inferred mineral resources. Originally, the site was estimated to have 2.14 million ounces in 2019, but this number was upgraded in 2020 after additional drilling. Commenting on this success, BRYYF’s technical director – Grant Thomas – said “We believe we have a major gold deposit here at Giro, and the company now has a very solid resource base to move to our aim of significant gold production from a new African gold mine.”
Douze Match Deposit
Meanwhile, the Douze Match Deposit has an estimated 320,000 ounces of inferred and indicated gold. Investors are eagerly awaiting the company’s feasibility study to determine how much of its mineral resources are commercially extractable as this will provide a benchmark for financial institutions to evaluate the site’s potential for possible funding.
However, according to BRYYF’s operations update, the feasibility study will be deferred to allow for additional exploration at the site. Amani Gold Chairman Klaus Eckhof commented on this decision saying, “We believe that the Giro Project has the potential to become a world class gold deposit and that the payment of the final Goodwill instalment and the deferment of the feasibility study provides Amani with the opportunity to undertake a comprehensive drilling campaign to pursue this.”
As with any mining operation, several aspects will determine the final financial viability of BRYYF’s resources. One thing investors are considering is the quality of the Kebigada Deposit and the Douze Match Deposit’s gold. Due to the high cost of extraction, if the gold is not of a high enough quality it may not be worthwhile to extract, unless it is an open pit mine. But since the Kebigada appears to have varying qualities of ore at different depths this could be the most promising site for the company.
Drilling Campaign
To capitalize on the site’s potential, BRYYF is currently undergoing a 3,500m diamond drilling campaign at the Kebigada gold deposit. With 8 diamond drill holes planned for a total of 3,500 meters across the Kebigada Central Ore Body and Kebigada and Eastern Ore Body, the company has scheduled this program for finalization by early 2022. Through this, the company intends to define existing gold resource as well as test depth extensions of broad mineralized zones within the EOB and along strike of the COB – paving way for further expansion.
On top of that, BRYYF is initiating a RC drilling campaign at Giro Gold Project as soon as Q1 2022. In this campaign, the company is planning a program of 56 RC drill holes for a total of 5,860 meters at high grade satellite prospects – Kebigada South-East and Congo Ya Sika. The main objective behind this program is to define high grade satellite prospects within the Giro Project region to potentially increase the grade and size of the current Giro Project gold resource.
Private Placement
However, the company undertook a private placement from investors in September to facilitate these goals. Proceeds from the placement totaled $7 million and will go towards developing and commercializing Amani’s Kebigada deposit. With this funding, BRYYF is well-positioned to acquire more working capital, develop and commercialize its campaigns as well as repay its $2.1 million convertible notes held by Neo Gold Limited which matures in Q1 of 2022.
Adjacent Mining Sites
As is, there are many reasons investors are bullish on BRYYF. For one thing, the Kilo-Moto Belt of the DRC – which is home to the company’s mining sites – also hosts Barrick’ 17 million-ounce Kibali group of deposits. Barrick is one of the largest mining companies in the world and its site produced 350 to 380 thousand ounces in 2021 while operating just 35 km from Giro. Few mining stocks can boast such close proximity to a high producing mine like Kibali.
Moto Goldmines
Clearly, this is a bullish sign for BRYYF’s nearby mining sites. But investors have also compared Amani Gold to Moto Goldmines which was formerly owned by BRYYF’s now Executive Director – Klaus Eckhof. After completing its feasibility study in 2009 on the Kibali mining project, Moto was acquired by Randgold Resources and AngloGold for $578 million before Randgold was acquired by Barrick in a $6 billion deal.
At the time of the Moto Goldmine Acquisition, the site had 5.5 million ounces in probable gold resources and an additional 5.7 million ounces of inferred gold. This is comparable to BRYYF’s site which contains 4.4 million ounces of indicated and referred gold. However, in 2019 the price of gold was roughly $1,050 per ounce while the price per ounce has risen to near $1,800 per ounce in 2021. The major difference between both sites is the feasibility report which is necessary to upgrade Amani’s gold reserves to proven or probable.
Klaus Eckhof
For this reason, BRYYF’s Executive Director Klaus Eckhof is an important component of BRYYF’s management team and the fact that he chose BRYYF over other mining stocks hints at the company’s potential. Not only does he have over 25 years of experience as a geologist identifying, exploring and developing mineral deposits around the world, but his role in the Moto Goldmine Acquisition has some bullish investors hoping for a repeat.
As Eckhof and BRYYF’s new CEO – Conrad Karageorge – make a fresh start following the company’s former management, investors feel confident that BRYYF is in good hands. According to the company’s recent filing, Eckhof converted his almost 1 billion performance rights into common shares – which he still holds. Buoyed by this bullish sign, investors are looking forward to possible buyout opportunities for BRYYF once the company completes its feasibility study.
*Updated April 29th
Assay Results
Delivering on its plans for diamond drilling in 2022, BRYYF released promising assay results for the first of 8 diamond drill holes at the Kebigada gold deposit. Aiming to drill for high grade gold within the location, BRYYF reported significant assay results such as 14.35 grams per ton at a depth of 13.6 meters as well as 5.71 grams per ton at a depth of 139.7 meters. These assay results signify the presence of high grade gold and “has confirmed broad gold mineralization zones within the Kebigada ore body”.
During this process, BRYYF found a mineralized zone outside the deposit’s limits which will require further drilling to test the grade of these minerals. With the assay results returned for the first 475 meters, the results for the final 76 meters will be sent to the lab along with samples of the second diamond drill hole. Eckhof is bullish on the assay results and is “looking forward to the assay results for the final 76.16m”. These results could give an indication of the gold grades of the other 7 holes BRYYF plans to diamond drill.
In March, BRYYF followed up on these results with an announcement that the Kebigada’s mineral resource estimates currently exceed 4 million ounces adding that “These gold assay results indicate the potential for the Kebigada deposit to substantially grow via targeted deeper and along strike drilling.”
The company also shared a substantial upgrade of the deposit’s Mineral Resource – boosting it to 124 million tons at 1.03 grams of gold per ton for 4.1 million ounces of gold within the
Giro Gold Project. The new Mineral Resources Estimate represents a 28% or 0.8Moz increase in the site’s contained gold compared to previous estimates.
BRYYF’s Technical Director – Grant Thomas – commented that this “is a milestone for Amani and confirms our strategy of targeted deeper drilling.” He went on to say that “We believe we
have a major gold deposit here at Giro, and Amani now has a very solid resource base to move to our aim of significant gold production from a new African gold mine”.
This was further substantiated by BRYYF’s Quarterly Activities Report which documented the results of the first two diamond holes – GRDD036 and GRDD037 – and also updated investors on the completed third hole – GRDD038 – which has its assay results pending. According to its results so far, at 302.05 meters GRDD036 showed 1.18grams of gold per ton and at 201 meters GRDD037 showed .97 grams of gold per ton. Its fourth hole -GRDD039 – is still being completed.
Reverse circulation drilling is also planned to commence at BRYYF’s high grade gold prospects in Kebigada South-East and Congo Ya Sika. The goal of this drilling campaign is to identify potential high grade satellite deposits at both sites which are currently not part of the Giro project resource.
Personnel
In other news, after Cong Maohua resigned as director, BRYYF added Burt Li to its BOD as a non-executive director. As a senior partner and the head of the Mining and Resources practice at Dentons, Li has significant experience in mining by regularly counseling Chinese and foreign mining companies. In this way, Li assists these companies in merger and acquisition transactions, legal issues regarding the exploration and exploitation of resources, as well as foreign investment opportunities.
It is worth mentioning that Li helped a number of Chinese mining companies in acquiring other companies with operations in Africa. In light of this and the debt repayment, many investors are speculating that Li’s appointment is to arrange an LOI to facilitate a buyout with a Chinese mining company. With this in mind, a buyout could send BRYYF on a run-up as many investors believe that BRYYF is one of the best mining stocks this quarter.
BRYYF Stock Financials
Meanwhile, BRYYF released its half year report. According to its semi-annual financial report the company has AU$9 million in current assets and AU$34.7 million in total assets. According to the company’s quarterly update, a total of $146,000 was paid to related parties and their associates during Q1, including expenses relating to director’s remuneration and salaries.
Its total current liabilities amount to AU$3.3 million, of which AU$2.1 million is interest bearing convertible notes. This is roughly the same as the year before, however BRYYF recently fully repaid its convertible notes totaling AU$2.1 million to Neo Gold Limited. Since these notes were included in the company’s liabilities, BRYYF should have roughly $1.27 million in liabilities left.
Without this extra burden, BRYYF is no doubt in a better financial position to pursue its operations. However it does run the risk of not being able to sustain its operations if it is not able to capitalize on its resources. Considering that the company used up AU$5.6 million and registered a loss of AU$2.7 million during 2021, the AU$4.6 million in cash it has at the bank as of April may not last long.
Media Sentiment
@PamaInvests is bullish on BRYYF’s gold as a hedge against inflation
@SUNNYLAND24 believes BRYYF stock has hit bottom which may be a good opportunity for those bullish on BRYYF stock.
Technical Analysis
BRYYF stock is currently trading at $.0012 with a support at .0011 and a secondary, stronger support at .0009. The stock shows a resistance at .0014. The RSI is resting at 48 and the MACD is bullish. Meanwhile, accumulation saw a huge jump at the end of March and has remained relatively steady since.
Following the company’s shareholder conference, many investors are bullish that a buyout offer could be impending given BRYYF’s close proximity to Barrick’s site just 35km away. This could explain the strong accumulation which could continue building up to the July 2022 resource review. With a market cap of only $26 million, a possible buyout offer could be a huge boon for shareholders. But as is, BRYYF stock could see a rebound off of its support with announcements regarding the assay results of its third and fourth drill holes.
BRYYF Stock Forecast 2022
While continuing its diamond drilling campaign at the Kebigada, the company intends to begin reverse circulation drilling at Kebigada south east in May and into June. It will follow that with drilling at the Congo ya Sika in June before its resource review in July.
It’s worth noting that Australian analysts have been very bullish on Klaus Eckhof’s leadership of Moto Goldmines took the company from 4 cents per share to $4 per share — a 9,900% return. He was also credited with the lithium-focused company’s – AVZ Minerals (ASX:AVZ) – 2,500% run from 1.4 cents to 37 cents over one year. Clearly, his name holds considerable weight in the mining business and some believe that his work with BRYYF could yield similar results. With this in mind, many are hoping that July’s resource review or feasibility study will be the catalyst for a potential buyout offer – making BRYYF stock one to watch.
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