A possibly cheaper way to play Ghana gold

NEW YORK -- The world seems to be littered with gold projects abandoned by BHP Billiton [BHP] but made good by other companies. Australia?s Adamus Resources [ASX : ADU] is one of those making silk purses out of BHP sow?s ears. Whilst BHP?s fits and starts can be understood in terms of the psychosis of large corporations, it boggles the mind that its geologists personally walked away from so many of the evidently wealthy deposits they discovered like the Salman gold project in Ghana.

Salman is Adamus?s flagship project and its only one outside Australia marking a timely switch into gold. It acquired 90% of the project in mid 2002 from compatriot Resolute for $4 million, taking in data from 71 reverse circulation and 4 diamond drill holes that produced 7.5 kilometres of core. That confirmed mineralization over a strike length of 4km although no subsequent attempt was made to prove up a resource.

Located on Ghana?s Ashanti Gold Belt, Salman is 84 square kilometres in extent and 40km south of Golden Star?s [GSS] Bogosua and Prestea mines.

Adamus?s own 5,000m plus drill programme soon got under way with the first batch of results released in January this year. Those confirmed ?substantial? mineralization that is open at depth and along strike with trench sampling returning 100 meters at 6.1 grams per tonne, an excellent surface result in Ghana.

Drilling results from March showed strong mineralization close to surface which would be a boon if a high grade pod can be isolated and prepared for early open cut mining. The best results were 20m at 10.8g/t; 48m at 2.4g/t and 28m at 3.6g/t.

Further good news is that there is good continuity of mineralization which is shallow dipping in the primary zones Adamus is focusing on.

An initial resource estimate is expected very soon and will give a reasonably firm idea of whether Salman is going to be a cracker or an also-ran. Given the drill results to date, it is looking like a player ahead of its third quarter drill programme.

The stock stumbled in March to below 20 Aussie cents, but recovered smartly on bargain hunting which took it to a 52-week high. It cooled, but has been fighting back toward that 34 cent resistance level ahead of the expected release of fresh results.

Cash reserves were A$2.3 million at end December which should easily sustain Adamus through its next drilling programme although another near-term fund raising is likely.

It?s certainly an attractive proposition for American and Canadian investors who are presently playing Toronto listed West African exploration stocks, but paying higher multiples for them.