The company said that it has received a two-year extension to the exploration permit for the Tanlouka gold project in Burkina Faso, from an original expiry date of January 27, 2014 to January 27, 2016, by which time it said a mining lease can be established to allow for development to take place.
Shares rallied on the news, up 7.14 per cent as at about 1:30 p.m. EDT, trading at 7.5 cents.
"This extension to the Tanlouka exploration permit gives the company further opportunity to expand on its maiden resource at Mankarga 5 and to capitalize on the significant exploration potential elsewhere on the project before proceeding to development," said president and CEO Colin McAleenan.
"We appreciate the Government of Burkina Faso's timely action on this issue, which further demonstrates its commitment to the development of the mining industry as a major economic driver for the country."
The Tanlouka project is situated about 80 kilometres east of the capital city of Ouagadougou, in an area that hosts many of the largest gold deposits in Burkina Faso.
Just two years after drilling the first hole in the Mankarga 5 deposit within the Tanlouka project, Channel in July released a maiden resource estimate which identified indicated mineral resources of 14.1 million tonnes at 0.94 grams per tonne (g/t) gold for 425,000 gold ounces, and inferred mineral resources of 29.1 million tonnes at 0.78 g/t gold for 729,000 gold ounces.
The Mankarga 5 deposit remains open both along strike and to-depth, with “excellent potential” to significantly increase the quantity of gold ounces recognized, Channel noted.
Further work is planned to prepare the Mankarga 5 deposit for economic assessment, including additional drilling and further metallurgical studies to determine the extent of mineralization at Mankarga 1 and Mankarga 1-South targets, and work is also underway to add new discoveries in other target areas.
Chief among these include the Manesse and Tanwaka targets, roughly five and 10 kilometres north of the Mankarga zone, originally identified in historic regional geochemical surveys.
Channel said that results from Manesse are pending, while results from the Tanwaka survey in November, showed gold-in-soil anomalies that encompass about twice the area of those associated with the Mankarga 5 deposit.
Grab samples from the area yielded assays of up to 35.1 g/t gold. The company said it has followed up on these results from Tanwaka with some limited trenching, for which results are pending, and the planning of drill programs to test the extent of mineralization.
"The Tanlouka Project has exhibited a great deal of potential for further growth, both in the expansion of known resources at Mankarga 5 and also in the prospects for further discovery at Tanwaka and Manesse,” said McAleenan.
"Work programs to advance exploration and pre-development programs over the next year and beyond have been planned, and Channel is well positioned to unlock the value of the Tanlouka Project despite the very difficult market conditions that have prevailed over the last year."