Keegan Resources Shares Rally on Chatter Regarding Esaase Gold Project in Southwest Ghana

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Shares of Keegan Resources
KGN
surged as high as $4.18 Wednesday on positive chatter regarding the company's Esaase Gold project in Southwest Ghana. The project could yield as much as 5 million ounces of gold. A company spokesperson said the cost to build the mine is approximately $260 million; they currently have $188 million in cash and would need to finance the remainder. Keegan has been in discussions with a few junior and mid-tier companies for a possible buyout, partnership or joint venture, according to the spokesperson. Zachary Prensky, of Little Bear Research, follows global natural resource companies and is cautious on Keegan as an investment . "Without a sale process in place, shareholders of small cap, early stage overseas gold companies can expect significant dilution over many years before an ounce of gold is sold. 9 out of 10 times, history has shown such lengthy dilutive processes lose shareholder money. In my opinion, the owners of Keegan Resources would be better off seeking out a deep-pocketed resource company to pay them some discount of the present value of its' Ghanaian projects and take whatever premium offer is made". Keegan had seen unusually heavy call buying in May and June, when the share price was around $3.00. Keegan expects to provide an update soon on the Esaase project, but no major news.
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