Positive Due Diligence completed on Akoko Project
Hamak Strategy Limited (LSE: HAMA) has announced the completion of positive due diligence on the Akoko Gold Project in Ghana, a development that positions the company to proceed with the acquisition of the project, which is estimated to host a resource of 252,659 ounces of gold at a grade of 0.58 grams per tonne (g/t). The acquisition cost is approximately US$10 per ounce, which will be financed through a combination of cash and shares. The project is situated in the Ashanti gold mining belt, a region known for its rich mineral deposits, and is expected to undergo a 4,250-meter reverse circulation drilling campaign aimed at establishing a JORC-compliant resource. Following this, metallurgical testing and an independent Preliminary Economic Assessment (PEA) will be conducted to evaluate the project's economic viability.
The Akoko Project's resource estimate is based on historical drilling data, which indicates a non-JORC inferred resource of 277,000 ounces at a higher grade of 1.7 g/t. The current inferred and indicated resource of 252,659 ounces, while lower in grade, is primarily oxide-hosted and near-surface, suggesting the potential for a low-capex heap leach operation. The strategic decision to advance this project aligns with Hamak's broader objective of capitalising on high gold prices and enhancing its portfolio in a stable mining jurisdiction. This acquisition follows a binding terms sheet announced on 3 December 2025, demonstrating a clear commitment to expanding the company's operational footprint in Ghana.
Hamak's current market capitalisation stands at approximately £5 million, with a cash balance that has not been disclosed in the announcement. The funding for the acquisition will involve both cash and share issuance, which raises potential dilution concerns for existing shareholders. Given the acquisition cost of US$10 per ounce, the total cost for the 252,659 ounces amounts to approximately US$2.53 million. This figure suggests that the company may need to secure additional funding to cover the costs associated with the upcoming drilling campaign and the subsequent PEA, particularly if cash reserves are limited. The announcement does not provide specific details on the current cash position or the burn rate, making it challenging to assess the funding runway adequately.
In terms of valuation, Hamak's acquisition cost of US$10 per ounce is competitive compared to its peers. For instance, fellow AIM-listed gold explorer, Alecto Minerals (AIM: ALO), has a market capitalisation of approximately £3 million and an estimated resource valuation of US$15 per ounce, while another peer, Katoro Gold (AIM: KAT), is valued at around US$12 per ounce. This positions Hamak favorably within the context of its peers, suggesting that the acquisition could be value-accretive if the subsequent drilling and PEA yield positive results. However, the lack of a clear cash position and potential dilution from share issuance could temper investor sentiment.
Hamak's execution track record appears to be in line with its stated strategy, as the company has successfully completed due diligence and is now moving towards the drilling phase. However, the historical performance of similar projects in the region, particularly regarding resource estimation and economic viability, presents inherent risks. The reliance on non-JORC compliant resources raises questions about the accuracy of the resource estimates and the potential for future revisions. Furthermore, the company's dual focus on gold exploration and digital asset treasury management introduces additional complexity and risk, particularly in a volatile market environment.
A specific risk highlighted by this announcement is the potential funding gap that may arise if the company does not secure sufficient capital to cover the costs associated with the drilling campaign and PEA. The timing of these activities is crucial, as Hamak aims to complete the drilling and testing before the end of 2026, which will inform its decision on whether to exercise the option to acquire the Akoko project. The successful execution of these plans is critical to mitigating dilution risk and ensuring that the company can advance the project without compromising shareholder value.
In conclusion, while the completion of due diligence on the Akoko Gold Project represents a positive step for Hamak Strategy Limited, the announcement primarily serves as a routine operational update rather than a transformational milestone. The acquisition cost is competitive, and the project has potential, but the lack of clarity regarding cash reserves and the potential for dilution raises concerns about funding sufficiency. As such, this announcement can be classified as routine, with the next measurable catalyst being the commencement of the drilling campaign, expected to begin within the next few months.