Asante Gold

A whirlwind nine months sets Asante up to be Ghana’s newest gold producer

 


 

Asante Gold is the new kid on the block in Ghana’s highly competitive gold mining industry. Coming from a place of relative obscurity just nine months ago, the Canadian company burst on to the scene with the US$90 million acquisition of the past producing Bibiani Gold Mine from Resolute Mining in August 2021. The Canadian Securities Exchange and Frankfurt-listed outfit wasted no time re-evaluating a future development path for the 2.5 million ounces (Moz) gold resource and quickly set about restoring the facility to its former glory, while benefiting from improving conditions for gold developers across capital markets. Just prior to announcing the Bibiani deal, Asante raised $60 million through a private placement. More recently, the firm raised $80 million in February to fulfil the second of three equally weighted tranche payments to Resolute, and to also fund the start of operations at Bibiani, which commenced in January after an intense three month refurbishment period. Not willing to rest on its laurels, Asante is beginning to commission various elements of the mine and its associated infrastructure, and is on track to deliver first gold from the open pit mine in Q3 this year. 

 

Breathing life into Bibiani 

 

The Bibiani mine, located on the Eastern margin of the Bibiani-Sefwi belt in Western Ghana, is a historically significant mine that has produced over 4 Moz of gold throughout a lifetime stretching back over 100 years. However, the operation has been idled since 2014 under a succession of different owners. 

 

ASX-listed Resolute did complete a feasibility study on the mine in 2018, which found that Bibiani had the potential to generate about 100,000 ounces of gold per year over a 10-year life. The company also published a JORC compliant mineral resource of 21.7 million tonnes (Mt) at 3.6 g/t for 2.5 Moz of contained gold.   

 

This mineral endowment, plus the mine’s close proximity to world class gold deposits such as Newmont’s Ahafo and Kinross Gold’s Chirano (more on this anon), provided the incentive for Asante to pull the trigger on the Bibiani acquisition. Asante also recognised additional exploration upside opportunities, both from near surface and underground targets. 

 

Asante has strong ties to Ghana with other projects in its stable – like the Kubi Gold Mine – being held since 2011, while Ghanaian citizens maintain a significant shareholding, as well as board and executive roles. The company is also currently making final preparations for the co-listing of shares on the Ghana Stock Exchange, to increase its exposure to local investors. 

 

“Our roots are in exploration and project development in Ghana,” Asante’s president and CEO Dave Anthony tells RGN. 

 

“On this occasion we were able to get a head start with Bibiani. We’ve had solid financing and a development team that is very mature and capable. We put them together quickly, but these guys really work well as a team already. I’ve had an awful lot of joy working with them over the last year.” 

 

All hands on deck 

 

Soon after acquiring the asset, the project development team decided that the best way to proceed would be with an open pit design, which would provide significantly better economics than the underground option. In doing this, Asante calculated that the mine’s annual throughput could be increased to 3 Mt at start up and increased to 3.7 Mt at year four, with a nameplate production target of 220-270,000 ounces of gold per annum. 

 

“In terms of valuation this was a significant gamechanger for us. We saw the asset in a much different light than what Resolute saw,” Anthony says. 

 

The company also liaised closely with the local community and central government in order to confirm the viability of certain infrastructural requirements for an open pit development. The main pit and process plant needed a full rehabilitation, along with a reconditioning of the tailings dam, as well as other infrastructure improvements around the site. 

 

Since the refurbishment process kicked off in September 2021, the company has started a 20-25,000 metres near mine exploration programme and awarded the Bibiani mining contract to PW Mining, who mobilised on-site in January. First ore was delivered to the ROM pad in February and at the time of writing, the process plant refurbishment is close to being finalised by local firm Harlequin International. 

 

“From the time we came out of the box in August last year until now, we have met or exceeded every one of our commitments to all of our stakeholders. That’s in the community, to the central government and certainly to our shareholders with all the development around the site. We are completely on track to produce first gold in Q3 this year.” 

 

Exploration targets 

 

The near mine exploration programme at Bibiani has already generated some excellent results from targets including the Walsh, Strauss and Big Mug pits. Latest drilling data indicates that the Walsh Satellite Pit could add North of 100,000 ounces to the overall resource, with a 43-101 report set to be published at the end of April.  This will be upgraded in Q4 2022, to incorporate new information from the drilling programme and a ‘first principles’ study of the Bibiani geological structures. 

 

Meanwhile, a discovery hole at Russel South recently returned 16 metres at 5.75 g/t gold. All of the near mine findings will be collated and folded into an updated 43-101 mineral resource coming out later this year, according to Anthony. “The near mine exploration programme has been fantastic,” he says. 

 

“Our satellite mining programme is going to extend well into 2023. That gives us some breathing room to get performance out of the main pit. The first ore from the main pit remains scheduled to arrive in November, but even so we are going to be able to start up the mine with a little more legroom than what we thought.” 

 

There are also high hopes within the company that Bibiani’s main body of mineralisation extends well below the current depth of the resource model. In fact, historic underground mine workings extend 750 metres down and mineralisation has been shown to be continuous down to 800 metres. The geology suggests that it may continue to considerable depth below the historic workings, which would be unsurprising for a Ghanaian gold mine, which typically reach depths of 2 km.  

 

Gold standard mining jurisdiction 

 

There are currently over 1,200 people working on-site at Bibiani, with the vast majority of those coming from local communities as part of Asante’s commitments to Ghana, a jurisdiction which provides high quality mining professionals, tradespeople and facilities, along with a stable partnership regime with the government. 

 

“The goal posts don’t move here, with regards to rules. There’s always going to be discussion around adjustments, but concepts such as resource nationalism really don’t come into play. The government understands how the mining industry works and how they can be a partner. At every mine in Ghana the government is a 10% owner. It’s a formula that works really well.” 

 

Ghana’s well recognised status as a world leading playground for gold miners means Asante is more than happy to play its part in the local communities and beyond. The company continues to provide bursaries and grants to local students at the middle, high and post-secondary education levels, which is part of an education programme first put together by Resolute.  

 

Asante is also a long-time supporter of the local football team, Bibiani Gold Stars FC. The team has been the talk of the town lately, according to Anthony, having been promoted to the Ghanaian Premier League. “They are the only professional soccer team in the Western part of Ghana, so we tend to inherit fans from outside of Bibiani which is pretty exciting for the community.” 

 

Another long-running CSR initiative of Asante’s is the lemongrass processing facility on-site at the Bibiani mine, where lemon oil and citronella are made and sold into local markets. This remains a popular facility amongst employees and local community members alike. 

 

Glittering prospects 

 

With Asante well on track to pour first gold from the reborn Bibiani mine within the next few months, and with 175,000 ounces of gold set to flow from the main pit in the first 12 months of the operation, this is an exciting time for the newcomer in Ghana’s gold producing space that is also hoping to make a splash with international gold funds. 

 

The company seems to have timed its ascension impeccably given the current global macroeconomic conditions, which have boosted the gold price over the $1,900 an ounce mark this year. While safe haven demand relating to Russia’s invasion of Ukraine may die down in time, lingering inflationary pressure is likely to sustain the price going forward. 

 

Having said that, Asante may well have dodged an inflationary bullet on the ground at the Bibiani mine. The locking in of prices for the refurbishment activities soon after acquiring the asset has proved to be a smart move in hindsight, considering the price escalation of goods and services that has taken place since August 2021 

 

Beyond Bibiani, Asante will focus on delivering organic growth to shareholders via the development of the brownfields Kubi Gold Mine, which adjoins AngloGold Ashanti’s Obuasi mine, along with exploration of its Keyhole, Fahiakoba and Betenase projects near the centre of Ghana’s Golden Triangle. 

 

The company is also seeking external growth avenues, as evidenced by the recent entering into an exclusivity agreement with Kinross Gold for the Chirano mine, located immediately South of the Bibiani mine. Stay close to Asante’s channels for further updates on this exciting potential addition to the portfolio.