German mining investment company Pearl Gold has acquired a 25% stake in Malian mining company Wassoul’Or, which operates a gold mine in Kodieran, 300 km south-east of Bamanko. The mine holds an estimated deposit of 1.75-million ounces of recoverable gold.
Production at the Kodieran Hill openpit operation, which forms part of the Wassoul’Or gold mine, was scheduled to start at the end of 2011.
By the end of last year, the fleet of mining equipment required for production was on site and a 1 000 t/d pilot plant had been operating successfully for a 12-month period.
The full-scale plant has the capacity to process about 11 000 t/d of raw material.
Pearl Gold chairperson Robert F Goninon says that the sales process for several buyers of the semirefined gold is already fixed.
Further, he points out that the Kodieran Hill operation will produce gold over the next six years, while there is realistic potential for mine life extension. It is only one of five mineralised sites within Wassoul’Or’s 100 km2 concession.
Meanwhile, Pearl Gold CEO Jean Louis Dupuy, is confident about the growth potential of Mali’s mining industry.
He notes that, over the past few years, Mali has become a major gold producer with several new mines currently at final feasibility or commissioning stage. Since 2003, the country has been the third-largest African gold producer, after South Africa and Ghana.
“Besides gold, the country has a rich variety of mineral commodities. There are iron-ore, manganese, bauxite, uranium, phosphate and marble deposits,” he says.
In addition, oil reserves have been discovered in the north of the country.
Despite its growth potential, many challenges still face the Malian mining industry, with a lack of infrastructure, power and water resources making it difficult to operate in the country.
“One of the biggest challenges is the development of infrastructure to encourage foreign trade and support the exploitation of the diverse commodities,” Dupuy and Goninon say.
“To enable efficient mining processes, transportation between the mining site and buyers, or further processing sites, has to be guaranteed. “[This is so] especially for the exploitation of those commodities that are of low unit value and are, therefore, disproportionately affected by transportation costs, which are crucial. With the infrastructure established by Wassoul’Or, which includes an airstrip, safe transport from the mine to the buyer by airplane is guaranteed.”
Further, Goninon says it is difficult to predict what the future holds for the mining industry, given that gold-mining reserves are becoming scarcer and that mining companies have to dig deeper to access the resources. This is leading to higher costs. However, countries like Mali still have many unexploited deposits with favourable topographic and geologic conditions that enable exploitation through openpit mining without expansive drilling and blasting.
Also, he points out that the gold price remains volatile, with the financial difficulties facing Europe and the US likely to push the gold price up to $2 000/oz by 2012.
Meanwhile, Dupuy says the Journées Minières et Pétrolières du Mali (JMP) mining event, held in November 2011, was a success.
“With our focus on investment in West Africa, Pearl Gold saw the JMP conference as a good opportunity to present its business.
“The conference enabled us to promote our investment model to finance mining projects, which has been particularly interesting for owners of mining concessions,” says Dupuy.