Outgoing CEO and chairperson Stan Bharti
Canada-listed junior African Gold Group (AGG) has announced structural changes to its board of directors and management, as the company moves towards construction and first gold at its flagship Kobada gold project, in southern Mali.
AGG promoted COO Danny Callow to president and CEO, appointed Scott Eldridge nonexecutive chairperson, Jan-Erick Back vice-chairperson and John Begeman lead independent director.
Stan Bharti, the current chairperson and CEO, is stepping down.
Callow joined AGG as COO in August last year, having previously served as CEO and executive director of Glencore’s Katanga Mining and CEO of Mopani Copper mines.
New chairperson Eldridge is an executive with international experience in raising project finance and equity for mining projects. He cofounded Euroscandic International Group, a private company offering merchant banking and advisory services. Eldridge also served as VP: finance and CFO of Amarillo Gold, president and CEO of Arctic Star Exploration and is CEO of Canarc Resource.
Pierre Pettigrew will remain on the board as an independent director, while Ryan Ptolemy will step down as an executive director, but will remain as CFO of the company.
“We are positioning AGG to be the next multi- asset gold producer in Africa, and have the benefit of this new board’s vast experience to take this company into production.
“We now have a top-class operating team led by Danny Callow, who has built and operated a number of mines in Africa over the past 28 years, most recently running Glencore’s African Copper and Cobalt division, and who has fast-tracked Kobada into being construction ready in a few short months,” says Bharti.
AGG’s flagship project is the planned Kobada mine, for which it recently published an updated definitive feasibility study (DFS) and a new mineral resource and reserve estimate.
Total proven and probable reserves increased 48% from the 2016 feasibility study to 754 800 oz. The pit constrained mineral resource estimate in the inferred category increased to 1.14-million ounces of gold, with an average grade of 1.33 g/t.
Callow says the large jump in mineral reserves significantly improves the project’s economics.
Kobada now has an after-tax net present value (NPV) of $226-million and an internal rate of return (IRR) of 41.1%, at a gold price of $1 530/oz. The 2016 study calculated an after-tax NPV of $126-million and an IRR of 55%.
The total capital expenditure of $125- million will be repaid in 3.82 years from the start of production.
On average, Koboda will produce 100 000 oz/y in the first five years of its 9.4-year mine life. Average total operating costs will average $704/oz and the all-in sustaining cost will average $782/oz.
AGG says it will buy power from a standalone 11 MW hybrid solar/thermal power plant, which will be funded by an independent power producer.
An in-depth study has found that the development of a hybrid solar photovoltaic, battery energy storage system and thermal power plant is the best option for the mine, which is located in a region with relatively poor electricity infrastructure.
African Gold has also announced a planned name change to Avion2Gold.