Going for gold in Ghana

11th April 2014 By: Carina Borralho

The Asanko gold mine will be Ghana’s newest gold mine, joining the ranks of well-established gold producers such as Newmont, AngloGold Ashanti and Kinross, with the potential to become one of Ghana’s largest,” says Asanko president and CEO Peter Breese.

The project was started following Asanko’s acquisition of gold developer PMI Gold Corporation, in February, and the merger of the company’s two neighbouring assets, Esaase and Obotan.

With over 7.5-million ounces of gold resources and 4.8-million ounces of mineral reserves, the Asanko gold mine will be the foundation on which the company will establish itself as a midtier gold mining company.

Phase 1 of the project comprises an openpit operation and a three-million-tonne-a-year carbon-in-leach (CIL) processing plant, which is projected to produce more than 220 000 oz/y in the first five years of operation.

Breese explains to Mining Weekly that Phase 1 is already permitted and that detailed design for the plant is nearly complete.

“We expect to make an investment decision to begin construction midyear, and have allowed for a 21-month construction and commissioning period, targeting first gold production in the first quarter of 2016,” he says. The mined gold is expected to be refined at South African gold refinery Rand Refinery.

The project has an estimated capital cost of $298-million, of which $16-million has been spent to date. The capital cost includes about $82-million in prestripping costs to access the Nkran main pit. “However, with an estimated $270-million in on-hand cash, the project is fully financed,” says Breese.

Meanwhile, it is estimated that Asanko will employ between 800 and 900 people at the mine during Phase 1 steady-state production, which will be under way in 2016. However, construction of the project will require peak staffing of more than 1 000 workers.

Breese adds that, owing to Ghana’s long history of gold mining, there is an abundance of highly skilled workers in the country. “Nevertheless, Asanko has embarked on a training programme in the local area to develop vocational skills for work in and around the mine.”

Meanwhile, Breese tells Mining Weekly that the challenges associated with operating a mine in Ghana are typical of those in a mature mining district, which include competing for top-quality labour, managing operating costs and using capital effectively to improve operating margins. “These will be our key focus areas once we start production to ensure that we always remain as competitive as possible,” says Breese.

About Asanko

Asanko’s vision is to become a midtier gold producer, with the Asanko gold mine as its flagship project. The company hopes to achieve this by implementing a phased development approach, targeting around 200 000 oz/y during Phase 1, and then increasing production to 400 000 oz/y by the time it fully implements Phase 2.

Asanko further aims to grow both organically, from near-mine and in-country exploration, and through acquisition. “We believe there is a real window of opportunity to acquire proven ounces in the ground, [which will be] cheaper than embarking on expensive exploration programmes that may not deliver,” concludes Breese.