Akrokeri-Ashanti acquires Goldenrae

Toronto-based junior gold producer Akrokeri-Ashanti Gold Mines (AAGM-C) is significantly expanding its presence in Ghana with the acquisition of the private Ghanaian company Goldenrae Mining.

For 85% of Goldenrae’s shares, Akrokeri-Ashanti will pay US$2 million, of which US$1.7 million will be derived from future production revenues on Goldenrae’s properties. The Ghanaian government holds a 10% carried interest in Goldenrae and the remaining 5% interest is held by a local company.

The vendor is Netherlands Development Finance, which acted for the various European financial institutions that, in effect, repossessed Goldenrae from Sikaman Gold Resources (SKG-T) in the mid-1990s.

Goldenrae owns the Kwabeng and Pameng gold-mining leases in southeastern Ghana, which together contain alluvial reserves estimated at 130,000 oz.

gold in 4.1 million cubic metres. As well, Goldenrae holds a prospecting licence on a third, larger gold property situated in the same region.

The Goldenrae alluvial gold mine operated from 1991 to 1994, producing just 16,800 oz. gold before technical problems forced the mine’s closure. Since that time, the operation — including a 150-cubic-metre-per-hour floating alluvial wash plant — has been maintained by a skeleton staff of Ghanaians.

Akrokeri-Ashanti Chairman Clifford Rand says that the reserves at Kwabeng and Pameng are well delineated and that the company hopes to restart mining at Kwabeng by mid-1999.

Once work has progressed sufficiently at Kwabeng, the company plans to move the wash plant to the third property, which, ideally, will have been developed into a viable mining licence by that time.

“We’re not quite sure yet how we’re going to tackle Pameng,” says Rand. “But we’ll be looking at a smaller, dry-mining stationary plant for Pameng, similar to what we’re doing at our Bonte gold mine [also in Ghana].” Rand says that the company has already held preliminary discussions concerning financing for earth-moving equipment, as well as talks with local mining contractors.

Akrokeri-Ashanti has been operating in Ghana through two subsidiaries: 85%-owned Bonte Gold Mines, which holds a 30-year mining licence on the Esaase property; and Jeni Gold Mining, which holds 100% of the surface rights and a 50% option on the bedrock rights to the adjacent Jeni property.

Akrokeri-Ashanti is counting on the Goldenrae properties to eventually produce 28,000 oz. gold annually, which will add to the 38,000 oz. that are projected to be produced annually from the Jeni property’s alluvial deposits.

Says Rand, “We’re not hell-bent on expansion. We’re going to be very careful how we grow and what resources we put into furthering our mining projects.

We have good cash flow from the Jeni, but we also have some debt we’d like to pay down significantly. At these gold prices, we can’t afford to make any mistakes.”

Regarding the hard-rock exploration program on the Jeni property, Rand says that the results to date have been “disappointing,” and that the company, with the assistance of a geological consulting firm, is re-evaluating the whole program.

As of March 31, Akrokeri-Ashanti had spent more than US$250,000 collecting 11 tonnes of trench samples at Jeni. In order to keep its option in good standing, it must spend another US$250,000 on the property by the end of September.