While South Africa is expected to be number-one in gold for decades to come, the list of the world’s top 20 producers is expected soon to include several African nations now undergoing a mine-building and exploration boom.
South Africa has a solid lead in global gold production, with 14.4 million oz. of the yellow metal produced there last year, well above the United States (10.9 million oz.), Australia (9.7 million oz.) and fourth-place Canada (5 million oz.). Three other African nations — Ghana, Zimbabwe and Mali — are numbers 10 (2.5 million oz.), 16 (964,530 oz.) and 17 (803,775 oz.), respectively.
Tanzania is expected to make the top-20 list in the next few years, thanks to a flurry of mine development and exploration involving both juniors and majors. Exploration programs are also taking place in the West African nations of Niger, Burkina Faso, Ivory Coast and Senegal, though activity in the latter two countries is greatly reduced from a few years ago.
North American, Australian and African companies are fiercely competing for the more advanced gold projects on the continent, as evidenced by the seven majors that had sought to acquire a 50% stake in the Geita mine in Tanzania’s Lake Victoria district, recently won by
AngloGold is the world’s largest producer of the yellow metal, having churned out a whopping 6.9 million oz. in 1999. As such, it is not willing to take a back seat to the North American and Australian companies that dominated African exploration a few years ago.
Ashanti, Ghana’s largest producer, is also using its home-court advantage to expand to neighbouring countries, either on its own or through joint ventures with foreign juniors.
In June of this year, Ashanti and AngloGold expect to commission their Geita open-pit mine, 80 km southwest of Mwanza. Production is targeted at 150,000 oz. this year and an average of 500,000 oz. in each of the following five years. Operating costs are expected to be below US$180 per oz., whereas capital costs are pegged at US$165 million.
Geita boasts measured, indicated and inferred resources totalling 89.2 million tonnes at an average grade of 4.17 grams per tonne. This includes a potential open-pit reserve in the Nyankanga deposit of 19.3 million tonnes grading 5 grams at a stripping ratio of about 8-to-1, and four other pits, which together host reserves of 31.9 million tonnes averaging 2.44 grams.
Ashanti’s partnership with Anglo-Gold in Tanzania extends beyond Geita to include nearby properties, including satellite deposits suitable for processing at their existing infrastructure.
A mere 68 km from Geita,
The US$280-million mine is expected to produce 260,000 oz. in 2001 (starting in mid-year), ramping up to 400,000 oz. in 2005. A mine life of 19 years is anticipated, with costs averaging US$130 per oz.
At the end of 1999, proven and probable reserves in Reef 1 stood at 15.5 million tonnes grading 15.1 grams. The property hosts an additional resource of 3 million tonnes grading 30.3 grams, as well as other potentially high-grade reefs that are in the early stages of drill testing.
Barrick Vice-Chairman John Carrington told shareholders at the company’s annual meeting that Bulyanhulu is more than a mine: “It’s the hub of a new mining district. We have already doubled reserves on the original reef to 7.5 million oz. We continue to drill this reef with success. Results this year have been better than anticipated and are indicating some exciting potential. But there’s more. What really attracted us to Buly was the larger potential of the property. We began drilling four other known reefs on the property last month, and we have discovered potential new reefs north and south of the original mineralization.”
Barrick executives also have high praise for Tanzania’s political stability and its efforts to attract mining investment. President Randall Oliphant described the nation as “an island of calm,” despite unrest in neighbouring countries. He also said the company has established itself as a responsible investor committed to community programs that will improve the lives of local citizens.
Tanzania’s mining boom isn’t confined to the Lake Victoria district. Australian-listed
Built at a cost of US$48 million, Golden Pride is expected to produce a life-of-mine average of 180,000 oz. per year at an average cash cost below US$200 per oz. In mid-1999, the open-pit mine hosted reserves of 10.6 million tonnes grading 3 grams, plus an additional resource of 13.9 million tonnes averaging 2.54 grams. It is now wholly owned by Resolute, which bought out partner Ashanti’s half-interest last summer for US$40 million.
In the wings
In the past two decades, more than 20 million oz. gold have been found in the Lake Victoria greenstone belt, much of it by companies following in the footsteps of artisinal miners. Canadian companies were among the first to recognize the potential of the region, which has marked similarities to the Abitibi greenstone belt of eastern Canada.
In addition to the 51.4-sq.-km Bulyanhulu property, which covers favourable terrain yet to be explored, Barrick acquired more than 1,800 sq. km of ground in the Lake Victoria belt by purchasing South African-based Randgold Resources’ Tanzanian portfolio for US$4.5 million a year ago.
Included in the deal was a 50% interest in the Golden Ridge project, 30 km from Bulyanhulu. This interest can be increased to 65% by advancing the project to feasibility and arranging production financing.
Randgold had acquired the project from
Barrick began drilling at Golden Ridge last fall and, after completing 13,000 metres, doubled the resource in the Main zone to 1.6 million oz. contained in 15.5 million tonnes grading 3.2 grams (based on a cutoff grade of 1.5 grams). The total resource at Golden Ridge now stands at 2.2 million tonnes averaging 1.85 grams, which includes several satellite zones.
Ashanti has also taken an interest in Pangea’s land package, notably the Bulyanhulu South project immediately south of Barrick’s mine. Ashanti can earn a 51% stake in the 108-sq.-km property by spending US$4 million on exploration, and up to 60% by completing a feasibility study.
The current drill program has already produced significant results, notably 4 metres grading 12.97 grams and 6 metres of 3.22 grams. As well, several targets warranting further work were identified. Pangea says three gold showings on the property have reinforced models of a structural and mineralogical setting similar to that of the Bulyanhulu deposit.
One of the more promising projects in Pangea’s portfolio is the 70%-owned Tulawaka project, which comprises 355 sq. km in the western part of the Lake Victoria district. Montreal-based
The East zone at Tulawaka contains a total resource of 1.6 million tonnes grading 18.96 grams (1 million contained ounces), which includes 1.4 million tonnes grading 18.93 grams in the measured and indicated category. The West zone has an additional 736,678 tonnes averaging 2.9 grams.
These calculations were done from surface to an average depth of 135 metres at the East zone, and 30 metres at the West zone. The deposit remains open laterally and at depth.
Recent metallurgical studies show that 97% recoveries can be achieved from combined gravity and cyanidation, with low reagent consumption. The tests were carried out on samples from the talus, saprolite and sulphide ore types from the East zone at Tulawaka.
Pangea is also drilling its Kakindu property, the site of a major artisinal gold rush several years ago. While most of the miners are no longer working the property, their workings cover an area of about 1.8 by 3 km. Ashanti once held an option on the property but dropped it after completing a 2,600-metre drill program. The best results were 1-metre intercepts of 10.23 grams and 8.59 grams associated with quartz stringers, while the widest was 12 metres of 0.77 gram.
Pangea views these results as “inconclusive” in explaining the source of the near-surface gold and, accordingly, will continue work on its own. The program will include fences of 60-metre RAB (rotary air-blast) holes and drilling of other untested geochemical targets. About 10,000 metres of RAB drilling are planned, to be followed by RC drilling if warranted.
Another junior attracting attention because of its well-positioned land package in Tanzania is
Tan Range’s main project is Itetemia, which surrounds the northern and eastern boundaries of the Bulyanhulu mine. As might be expected, Barrick has already secured an option to acquire 60% of Itetemia in return for US$3 million of private placements and arranging production financing.
Tan Range has been active at Itetemia since 1995, with much of its recent work focused on the Golden Horseshoe Reef zone. The company is about to begin a US$800,000 program to test Golden Horseshoe and several nearby geochemical anomalies.
Newmont is expected to resume drilling at Tan Range’s Luhala concession, one of four properties the major optioned last year. The company can earn up to a 70% interest in any of these properties by spending at least US$1.5 million and completing a feasibility study.
Ashanti, meanwhile, holds rights to earn 60% of Tan Range’s Geita East property, immediately southeast of its Geita mine, by completing a bankable feasibility study by 2002.
Ghana
Gold production in Ghana is dominated by the century-old Ashanti mine, operated by Ashanti Goldfields, Africa’s third-largest miner. In addition to its namesake mine, the company has five other operations in Africa, including ones in Guinea and Zimbabwe.
Last September, Ashanti was caught on the wrong side of its hedge position, forcing it to sell assets and undergo a major restructuring that included the aforementioned deal to sell half of the Geita mine in Tanzania to AngloGold.
Now on more solid footing, Ashanti intends to acquire Pioneer Goldfields, whose principal asset is a 90% interest in a company that owns 100% of the Teberebie gold mine in Ghana. Other assets include the Nangodi prospecting licence, near the border with Burkina Faso, and the Deba prospecting licence in Niger.
Teberebie is adjacent to Ashanti’s 80%-owned Iduapriem gold mine in Ghana, which was scheduled for closure in mid-2001 because of depleted reserves. The acquisition will have the effect of extending Iduapriem’s life by about eight years at a production rate of more than 150,000 oz. gold at a cash cost of about US$200 per oz. It will also have the benefit of deferring Iduapriem’s closure for about eight years and keeping its workforce employed.
Sam Jonah, Ashanti’s chief executive officer, says the acquisition “transforms a mine slated for shutdown next year into a long-life mine with competitive operating costs.” Furthermore, he says, Teberebie “contributes to meeting Ashanti’s objective of maintaining annual production of about 1.6 million oz. for the next ten years.”
The deal also extends the life of Teberebie, which began life as an open-pit, heap-leach operation. The oxide portion of the deposit is now depleted. However, the resource that remains (about 4 million contained ounces) is well-suited for milling. Ore will be trucked 3 km to Iduapriem’s carbon-in-leach plant for processing.
Ashanti will pay US$5 million to acquire Pioneer Goldfields at closing, plus US$13.8 million payable over five years.
Montreal-based
Earlier this year, the company completed an agreement allowing Ashanti to acquire about 40 sq. km of the concession, including the Mampon deposit, which contains an independently calculated resource of about 600,000 oz. A feasibility study is currently examining Mampon’s suitability as a source of feed for Ashanti’s Obuasi oxide and sulphide plants and the Ayanfuri mine.
Birim will retain title to a 190-sq.-km area of Dunkwa, as well as the wholly owned Bui belt concession (covering 7,000 sq. km) and the Akrokeri property, farmed-out to a unit of Australia’s
Birim is at the drill stage on four prospects at Dunkwa, plus another four at Bui. A second phase of drilling was recently completed on the Opon prospect at the southern end of the Dunkwa property, which borders Bogoso.
A drill program is also under way at the Tombe-Parabu gold prospect at Bui. It will consist of 4,500 metres of RC drilling to test a gold-in-soil anomaly more than 6 km long and which reaches widths of 300 metres.
Also on the exploration front, partners
Moydow holds a 54% interest in the property and will continue as operator until a positive feasibility study is completed. Normandy can earn up to a 50% interest by spending another US$1.6 million on exploration, above the US$4.9 million it has already spent.
The in-house resource estimate for zone A stands at 7.6 million tonnes grading 2.14 grams gold per tonne. Zone C contains 1.3 million tonnes of 1.83 grams. Zone E contains the largest resource (calculated by consultants Pincock, Allen & Holt): 13.2 million tonnes averaging 2.62 grams at a 1-gram cutoff. More than 75% of the estimated ounces are contained in 8 million tonnes grading more than 3.3 grams gold.
Moydow also plans to explore the Kanyankaw property, near the coast of Ghana, 20 km south of Tarkwa. Geochemical surveys around old workings are planned, as is drilling.
In southwestern Ghana, Ashanti has started a program of mapping and sampling on the Nkroful property, held by Nkroful Mining, which in turn is owned 85% by Vancouver-based
The work program is focused on the unexplored western side of the property, where old artisinal workings have been found. Previous work focused on the eastern part, where the Bokrobo prospect is situated. This target is estimated to contain resources totalling 562,000 tonnes of 7.7 grams.
Burkina Faso
Companies working in this West African nation are quick to praise the government’s commitment to developing a modern mining industry. Among them is
This year’s program is designed to test five major target areas on the Somifa permit. The targets are believed to have potential similar to that of the Goulagou target, which hosts the Goulagou deposit, discovered by Channel geologists last year. The deposit has an inferred resource of 16.3 million tonnes averaging 1.2 grams, including 6.5 million tonnes of 1.75 grams.
Placer Dome is funding this year’s program, which is being carried out by Channel. It will consist of geophysical surveys to define new drilling targets, geochemical soil surveys over large target areas and follow-up drilling.
Channel holds a 95% interest in the Somifa permit. Placer Dome has the right to acquire up to 60% of Channel’s interest by spending US$5 million on exploration. A further 5% can be earned by spending US$3 million on development work.
Elsewhere in the country,
Delta’s chief geologist for West Africa, Douglas Jones, says Intiedougou has “some of the best-looking geology in Burkina Faso.”
The drilling program at Intiedougou is aimed at defining an open-pit resource within a 1,000-by-300-metre target dubbed Peksou.
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