Ghana was once known as “the gold coast of Africa,” and, with annual production of 2.3 million oz., the country remains the second-largest gold-producing nation on the continent.
With the recent upswing in the price of the yellow metal, Ghana is receiving increasing attention as companies set about exploring the region for those elusive multi-million-ounce trophy deposits.
Sometimes, though, the hunters can become the hunted. Such was the case for Ghana’s most established mining house,
The new company will be named
Experience and money are two things needed to capitalize on opportunities at Ashanti’s flagship Obuasi mine, 180 km northwest of Accra. Over the next five years, AngloGold has committed to spending US$570 on capital expenditures, US$44 million on underground exploration, and US$110 million on the upgrading of underground equipment, infrastructure, and environmental work at Obuasi. For AngloGold, Ashanti’s substantial land holdings further diversify its property portfolio and establish a collection of long-life, low-cost assets.
The resulting company will have six operations in five countries with combined reserves of 45.1 million oz. In addition, AngloAshanti will have 24 open-pit and underground operations distributed across 11 countries in the world’s principal gold regions.
AngloAshanti will be a powerhouse with proven and probable reserves in the region of 93.2 million oz., pro-forma production of 7.3 million oz., and a total cash operating cost of US$220 per oz. The combined company will have US$1 billion in earnings before taxes, depreciation and amortization. Investors will undoubtedly be attracted to its pro-forma market capitalization of US$8.3 billion and increased liquidity, particularly in North America, where two-thirds of Ashanti’s and AngloGold’s shares currently trade.
Tarkwa
Another mining giant in Ghana is
Gold Fields acquired its interest in the Tarkwa underground mine from the government in 1993 for US$3 million and a commitment to complete a feasibility study on the open-pit potential of the leases. As a result of the study, Tarkwa began open-pit mining in 1998 and has since produced more than 2 million oz. from open pits. Later, in 2002, Gold Fields acquired the Damang mine, roughly 35 km to the northeast. Tarkwa has reserves and resources equivalent to 10.7 million oz., whereas Damang has 22.3 million oz.
In June 2003, gold mines in Ghana produced 839,000 oz., including 540,000 oz. at a total cash cost of US$194 per oz. from Tarkwa and 299,000 oz. at a cash cost of US$244 per oz. from Damang.
Ore at Tarkwa is mined from many open pits and processed at one of two plants. The so-called North Facilities operate at the daily rate of 25,000 tonnes, while the South Facilities, which were part of Ashanti’s Teberebie operation and purchased in 2001 for US$5 million, consist of two 12,000-tonne-per-day plants, one of which is idle. The idle plant may be brought back on-stream in order to boost processing rates. Gold Fields will also spend US$159 million building a 4.2-million-tonne-year semi-autogenous-grinding (SAG) mill and carbon-in-leach (CIL) plant, and plans also call for a switch to owner from contract mining.
At Damang, reserves are expected to be depleted by the fourth quarter of 2004. Gold Fields will therefore spend US$4 million exploring the leases surrounding the property.
Ahafo
An updated feasibility study suggests Ahafo will yield an average of 500,000 oz. gold per year at a cash cost of US$175-185 per oz. over 15 years. At the end of 2003, proven and probable reserves stood at 108.6 million tons grading 0.07 oz. gold per ton, equivalent to 7.63 million oz. at a gold price of US$325 per oz.
The 700-sq.-km Ahafo project was brought into the Newmont fold following the acquisition of Normandy Mining in 2002. The property is in the Brong Ahafo region, 290 km northwest of Accra. Newmont has a 100% stake in the project, subject to the government’s 10% carried interest after capital has been returned.
Exploration crews have identified more than a dozen deposits minable by open-pit methods along a 75-km-long strike length. The deposits, which remain open along strike and at depth, are between two regional shear structures, and there is significant potential to find additional targets.
In 2003, Newmont completed a 57,000-metre drilling program, including stepout holes and deep drilling of known deposits. The results enabled the company to convert inferred material into reserves, and suggested that mineralization becomes thicker at depth. This discovery, in turn, induced Newmont to increase the proposed depth of the planned Kanyessa pit by 100 metres to roughly 300 metres. Assay results from additional holes drilled in 2003 are pending.
The Ahafo feasibility study proposes construction of a 100,000-ton-per-day SAG and ball mill plant with a CIL recovery circuit and, if necessary, gravity recovery circuit. Recoveries are estimated to be 89%. The projected capital expenditure is US$350 million, construction is set to begin in the first half of this year, and startup is slated for the second half of 2006.
Akyem
Newmont’s second development project in Ghana, also acquired in the Normandy takeover, is Akyem, which is in the Birim North district, 130 km northwest of Accra. The major holds an 85% interest in the 3,800-sq.-km land package that includes the property. The remainder is owned by Ghanaian-based Kenbert Mines, and, again, both interests subject to a 10% carried interest by the government once capital has been repaid.
Akyem’s reserves at the end of 2003 were 80 million tons averaging 0.05 oz. gold, equivalent to 4.3 million oz. Exploration suggests the deposit remains open along strike and at depth. In addition to ongoing exploration, Newmont is performing tests related to metallurgy, engineering and the environment.
The company estimates Akyem will produce 350,000-400,000 oz. annually at a total cash cost of between US$150-160 per oz. over a mine life of 13 years. Projected capital costs are in the range of US$220-245 million, and the site will require SAG and ball mills, a CIL recovery circuit, and possibly a gravity recovery circuit. Startup should occur in 2007.
Golden Star
Meanwhile, the Bogoso-Prestea gold mine continues to exceed the expectations of 90%-owner
For 2004, Golden Star expects Bogoso-Prestea to produce 185,000-210,000 oz. gold at a cash operating cost of US$200-225 per oz. Next year’s output is pegged at 350,000 oz.
The company is especially pleased that combined proven and probable reserves at Bogoso-Prestea and Wassa rose 61% between 2002 and 2003. That’s equivalent to 3.5 million additional ounces of gold.
Situated 200 km west of Accra, within the prolific Ashanti trend, the Bogoso-Prestea mine comprises the 145-sq.-km Bogoso concession and the adjoining 129-sq.-km Prestea concession. Prestea includes only surface mining rights to a depth of 200 metres, whereas Bogoso covers an 18.5-km strike length of a faulted contact zone known as the Main Crush, a structural corridor varying from 1 to 2.5 km in width. Similarly, Prestea is underlain by a 22-km section of the Main Crush. Almost 90% of Bogoso’s production has come from the Main Crush zone; larger deposits are found at bends and junctions of the fault. Prestea covers a 22-km section, where the zone consists of a series of anastamosing, steeply dipping faults.
Wassa was discovered in the late 1990s and developed in 1998 at a cost of US$43.3 million. The conventional open-pit/heap-leach operation entered production in 1999 at the planned rate of 95,000 oz. per year at a cost of US$161 per oz., and the mine life was projected to be six years. However, recoveries were lower, and production slower, than expected, forcing the operation to close. Golden Star acquired Wassa in 2001 and is currently completing drilling and technical studies as a prelude to reactivating the project.
Drilling recently uncovered a new, high-grade zone, South Akyempim, which is one of six targets found in two parallel trends. The zone was encountered in 15 drill holes, with intersections averaging 3.1 grams gold per tonne over widths of about 7 metres.
— The author is a Toronto-based geologist and freelance writer.
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