Ashanti hits more gold in Ghana

Ashanti Goldfields (ASL-N) has hit high-grade gold intersections at its Obuasi open-pit mine in the Ashanti region of south-central Ghana.

Diamond drilling from underground encountered a 21-metre interval grading 20.1 grams gold per tonne, as well as a 42-metre interval grading 9.2 grams.

The mineralization is situated down-plunge, and to the north, of several major ore blocks near the Cappendell shaft.

The company is attempting to outline an area 200 metres on strike and 200 metres downdip.

Elsewhere at the massive Obuasi operation, the company is drilling the sulphide resource below the Gyabunsu pit and may construct a decline into that resource, starting from the bottom of the pit.

The sulphide resource is currently estimated at 1 million tonnes grading about 6 grams per tonne.

In the third quarter, Obuasi produced 215,148 oz. gold at a cash operating cost of US$270 per oz. Ashanti’s overall production in the 3-month period was 290,059 oz. — nearly 20% higher than in the comparable period last year.

For the first nine months of 1997, Ashanti produced 861,854 oz. gold at an average cash cost of US$263 per oz. The company expects to meet its objective of 1.1 million oz. for the year.

Gold production was higher at Ashanti’s Ayanfuri and Freda-Rebecca mines, in Ghana and Zimbabwe, respectively.

Construction at the Siguiri gold project in Guinea is six months ahead of schedule. Startup is scheduled for the third quarter of 1998.

At the Bibiani gold project in Ghana, Ashanti has begun pre-stripping and stockpiling ore, with startup scheduled for the second half of 1998.

Meanwhile, in Tanzania, the company is carrying out a feasibility study at the Geita gold project. Close-spaced drilling at the site will attempt to determine proven and probable reserves.

For the third quarter of 1997, Ashanti posted a net income of US$15 million (or 14cents per share), compared with a net income of US$11 million (12cents per share) for the same period last year. Revenue was US$131.8 million, compared with US$95.1 million.

During the first nine months of 1997, Ashanti earned US$37.8 million (35cents per share), compared with US$49.6 million (55cents per share) in the same period last year. Revenue rose to US$392.4 million from US$336.8 million.

For the year, as a result of its hedging practices, Ashanti has realized a gold price of US$450 per oz.