THE GLOBAL SEARCH FOR GOLD SPECIAL — Junior companies converge on West African prospects

The political and economic reforms sweeping the African continent continue to attract an increasing number of North American gold exploration companies.

The yellow metal has been mined in West Africa for more than 2,000 years. However, it was not until the 1970s that mining companies recognized the geological similarities between African Proterozoic belts and the prolific Archean greenstone belts of the Canadian Shield.

With the demise of colonial rule in the 1960s, many countries adopted centrally planned economies that failed to adapt to a changing world. With the realization that Western capital and expertise were required for the development of Africa’s own resources, many countries have shifted towards market economies and embraced foreign investment.

Gold exploration has focused on the West African craton, one of three Precambrian-aged platforms in West Africa. Gold mineralization is predominantly found within quartz veins or reefs along structural corridors in Birimian-aged greenstones. Countries with advanced projects on this craton include Ghana, Burkina Faso, Mali, Guinea, Ivory Coast and Niger.

The largest producing gold mine in West Africa is the Obuasi mine in Ghana, which is owned and operated by Ashanti Goldfields (AHD-T). The mine has operated for more than 100 years, producing 932,323 oz. gold from underground and surface operations in 1995 at a cash cost of US$208 per oz.

Ashanti Goldfields has embarked on an expansion program in Africa to become the world’s fifth-largest gold producer. With the recent purchase of International Gold Resources (IGC-T) and Ghana Libyan Arab Mining Company (GLAMCO), the company has acquired an 90% interest in the past-producing Bibiani gold mine in Ghana. Reserves at the mine stand at 19.7 million tonnes grading 2.76 grams gold per tonne.

Other companies active in the region include Golden Shamrock Mines (GSX-T), which has acquired two projects of interest. One of these, the operating Iduapriem gold mine in Ghana, is expected to produce 130,000 oz. gold this year. The other asset, situated in Guinea, is the Siguiri 1 project, which has proven and probable reserves of 54.8 million tonnes grading 1.55 grams gold.

Following a merger with Cluff Resources, the company has assumed a controlling interest in the Ayanfuri gold mine in Ghana, as well as other interests in Zimbabwe and Tanzania. Ashanti, meanwhile, is completing documentation related to its proposed merger with Golden Shamrock.

A separate joint-venture arrangement with International African Mining Gold (IMG-T) (IAMGOLD) will allow Ashanti Goldfields to explore 11 concessions covering more than 11,000 sq. km combined in Senegal, Guinea and Niger.

To the southwest of Ashanti’s Obuasi mine, numerous exploration companies have discovered deposits along strike of the Ashanti gold trend. Birim Goldfields (BIRM-C) and Battle Mountain Canada (BMC-C) are jointly exploring the Dunkwa property, which contains the 400-metre-long Mampon gold zone that remains open along strike. Birim Goldfields has also recently purchased a half interest in the nearby Akrokeri gold mine. A former producer from 1902 to 1909, it will be jointly explored with Australian junior Esmeralda Exploration.

Other companies with operations in Ghana include Golden Knight Resources (GKR-T). The Vancouver-based company has acquired a 5% interest in the Tarkwa concession of Gold Fields of South Africa, which includes a small operating mine and five concessions. Companies with gold projects include Nevsun Resources (NSU-T), Fairstar Explorations (FFR-M), Ghana Goldfields (GHN-V),

International Tournigan (ITG-V), Pacific Comox (PCM-V), Carlin Resources (CLM-V), Adikann Goldfields (ADK-V) and West African Mining

Exploration (SMF-M) (SEMAFO).

Meanwhile, in Mali, partners IAMGOLD and Anglo American continue to develop the Sadiola Hill mine. Each company has a 38% interest. While most exploration companies in West Africa are exploring for mineralized shear zones, Dennis Jones, IAMGOLD’s manager of exploration, says the deposit may resemble the Carlin-type deposits of Nevada, though deep laterization has obscured many geological details.

The companies have outlined proven and probable reserves of 49.2 million tonnes grading 2.86 grams gold at Sadiola, which are amenable to open-pit mining. Production is expected to begin by the end of 1996 and average 386,000 oz. per year over the first six years of production. Under a joint-venture agreement, the two companies are spending US$3 million exploring the area surrounding the Sadiola Hill deposit.

Also active in Mali are partners Oliver Gold (OGO-V) and Trillion Resources (TLQ-T), who are working the Segala gold project. The juniors are continuing to develop the Main zone, where a preliminary resource of 11 million tonnes grading 2.8 grams gold has been outlined in quartz-carbonate veins. A prefeasibility study is expected by the end of September.

Encouraging drill results were recently reported from the Main and nearby Northwest zones, which together have been traced over a 1,200-metre strike length and remain open to the west and at depth. The best results include: 4 grams gold over 45.8 metres in hole 6; 3 grams gold over 6.9 metres and 7.5 grams gold over 27.6 metres in hole 7; and 7.1 grams gold over 20.2 metres in hole 8.

Other companies exploring in Mali include Golden Star Resources (GSC-T) and Mink Mineral Resources (MKM-V).

Meanwhile, in Ivory Coast, Eden Roc Minerals (EDN-T) continues to seek out more reserves at its Afema gold mine, which entered production in 1992. The mine produced 26,080 oz. gold in 1995 at an average grade of 2.29 grams. Production at the mine comes from several deposits over a 5-km-long section of the Afema shear zone. Golden Star Resources is also actively exploring in the country on the Comoe property, as well as in nearby Mali.

Burkina Faso (formerly Upper Volta) has seen an increase in exploration activity since passing a new mining code in 1993 to encourage foreign investment. Golden Knight is in the early stages of exploring for vein-type and related peripheral low-grade deposits at its Seguenega and Comidok properties. High River Gold Mines (HRG-T), as well as Kinbauri Gold (KNBR-C), Ascot Resources (AOT-V) and SEMAFO, are also engaged in gold exploration across the country.

Niger programs

Across the border in Niger, partners Etruscan Enterprises (EET-V) and Echo Bay Mines (ECO-T) are exploring the Koma Bangou property, where a feasibility study is under way on the several open-pit deposits that constitute that project. The companies are also advancing the Samira deposit on the Tiawa property, which contains a preliminary resource of 20.7 million tonnes grading 2.9 grams gold.

Other companies with gold exploration programs in Niger include Barrick Gold (ABX-T), Imperial Metals (IPM-T), Ashanti Goldfields and Carlin Resources (CLM-V).

In Guinea, SEMAFO is exploring the Jean-Gobele concession, where the company has identified 557,000 tonnes grading 6.2 grams gold within quartz veins. The company is exploring for extensions to the vein system, as well as low-grade halos, which are amenable to bulk mining.