“Ghana used to be the first port of call for mining in Africa, but today, there are many other mining jurisdictions and industries that are receiving attention. Ghana needs to place emphasis on structuring policies in such a way to be competitive and to attract investment.”

Bashir Amed

VICE PRESIDENT OF PRODUCTION & DEVELOPMENT, ASANTE GOLD

November 12, 2019

Can you provide an update on Asante Gold’s Kubi project?

The Kubi gold deposit is located on a major structural ‘break’ between Birimian and Tarkwaian Proterozoic age meta-volcanics and sediments. The famous Ashanti shear zone that hosts the major Obuasi orebodies transects the property just to the west of the Kubi Main deposit. The Kubi Main deposit was initially explored by BHP in the 1980s, by Nevsun Resources Ltd in the late 1990s and by PMI Gold Corporation from 2006 to 2012. Over US$30 million in historical exploration has occurred on the property, and currently, the Kubi gold mine is being re-developed as a potential near term green mining project, producing approximately 25,000 to 45,000 oz of gold per year. High-grade gold areas have been indicated from previous drilling, and there is good potential to increase gold resources at depths below 400 m. This is our motivation to go underground.

Can you elaborate on the Sustainable Mining by Drilling (SMD) technique to be used at the Kubi projects?

The new SMD mining technique is a two-stage drilling method that enables direct mining of narrow deposits. The SMD method is being developed and commercialized by Anaconda Mining in collaboration with Memorial University of Newfoundland. The proposed SMD method has apparent huge advantages over conventional narrow underground mining techniques and appears well suited to the +5 g/t Kubi project mineralization.

The SMD technique has not been tested in the mining space but has been proven in other industries such as the oil industry. The SMD system enables the direct mining of narrow deposits while reducing the cost of ore extraction by 50% compared to conventional mining techniques. Additionally, SMD is capable of accessing areas that are not open to conventional mining and reduces the environmental footprint of the operation. The process also bypasses the crushing and grinding circuits by moving the +-2mm drill cuttings produced by mining direct to the mill in a slurry. This technique slashes the mining costs, development time and capital required to take near surface gold deposits to production. Our Kubi main zone gold resource appears to be well suited for the application of this technique.

What is Asante Gold’s financing strategy moving forward?

Asante Gold has been actively looking for a partner. We are offering 50% of the property at a price of US$20 million. We are also looking to obtain a manageable loan to move the project forward. Using the SMD method, obtaining US$10 million would allow us to move the project forward.

How important is greenfield exploration for the future of gold mining in Ghana?

Ghana is a mature mining country, and the view is that there are not many greenfield exploration opportunities. It is necessary for junior companies such as Asante to generate prospects that can then be further developed by the majors. The challenge in Ghana is that junior companies that venture into greenfield projects are not well supported. I believe when it comes to the regulatory framework, junior companies should be separated from the majors so as to give them a better opportunity to perform.

Are there any government initiatives to boost exploration in Ghana?

Exploration activities in Ghana are not receiving much government support. It is also very difficult to attain financing for exploration, and companies often must rely on shareholder investment, but when the market is tough, exploration companies struggle. I believe that the banks in Ghana should step up their effort to support exploration in the country. Maintaining Ghana’s position as a top gold producer will require more efficient gold operations, and investment is necessary for sustainability.  

What is the reason for the northern region of Ghana being relatively unexplored?

The northern region of Ghana is quite remote and there is a lack of infrastructure. Now that the gold price has increased, mining companies are looking to venture more into the north of the country. I believe that the increase in gold prices would encourage exploration activities in Ghana.

Has artisanal mining been an issue for Asante Gold?

Artisanal mining has always been an issue in Ghana, but I believe that our challenge is creating job opportunities for the population. If artisanal miners had other alternatives, I believe that they would take those opportunities. To date, Asante Gold has had to manage artisanal mining through a good community relations strategy.

How far is Ghana from a reality where every mine needs to be highly mechanized or modernized to be profitable?

Currently, most of the mining in Ghana is on surface, and we are only now starting to transition to underground mining. Compared to a country such as South Africa, Ghana still has a long future in mining. I do believe that mining will become more challenging compared to what we are used to, but the technologies to mine underground efficiently are already available. Ghana still holds significant mining opportunity, and there are a lot of areas that have not yet been explored.

Is the fiscal regime and mining code in Ghana competitive enough to attract investment?

Ghana used to be the first port of call for mining in Africa, but today, there are many other mining jurisdictions and industries that are receiving attention. Ghana needs to place emphasis on structuring policies in such a way to be competitive and to attract investment. We should make it easier for people to come into Ghana so that the country is able to reap the benefits.  

What is Asante Gold’s vision for the future?

Our vision is to create a mine that is indigenously Ghanaian.  We have struggled because of the gold prices and scarce investment into the mining industry, but gold is again becoming much more important to international financial systems. Gold will always maintain its glitter, and I am positive about Asante Gold’s future.

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