In 2018, junior explorer Asante Gold Corporation was ready to call it a day at its Kubi gold project in Ghana.
However, following an upturn in the gold market, high induced polarization (IP) survey results and the possibility of using a new and more cost-effective mining technique, has renewed interest in the project.
CEO DOUGLAS MACQUARRIE tells GERARD PETER why Kubi holds great promise for the company.
This article first appeared in Mining Review Africa Issue 2, 2020
Asante Gold holds the rights to purchase a 100% interest in the Kubi Mining Lease – a 20 year renewable mining lease issued in 2008.
The Kubi Main deposit was initially explored by BHP in the 1980s; in the 1990s by Nevsun Resources; and from 2006 through to 2013 by PMI Gold Corporation (MacQuarrie was the CEO of PMI to April 2011).
“Over US$30 million in exploration has occurred at Kubi to date. Nevsun leased the near surface oxide resource to Ashanti (later AngloGold Ashanti) in 1998, and through 2005, 500 000 t of ore with an average grade of 3.65 g/t gold, producing 59 000 oz of gold was mined from two small open pits,” states MacQuarrie.
“Ore was trucked from Kubi, a distance of 25 km to Anglo’s oxide processing facility at Obuasi. The pits were then backfilled to daylight and reclaimed.”
A change of fortune
However, while there were promising signs to get Kubi going again, market conditions were not in the company’s favour.
“It’s been a tough six or seven years for junior gold explorers with weak gold prices,” explains MacQuarrie. In the junior business, the trend is your friend and with the trend going down, it meant we were not getting money.
“Also, in Canada we saw the demise of broker dealers that normally could provide $500,000 finance to juniors to further their exploration.
“And the major banks will not finance you unless you have a bankable feasibility. Essentially, the rug got pulled out of the industry and we have been on survival mode.”
As such, Asante was looking to joint venture or sell Kubi in 2018.
MacQuarrie has 40 years’ mineral exploration experience, including 27 years in West Africa.
He has been responsible for the discovery, acquisition and development of many significant gold deposits both in Canada and in Ghana. So, when the gold price started its upswing last year, he decided to take another look at Kubi.
“There was an area just to the east of the Kubi pits and I realised that there were a couple of interesting drill intersections in a rock that was previously not targeted. I did a reinterpretation of the airborne magnetics and identified a fold structure that looked very promising.”
“We have our own internal geophysics crew and IP equipment. We realised that things were slow and we don’t have a lot of money, so I said, let’s go and do some exploring. As a result, we identified six IP key targets with the nearest just 150 m east of our resource,” MacQuarrie states.
The current NI 43-101 mineral resource at Kubi shows a measured resource of 0.66 Mt at 5.30 g/t gold for 112 000 oz; an indicated resource of 0.66 Mt at 5.65 g/t gold for 121 000 oz; and an inferred resource 0.67 Mt at 5.31 g/t gold for 115 000 oz.
MacQuarrie believes Kubi, like most deep seated Ghana gold deposits, has considerable expansion potential down dip.
In January this year, Asante Gold announced that anomalous high IP survey results had been noted vertically above a previous drill intersection that graded 3.0 m of 4.5 g/t gold.
This new IP anomaly is located just 150 m to the east of the Kubi Main gold resource and has a significant strike and inferred +360m dip potential.
In another exciting development, MacQuarrie states that Asante Gold is looking into a new mining technique, Sustainable Mining by Drilling (SMD), at Kubi.
SMD is a two-stage drilling method that enables direct mining of near vertical narrow deposits.
The technology is being developed and commercialised by Anaconda Mining, in collaboration with Memorial University of Newfoundland, and utilises technology proven in other industries.
This concept is a complete surface mining option with a drilling rig as a main surface piece of equipment used in conjunction with several field proven down hole technologies.
The mining process would be divided into two campaigns: drilling the pilot holes and accurately mapping the vein, then enlarging the pilot holes to predetermined sizes to recover the ore.
According to Anaconda, SMD technology is a “disruptor” in that it reduces the cost to extract ore by 50% over conventional underground narrow mining techniques; it places the operator in a safe location on the surface; it can access areas not open to conventional mining; reduces the environmental footprint; and bypasses the crushing and grinding circuits by moving the +-2mm drill cuttings in a slurry direct to the mill.
“The new SMD mining technique slashes the mining costs, development time and capital required to take near surface gold deposits to production. Cash flow from a gravity plant commences immediately that the drill starts turning,” adds MacQuarrie.
MacQuarrie states that the plan is to re-develop Kubi as potential near-term green mining ~25 000 to 45 000 oz pa gold producer. However, he cautions:
“As a geophysicist, I can say that while the geophysics might be interesting, it does not mean that every target will eventually become a mine. If it did, I would be Midas. As such, I am hoping that at least two or three of these targets that we have identified will have some gold,” he concludes.