By Lionel Williams – Deputy editor
A little over a year ago I wrote about how my discussions with senior executives of major, mid-tier and junior gold producers in the United States, Canada, England, Australia and South Africa had left me with the distinct impression that West Africa was the emerging star on the international gold scene.
Having just been through the same exercise, I am even more convinced that the region has grown in stature over the past year, and that an increasing number of gold producers are underlining their confidence in the region by advancing their growth strategies in West Africa even further. It seems that everyone, from the majors like AngloGold Ashanti, Gold Fields and Newmont Mining Corporation, through the mid-tier ranks of companies like Iamgold, Randgold Resources, Resolute Mining and MDL, and down to newcomers like PMI Gold Corporation, is heavily involved in expanding existing operations in West Africa or preparing to establish new mines in the region.
For example, Newmont Mining Corporation, the world’s second largest gold producer, aims to double its current production in Ghana to over a million ounces by early 2014, and says its underground exploration could push the company’s West African output even higher.
Having invested US$740 million in Ahafo, its only producing mine in Ghana, group executive, operations: Africa Adriaan van Kersen reveals that the company will be ploughing close to US$800 million into its new Akyem project, which is expected to produce between 480,000 and 550,000 ounces a year in its first full five years.
And as far as future exploration elsewhere in West Africa is concerned, Newmont is more than happy to look at other opportunities in such countries as Cote d’Ivoire, Burkina Faso and Mali.
Another company equally committed to West Africa is Vancouver-based Iamgold Corporation, which produces approximately a million ounces a year from eight gold mines on three continents – over 40% of it from West Africa – and sees the region playing a significant role in achieving the company’s objective of steadily increasing its gold production.
Meanwhile Randgold Resources has set itself an annual production rate target of more than 1.2 million ounces of gold in West Africa by 2014, which means close to a threefold increase in output in less than four years. “As you know West Africa has been a fantastic address,” says CEO Mark Bristow. “It’s a very exciting time in West Africa. We have stated that, of all the big gold provinces in the world, the two that really excite us are in West Africa and the DRC. I believe that those are the two new addresses where we are going to see continued growth in gold production, and in West Africa there are some substantial base metal developments on the horizon which are going to change the face of those economies and countries.”
Australian-based Resolute Mining Limited has been achieving increasing success in switching its gold focus from Australia to Africa, and is now spreading its activities in West Africa in its intensifying search for future development opportunities.
CEO Peter Sullivan reveals that capital, exploration and ramp-up costs at its Syama project in Mali have amounted to about US$250,000. Syama is currently ramping up to full production of 250,000 ounces a year, and Resolute has embarked on a vigorous West African growth strategy seeking to spread its exploration campaign for new gold deposits outside Mali; to uncover new gold deposits in Côte d’Ivoire; and to grow its business by monitoring and assessing the possibilities of mergers and acquisitions in the region.
Another Australian-based company, MDL Limited, has spent some US$300 million on developing its Sabodala mine and mill in Senegal, and is currently producing around 135,000 ounces a year.
And a newcomer on the West Africa scene is Vancouver-based PMI Gold Corporation, which is planning to spend around US$250 million to launch three gold operations within the next three to five years to produce close to 300,000 ounces a year.
As president and CEO Douglas MacQuarrie says: “The West African gold sector is quite ‘hot’ at the moment, and the Australians have had quite a bit of success in that market. So there’s an awful lot of liquidity floating around the market place for another West African gold developer – and we are stepping into the market in that environment.”
Quite clearly, the bottom line remains that – whether you are an industry leader or a newcomer – thepotential of West Africa as a target for gold exploration, development and production is about as good as it gets. It won’t take more than a glance through the pages of this issue of Mining Review Africa to convince you of that fact.