Low-Cost Gold Development in West Africa
This African Gold profile is part of a paid investor education campaign.*
African Gold Group (TSXV:AGG) is a Canadian gold development company currently pursuing projects in resource-rich West Africa. The company is focused on its Kobada gold project in Southern Mali, West Africa. This low capital project is fully permitted, features low operating costs and presents significant upside, with the potential to produce more than 100,000 ounces of gold per annum. With a focus on gold development, African Gold Group has a first-mover advantage by being one of the few construction-ready projects in West Africa.
Kobada gold project is located in Southern Mali in the Sikasso administrative region, near the border of Guinea, and is considered to be a mining-friendly environment with strong government support that is well-aligned for the country’s long term stability. In August 2020, the African Gold Group announced a partnership with SAFE Ltd to enable provenance and transparency of its supply chain process to address changes in conflict minerals regulation and strengthen awareness of local distribution processes.
Mali is Africa’s third-largest gold producer, with gold exports accounting for nearly 70 percent of Mali’s total exports in 2016. With a long history of gold production, the country has a highly developed and active mining culture, with major international companies operating in the region for decades. African Gold Group operates in the prolific Birimian Greenstone Belt and covers over 460 square kilometers across Mali and Burkina Faso. Easy access to water and drilling areas through nearby highway and pontoon river crossing makes this jurisdiction investor-friendly, with many major producers present in the region.
The company is currently focused on becoming Africa’s next mid-tier producer, with favorable prospects for success in the region. In 2020, the company continued exploration drilling over multiple zones to increase resource targeting and reserve ounces. Over the long-term, this optimizes mine life and can establish a longer, potentially higher annual output.
With a proposed three-phase approach to producing a rapid increase in resource extraction, the African Gold Group is well prepared for growth and gold exploration. Starting in 2020, expected phases should include a resource upgrade, a strike extension of the main shear zone and an increased resource from newly identified shear zones all by H1-2021.
The company has an exciting and positive outlook for its ready-to-build projects and mining exploration projects. Through an extensive drilling program, the Company has established a global resource base of 2.3 million ounces of gold. To date only 15 percent of identified shear zones on the Kobada property have been drilled. In addition, the company is currently back drilling to expand gold resource discoveries by targeting three highly prospective areas within their mining permit.
In the space of 12 months, the company has transformed from a smaller scale operation to a larger mining company. A recently completed DFS revealed a 100,000 ounce production profile with a cost of C$782 per ounce all-in sustaining cost, the lowest quartile in West Africa. African Gold Group’s management team has the company strategically positioned for efficient and successful mining, and the company has a highly experienced board of directors and a diverse shareholder portfolio.
Strategic partnerships include Canaccord Genuity (TSX:CF) as financial advisors, as well as Nero Resource Fund and IXIOS Asset Management as shareholders with extensive expertise in the mining industry. Institutional shareholders own around 18 percent of the company and are located across the globe. Additionally, management and insiders own around 17 percent of the shares in issue through a mix of shares, options and warrants.
In their mission for sustainable and environmentally friendly mining, the company has strategic partnerships with DRA NEXUS and SENERGY to build and install a highly efficient hybrid power mining operation. Powered through photovoltaic solar panels, thermal generators and a battery energy storage system, the Kobada gold project is predicted to see a 40 percent reduction in diesel use, which offers approximately C$5 million per year in cost savings.
Likewise, the project is expected to see significant pollution through emissions reduction by over 14 million kg in carbon dioxide emissions and over 5 million liters in heavy fuel oil use. In an ongoing commitment to environmental sustainability, the African Gold Group is also focused on recycling water to extend its mining operations for years to come.
African Gold Group’s Company Highlights
- Focused on the exploration and development of gold platforms in West Africa, with holdings in West Africa’s prolific Birimian Greenstone Belt.
- Operates in the Sikasso administrative region in Mali, which is a mining friendly location with established international interest and strong government investment.
- The Kobada gold project has the potential to produce 100,000 ounces of gold per annum.
- African Gold Group is working towards sustainability and environmentally friendly solutions to mining with strategic partnerships with hybrid-power-focused companies and efforts in significant pollution reduction and water recycling.
- In 2020, the company delivered DFS on time and 20 percent below budget, highlighting the Kobada gold project as a robust project with significant potential for financial and explorative growth.
Kobada Gold Project
The Kobada gold project is a gold development project located 125 kilometers southwest of Bamako, the capital city of Mali. This advanced stage project has a global resource base of over 2.3 million ounces of mostly near-surface gold.
The general site infrastructure is optimized to increase the efficiency of mining operations and reduce potential risks associated with drilling and transportation. The compact design of the project is for the convenience of processing and minimization of haul distances. Likewise, the tailings storage facility is situated away from population centers to increase security against unwanted foot traffic or unauthorized personnel.
This highly prospective project follows a shallow, oxide-only simple free dig mine plan. The proposed plant design is based on a proven and established gravity/carbon-in-leach technology that uses simple gravity and a CIL process that offers favorable leaching characteristics for the ore. Because of this, blasting and reagent use could be significantly reduced to maintain low operating costs compared to other more conventional ore body processing methods.
Definitive Feasibility Study
In July 2020, African Gold Group delivered DFS on time and below budget, showing that Kobada is a solid project with post-tax NPV of C$226 million and an IRR of 41 percent. “Yet again we have exceeded expectations by repeatedly intersecting grades above 30g/t,” said Dr. Andreas Rompel, Vice President of Exploration. He noted that these achievements have established significant resource growth potential for the project.
Here, the 2.3 million ounce resource stretches over four kilometers within a larger 12 kilometer strike length that is yet to be properly tested. With an additional 26 kilometers of shear zone structures identified on the property, there is ample room for discovery.
African Gold Group’s Management Team
Danny Callow—President, CEO and Director
Danny Callow has over 25 years of experience in building and operating mines in Africa. Callow was Head of African Copper Operations for Glencore PLC., Chief Executive Officer and Executive Director of Katanga Mining Limited and Chief Executive Officer of Mopani Copper Mines PLC. Callow is a Professional Mining Engineer and holds an MBA from Henley Management College and a Bachelor (Hons) of Mining Engineering from the Camborne School of Mines as well as a non-executive Director professional diploma from FT-London. Callow has overseen more than US$2.5 billion in mining projects from conception through to full production.
Callow is also a mining engineer with 28 years of experience in building and operating mines in Africa. Board experience includes Katanga Mining, QuestCap International and Eurosun. He was also the former head of the Glencore Copper and Cobalt African division.
Ryan Ptolemy is a CPA, CGA and CFA holder with over 15 years of experience in the public and private sectors. Ptolemy has also served as CFO to a number of companies in the mining sector, particularly exploration and development stage companies.
Scott Eldridge—Chairman of the Board
Scott Eldridge is an accomplished executive with international experience in raising project finance debt and equity for mining projects. He co-founded Euroscandic International Group Inc., a private company offering merchant banking and advisory services, and was head of Debt Advisory. Eldridge has served as VP Finance and CFO of Amarillo Gold Corp as well as President and CEO of Arctic Star Exploration Corp. He is currently CEO of Canarc Resource Corp.
Jan-Erik Back was the former Chief Investment Officer for Eurasian Resources Group with a specific focus on the financing and development of ERG’s portfolio of copper and cobalt assets in Africa. Back has extensive experience in financial markets and has served as Global Head of Investments and Structured Finance Group at BTG Pactual Commodities and previously spent over 10 years with the Hatch Group with a focus on project financing for mining projects.
*Disclaimer: This profile is sponsored by African Gold Group (TSXV:AGG). This profile provides information which was sourced by the Investing News Network (INN) and approved by African Gold Group in order to help investors learn more about the company. African Gold Group is a client of INN. The company’s campaign fees pay for INN to create and update this profile.
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The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with African Gold Group and seek advice from a qualified investment advisor.