Developing Gold Resources in Ghana
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“Money is gold, and nothing else.” – JP Morgan
Asante Gold Corporation (CSE:ASE Frankfurt:1A9) is focused on developing its Kubi Gold Mining Project to production and aggressively exploring its other high potential concessions, all located near the centre of Ghana’s golden triangle. Previous exploration at Kubi has identified a NI43-101 compliant resource estimate of ~350,000oz of gold @ ~5.5 g/t in the upper 400m of the mineralized structure with major exploration upside to depth.
Ghana is Africa’s second largest gold producer and the ninth largest in the world. The politically stable country has mining-friendly regulations, two mining colleges and a large workforce trained in geology, exploration methods and mining engineering. Ghana’s largest underground mine, AngloGold Ashanti’s Obuasi mine, has been in near continuous production for more than a century and has recorded production exceeding 32 million ounces of gold. Other major mining companies operating in Ghana include Kinross Gold (Chirano Mine), Gold Fields (Tarkwa and Abosso Mines), Perseus Mining (Edikan Gold Mine) and Newmont Mining (Ahafo and Akyem) and Ghana’s newest mine the Asanko Gold Asanko (Obotan) mine. This resource-rich region still remains under explored leaving excellent potential for discovering other large deposits.
Asante Gold has a current Option and Sale agreement in place with Perseus Mining (Ghana) Ltd. for the acquisition of up to 100-percent interest in their Dunkwa/Betenase Permit in Ghana, which adjoins to the east of the Kubi Mining lease and where recent drilling of a large gold in soil anomaly has noted a significant gold discovery in heavily altered sulfidic and qtz veined sediments. The target is a +1Moz open pit gold deposit.
The company has also acquired, subject to final closing and assignment, eight prospecting licenses, two adjacent to Kubi and six along the SW extensions of the Asanko Gold Mine trend in Ghana. In addition, the company also acquired the strategically located Keyhole Gold project located at the intersection of major continental and local gold rich shear structures located 35km to the southwest of the Asanko Mine. Initial drilling at Keyhole has intersected high gold grades to 20 g/t over narrow widths proving the structure and its area are highly prospective for a major high grade shear hosted gold deposit of the Obuasi type.
The company is led by a proven management team passionately and financially committed to bringing Kubi into production. Asante Gold’s founder, President and CEO, and largest shareholder, Douglas R. MacQuarrie was formerly CEO of PMI Gold Corporation, which developed the Obotan Gold project (now the 200,000 oz/year Asanko Gold Mine). Bashir Ahmed, the company’s Vice-President of Production & Development, is a resident Ghanaian mining engineer with decades of experience including most recently as the Mine Manager at the world-class Obuasi Mine.
- Current NI 43-101 Measured + Indicated resources of 233,000 ounces gold @ 5.48 g/t; Inferred 115,000 ounces @ 5.31 g/t.– open to expansion at depth.
- Excellent mining infrastructure, experienced labor available, near the center of major Obuasi mining camp.
- 20-year renewable mining lease issued in 2008.
- Big exploration discovery potential on Keyhole and Betenase concessions, further drilling planned.
- Track record of gold discovery with large exploration upside on land package.
- Low market capitalization at $4 million with 57 million shares issued, 48 percent management and major shareholder owned.
- Independent mining research firm, Fundamental Research, in their December 2017 update report on Asante Gold estimated a fair value of $0.63 per share suggesting the market is undervaluing the assets.
Key Property: Kubi Gold Joint Venture
The Kubi Gold Mine project consists of a large 52 square-kilometer land package and is located 15 kilometers south and along strike from AngloGold Ashanti’s 66 million ounce (pre-mining resource) Obuasi Gold Mine, and 23 kilometers to the northeast of Perseus Mining’s 6.6 million ounce (pre-mining resource) Edikan Gold Mine.
Excellent mining and transportation infrastructure in the region of the Obuasi mining camp makes it the ideal location for developing Kubi into a custom 650 tpd mining milling and direct shipping/self milling operation. The proposed Kubi Gold mine is projected to produce circa 35,000 ounces of gold per year (@ 6 to 8 g/t gold) from a decline under previous pits from which AngloGold Ashanti mined 58,696 ounce gold @ 3.65g/t from surface oxide ore.
An October 2014 NI 43-101 Technical Report details an estimated US$30 million in exploration and development work at Kubi since the mid-1980s. The report includes a resource estimate showing Measured Resources of 0.66 million tonnes of @ 5.30g/t gold for 112,000 ounces gold; Indicated Resources of 0.66 million tonnes @ 5.65g/t gold for 121,000 ounces gold; and Inferred Resources of 0.67 million tonnes @ 5.31g/t gold for 115,000 ounces gold.
The technical report also highlights data from previous drilling indicating high-grade (+10g/t gold) steeply plunging gold mineralized shoots with grade increasing to depth. Future work plans to target these high grade shoots by drilling from the decline.
“The opportunity at Kubi is represented by the potential for much higher grades than currently indicated,” explained MacQuarrie. “Grade is king. Higher grade means lower per ounce production costs. High grade mines survive market downturns and pay out cash to shareholders over the entire life of the mine. High grades succeed. The philosophy at Asante Gold is to identify and develop gold projects that are high grade, small capex, near production, and close to established infrastructure.”
On financing or closing of a joint venture, work going forward will center on permitting, engineering, portal construction and driving an exploration decline to circa the -200 meter level for resource definition drilling, bulk sampling and further metallurgical testing. The objective of the planned definition drilling is to develop high grade stopes >8 g/t gold for early production.
Kubi Mining Leases Acquired
Asante Gold entered an agreement with Goknet Mining Company Ltd. in August 2016 for the acquisition of the Kubi Mining Leases on terms as detailed in the February 2015 Kubi Definitive Option Agreement. Asante will complete the acquisition of the leases by issuing seven million treasury shares and reserving 8,000 ounces of gold from future production, and a one percent Net Smelter Return royalty. Royal Gold Inc. of Denver holds a three-percent Net Proceeds of Production (net profits) royalty, and the Ghana government a statutory 10 percent free carry equity and five percent NSR royalty interest. Recent statements from the Ghana Government suggest that tax and royalty relief for small and medium sized gold producers is under consideration. Asante Gold plans to explore and develop Kubi as a custom milling and direct shipping underground operation.
Asante will also acquire interests in up to eight prospecting licenses: two totaling 38 square kilometers adjoining to the west of the Kubi Mining Leases; and six contiguous licenses totaling 270 square kilometers located on the Asankrangwa Gold Belt 15 kilometers to the southwest and along strike of the new Asanko Gold Mine. All licenses have had considerable exploration work completed and many have drill-ready targets. Goknet retains a two-percent Net Smelter Return royalty on each license acquired by Asante Gold.
“We look forward to developing Kubi as a high grade, environmentally sustainable underground mine. With a world wide rising gold price and a decreasing gold supply environment we look forward to funding its development with either debt or on a joint venture basis to minimize share dilution” said MacQuarrie. “Kubi has an excellent location and considerable grade and resource ounce upside. The addition of the southern half of Goknet’s highly prospective Ashanti II concessions to our current Keyhole and Betenase options, and our Fahiakoba concession give us exceptional discovery upside and long term growth opportunities.”
Keyhole Gold Project
Asante Gold reached an agreement with Sikasante Mining Company Ltd. in September 2016 to earn up to 100-percent interest in its Keyhole Gold project. The Keyhole area is surrounded by the company’s Ashanti II Gold project option and is strategically located at the intersection of three major regional gold mineralized trends.
Over the last 40 years, a six-kilometer stretch of the Ankobra River in the Keyhole area has been the subject of intensive local alluvial mining. The alluvial gold resources have now largely been exhausted and/or are unworkable resulting in the area being opened for acquisition for the first time since the early 1980s. Sikasante controls two contiguous licenses covering a combined area of 2.52 square kilometers.
Initial drilling at the MEM showing has outlined a shear zone over a length of 825m and to depths of 150m which is open along strike and to depth. Visible gold was noted in multiple intersections in the sulfide and quartz mineralized shear zone, with grades to 15.9g/t Au. Mineralized intersections in the central 400m long section of the shear zone averaged 9.6g/t Au over estimated average true widths of 1.2m. Given the locally high grades encountered, and the significant strike and depth potential of this shear as well as the prospect of finding numerous other mineralized shears in the MEM area and several kilometres to the north and south, management is highly encouraged to aggressively continue exploring the option.
The target is an orogenic, shear zone related, gold deposit. This type of target has the potential for substantial widths and extensive strike length and vertical plunges as at the nearby AngloGold Ashanti world class Obuasi mine.
Option and Sale Agreement for the Betenase Permit
Asante Gold entered an Option and Sale Agreement with Perseus Mining (Ghana) Ltd. to earn a 100 percent interest in their Dunkwa/Betenase Permit in Ghana which adjoins to the east of the Kubi Mining lease. The Betenase permit encompasses an area of 12 square kilometers at the intersection of a strong east-west linear structure and a strong north-south linear extending from the Obuasi gold mine.
Work conducted on the Betenase permit area outlined a strong 700-meter long gold in soil anomaly and numerous ground IP geophysical targets. Initial drilling of the gold in soil anomaly by Asante Gold intersected six intervals with gold values greater than 1.0 g/t gold, with the best intersection of 3.14 g/t gold over 4.0 meters. The mineralization is associated with pyritic quartz stringers in strongly altered Tarkwaian quartzites. Additional IP surveying and drilling is planned to commence as soon exploration funding becomes available.
Douglas R. MacQuarrie, P.Geo.BC, B.Sc.- President & CEO
A resident of Whistler, Canada, Douglas MacQuarrie has 46 years’ mineral exploration experience, including 25 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. As the former CEO of PMI Gold Corporation he oversaw the acquisition of all the PMI mineral titles including Obotan and Kubi, and was responsible for raising over $45 million for exploration and development. His team has outlined more than 11 Moz of gold resources in Ghana. MacQuarrie is a co-founder of Asante Gold Corporation; and the Managing Director of Goknet Mining Company Limited – a private Ghanaian exploration company he co-founded in the year 2000 with Ghanaian Nationals Godfried Kesse (former Director Ghana Geological Service), Thomas Ennison (LLB), and Eric Ewen (Canadian Prospector and discoverer of 5 Moz Keegan Esaase orebody).
Bashir Ahmed — Director & Vice-President, Production & Development
A resident of Obuasi, Ghana, Bashir Ahmed, a Ghanaian national, is a mining engineer with over 30 years of experience in underground mine operations, planning, production and management. This wealth of expertise gained him the position as Mine Manager at Obuasi, one of the world’s foremost underground gold mines, producing up to 1.8 million tonnes per year (~4,900 tpd). In this capacity, Ahmed managed a workforce of over 1,000 and an annual budget of US$100 million.
Florian Riedl-Riedenstein—Independent Director
A resident of Vienna, Austria, Florian Riedl-Riedenstein is a former investment banker working in both New York and Austria. He has over 35 years’ corporate experience as a Director and Officer of Canadian listed companies. Riedl-Riedenstein’s specialty is the successful introduction of Canadian resource companies to European investors. He is also a co-founder of Asante Gold Corporation and has more than 25 years’ experience in Ghana.
Philip Gibbs, B.Compt., MBA, CMA — Chief Financial Officer
A resident of Toronto, Philip Gibbs has extensive experience in the financial management of major international corporations and Canadian listed mining and mineral exploration companies. Gibbs is also CEO and Chief Financial Officer of KILO Goldmines Ltd., and CFO of Macusani Yellowcake Inc., operating in the Democratic Republic of Congo and Peru respectively. In 1998 as CFO of PMI Gold Corporation, he was responsible for co-ordinating a pre-sold US$110 million BB- rated Euro bond to fund Kubi to production, which was not marketed due to market conditions.
Alex Heath—Independent Director
Alex Heath is a graduate of the UBC/Sauder School of Business. Recent experience includes eight years with Salman Partners Inc. in their investment banking department as an analyst, Associate and VP. In that capacity, he provided equity financing and financial advisory services to corporate and individual clients including public and private equity offerings, valuations, fairness opinions, and in merger and acquisition advisory work. He was the lead banker on numerous financings and complex M&A transactions.
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