Africa offers pre-production and operating companies large areas of underexplored prospective terrain and, in many countries, established mining legislation. West Africa, in particular, has attracted many explorers, developers and producers looking to deliver competitive returns for shareholders. Notably, a number of countries on this continent have a free carried interest provision, whereby they own a share of the project. Governments are granted a 10% free-carried interest, for example, in Burkina Faso, Senegal and Mali. Here is an overview of eight mineral companies active within Africa.
Anglo Gold Ashanti
Anglo Gold Ashanti (NYSE: AU) is a major gold mining company with interests in 14 operating mines in nine countries. Last year, the company produced a total of 3.3 million oz. gold at all-in sustaining costs (AISCs) of US$992 per ounce. Continental Africa contributed 1.5 million oz. of this total with a further 419,000 oz. sourced from South Africa and additional production from South America and Australia. This year, the company plans to produce a total of 3.05 million oz. to 3.3 million oz. at AISCs of US$1,040 to US$1,100 per ounce.
The company is currently reorganizing its asset portfolio, and expects to exit this process with 11 mines in eight countries. As part of this effort, Anglo Gold is currently selling its interests in two South African operations to Harmony Gold and divesting its 41% stake in the Sadiola mine in Mali to Australia's Allied Gold. These sales are expected to generate total upfront proceeds of US$225 million.
The Geita mine in Tanzania is one of the company's flagship operations, where open pit and underground material from the Geita deposit feeds a 5.1 million tonne per year processing facility. In addition, the Obuasi underground mine in Ghana is one of two operations Anglo Gold holds in the West African country. Following a redevelopment effort of this past-producing asset, the mine poured first gold in December 2019 as part of a first phase ramp up to 2,000 tonnes per day. Anglo Gold expects this operation to churn out about 350,000 oz. to 400,000 oz. in the first ten years of operation at ASICs of US$725 to US$825 per ounce. This project is anticipated to reach steady-state production next year, as it scales up towards a run rate of 4,000 tonnes per day by year-end.
The company also holds in its African portfolio interests in the Siguiri open pits in Guinea, the Morila joint venture in Mali, and the Kibali operations in the Democratic Republic of Congo.
In South America, Anglo Gold has a 92.5% stake (7.5% is held by Fomicruz, a state-owned company) in the Cerro Vanguardia open pit and underground complex in Argentina as well as a 51% interest in the pre-production Gramalote joint venture in Colombia, where B2 Gold (TSX: BTO, NYSE: BTG) has a 49% ownership and is the manager of the project. The company also holds two operations in Minas Gerais state in Brazil.
Australian holdings include the Sunrise Dam and Tropicana operations in the goldfields of Western Australia. Wholly owned Sunrise Dam is an underground operation whereas the Tropicana joint-venture (70% Anglo Gold and 30% IGO, an Australian diversified miner) is a large open pit operation.
Anglo Gold Ashanti has a US$10.4-billion market capitalization.
B2Gold (TSX: BTO, NYSE: BTG) is a gold producer with operations in Mali, Namibia and the Philippines. This year, it expects to produce 1 million-1.1 million oz. on a company-wide basis.
The Fekola open pit in Mali is expected to drive the majority of this year's production, estimated at 590,000 oz. to 620,000 oz. at AISCs of US$555 to US$595 per ounce. The mine achieved commercial production in 2017. Last year, the company released the results of a preliminary economic assessment (PEA) on an expansion at the site, increasing throughputs to 7.5 million tonnes annually, up from 6 million tonnes a year. With an estimated capital cost of US$50 million for a processing plant expansion and US$56 million for staged additions to the mining fleet, the study forecast average annual production of over 550,000 oz. per year between 2020 and 2024, with a mine life extending into 2030. The expansion is expected to be completed in the third quarter of this year; last year, Fekola generated 455,810 ounces.
Earlier this year, B2Gold published an updated resource estimate for the project. Indicated resources stand at 110.6 million tonnes at 1.7 grams gold per tonne for a total of 6.1 million oz., with further inferred resources of 28.6 million tonnes at 1.14 grams gold. The Fekola deposit remains open with a further 41,000 metres of drilling planned for zones within the Anaconda area, 20 km from the Fekola deposit.
Also in Africa, B2Gold holds the Otjikoto open pit in Namibia, expected to generate 165,000- 175,000 oz. this year at AISCs of US$1,010 to US$1,050 per ounce.
In addition, the Masbate open pit in the Philippines, acquired through a merger with CGA Mining in 2013, is forecast to produce 200,000-210,000 oz. in 2020 at AISCs of US$965 to US$1,005 per ounce.
In July of last year, B2Gold entered into an agreement with Calibre Mining (TSXV: CXB), whereby Calibre acquired the El Limon and La Libertad gold mines as well as the Pavon gold project in Nicaragua for US$100 million. The company currently holds approximately a 34% stake in Calibre.
In addition to the producing assets, B2Gold holds a 48.3% interest (51.7% AngloGold Ashanti in the Gramalote project in Colombia, 120 km northeast of Medellin). In January, the company released the results of an updated PEA for the Gramalote Ridge deposit at the site (in the announcement, B2Gold also assumed the manager role within the JV). The updated study outlines a 14-year, 11 million tonne per year open pit. The proposed operation would produce an average of 416,600 oz. per year at AISCs of US$648 per oz., generating an after-tax net present value estimate, at a 5% discount rate, of US$671 million. Feasibility-level work is ongoing for this project, with a final study expected by year-end.
B2Gold was founded in 2007, by the team that previously led Bema Gold, prior to its acquisition by Kinross Gold (TSX: K, NYSE: KGC) in 2006 for US$3.1 billion.
B2Gold has a $7.8-billion market capitalization.
Global Atomic (TSX: GLO; US-OTC: GLATF) is focused on development of its Dasa uranium project in Niger while harnessing cash flow from its 49% stake in the Befesa zinc concentrate production facility in Turkey.
The 750-sq.-km Dasa project, located 105 km south of Arlit, features the high-grade Dasa deposit. In April, Global Atomic released the results of a PEA for Dasa. The study outlines the first phase of a larger underground mine at the site - with a 12-year life, the operation would extract the high-grade Flank zone and surrounding mineralization. It would produce an average of 4.4 million lb. of U3O8 per year at all-in sustaining costs (AISCs) of US$18.39 per lb., with an after-tax net present value estimate of US$211 million, at an 8% discount rate.
The capital cost estimate for this first phase is US$203 million. The associated mine plan involves mining of material from depths of 70 metres to 600 metres below surface, with additional inferred resources outside of the plan at depths of 400 metres to 800 metres. The deposit remains open at depth and on strike.
The next step for the company would be a completion of a final technical report (FTR), incorporating impact assessment studies underway. The FTR document is part of the country's mining permit application process. Global Atomic expects to apply for the mine permit for Dasa in the second half of this year.
Resources at Dasa stand at 26.3 million tonnes in the indicated category grading 1,752 parts per million (ppm) U3O8 for a total of 101.6 million contained lb., with additional inferred resources of 22.3 million tonnes grading 1,781 ppm U3O8 for 87.6 million pounds.
Niger has produced uranium since 1971, and is the world's fourth-largest producer of the commodity, according to the company.
In Turkey, Global Atomic holds a 49% interest in the Befesa Silvermet joint venture, which includes a 110,000-tonne-per-year electric air furnace dust kiln capable of producing 50-60 million payable lb. zinc concentrate annually from metallurgical waste.
Stephen Roman, the company's chairman, president and CEO, has a long-standing history of uranium exploration and development. He spent 25 years with Denison Mines (TSX: DML), and, in 2005, set up Global Uranium (now known as Global Atomic).
Global Atomic has a $97.4-million market capitalization.
Nexus Gold (TSXV: NXS) holds over 750 sq. km of ground within five properties in Burkina Faso. The company also owns six projects in B.C., Ontario and Newfoundland.
In Africa, the 38.8-sq.-km Bouboulou property sits within the Boromo-Goren greenstone belts and is 75 km northwest of Ouagadougou, the country's capital. This exploration permit features five known zones of gold mineralization, within three 5-km long gold trends with substantial artisanal workings; the gold-bearing Sabce shear zone bisects the Bouboulou permit.
This permit was previously held by Roxgold (TSXV: ROG), when it was known as the Bissa West holding. Reverse circulation (RC) drill intercepts from 2011 include 40 metres of 1.55 grams gold per tonne, 24 metres of 1.36 grams gold as well as 35 metres of 2.21 grams gold.
A soil grid survey at the adjoining 250-sq.-km Rakounga concession confirmed mineralization over a 9-km long gap in drilling between zones of mineralization at the two properties, suggesting over 16 km of strike for the PR gold trend, which extends from Bouboulou onto Rakounga. A 3,000-metre RC drill program at the Koaltenga target, completed in 2017, identified a 300-metre long zone of gold mineralization down to a depth of 80 metres. Drill highlights include 32 metres of 1.01 grams gold and 34 metres of 1 gram gold.
In December 2019, Nexus signed an earn-in agreement with Kruger Gold, a private company, to earn up to a 75% interest in Rakounga for cash payments totalling $1 million and development expenditures of at least $1.25 million over a five year period.
The company's wholly owned 98-sq.-km Dakouli 2 property also features artisanal mining sites. The Sabce shear zone traverses 12 km of this holding, with a secondary trend spanning 4 km in its southern section. Dakouli 2 adjoins the company's 178-sq.-km Niangouela property: drill highlights from a maiden 2,000-metre drill program completed in 2017 at Niangouela include 6.2 metres of 4 grams gold and 4.9 metres of 26.69 grams gold.
Nexus Gold has a $7.6-million market capitalization.
Orezone Gold (TSXV: ORE) holds the 150-sq.-km Bombore gold project in Burkina Faso, where construction is underway. The property is 85 km from Ouagadougou, the country's capital, and features a shallow weathered unit down to a depth of approximately 45 metres, which lies within resource pit shells extending down to a depth of about 200 metres.
Current measured and indicated resources at Bombore stand at 106.9 million tonnes of oxides grading 0.55 gram gold for a total of 1.9 million oz., with additional oxide inferred resources of 20.9 million tonnes at 0.4 gram gold. Sulphide measured and indicated resources tally 122.6 million tonnes grading 0.8 gram gold, containing a total of 3.2 million oz. gold, with further inferred resources of 32.4 million tonnes at 0.81 gram gold.
Last year, Orezone tabled an updated feasibility study for Bombore, which outlined a staged development of the project, starting with a free-digging oxide operation with carbon-in-leach extraction. In the third year of operations, a sulphide circuit would be incorporated with a separate equipment fleet mining this material utilizing drilling and blasting. The resulting 13-year open pit, producing an average of 117,760 oz. per year at AISCs of US$730 per oz., delivers an after-tax net present value of US$361 million, at a 5% discount rate, with an initial construction cost of US$153 million for the oxide phase.
In January, the company closed a $20.3-million bought deal, with proceeds intended for the first phase of a resettlement plan at Bombore (currently 95% complete), as well as detailed engineering and construction work. Orezone plans to secure binding debt commitments for the project later this year. Following closing of this financing, Resource Capital Funds holds a 19.99% stake in the company.
The Bombore deposit is hosted within a shear zone and is 11 km long by 200 metres wide. It lies within a 14-km long gold-in-soil anomaly and has been drilled down to an average depth of 120 metres. Additional resource modelling is underway to investigate high-grade plunging folds intercepted at the P17S zone; a number of such folds have been identified within the mining lease.
Orezone Gold has a $140.5-million market capitalization.
Platinum Group Metals
Platinum Group Metals (TSX: PTM, NYSE: PLG) has a 37.05% interest in the Waterberg joint venture, which holds the Waterberg palladium-platinum-gold-rhodium (4E) project on the northern limb of South Africa's Bushveld complex.
The company's joint-venture partners include Impala Platinum, with a 15% stake; JOGMEC, Japan's national oil, gas and metals corporation, with a 12.95% interest; Hanwa, a Japan-based trading company (9.75%); and Mnombo Wethu Consultants, a black economic empowerment partner (26%). Platinum Group also has a 49.9% shareholding in Mnombo, bringing its effective interest in the Waterberg joint-venture to 50.02%.
Platinum Group originally discovered this area of mineralization within the northern limb of the Bushveld Complex in November 2011. The deposit starts within 140 metres of surface and, according to the company, its geometry makes it amenable to bulk mining.
In September 2019, the company announced the results of a definitive feasibility study (DFS) for the project. The DFS outlined a large-scale mechanized mine with decline access, producing an average of 420,000 4E oz. per year in concentrate over a 45-year mine life at AISCs of US$767 per 4E ounce. It would entail the sale of a sulphide concentrate to smelters in South Africa. With an estimated peak project funding requirement of US$617 million, the after-tax net present value estimate for the project, at an 8% discount rate, came in at US$333 million using three-year trailing average metal prices.
Proven and probable reserves at Waterberg stand at 187 million tonnes grading 3.24 grams 4E for a total of 19.5 million oz. of 4E. These are within measured and indicated resources of 242 million tonnes at 3.38 grams 4E. The deposit remains open; approximately 63% of the project's resources and reserves are made up of palladium.
Platinum Group expects to receive the mining right for Waterberg in the second quarter of this year. Within 90 days of its receipt, Impala Platinum may increase its interest in the project to 50.01% for US$165 million. Impala is currently wholly funding a ZAR55 million (US$2.9 million) engineering, design and simulation work program at Waterberg.
Decline development is anticipated to start by January 2021, with Platinum Group forecasting production at the project by the first quarter of 2024.
Platinum Group Metals has a $129-million market capitalization.
Roxgold (TSX: ROXG) is an Africa-focused gold producer, developer and explorer with assets in Burkina Faso and Cote d'Ivoire.
The company's 1,400-tonne-per-day Yaramoko mine complex in Burkina Faso, 200 km southwest of Ouagadougou, is expected to produce a total of 120,000-130,000 oz. of gold this year at AISCs of US$930-$990 per ounce. In the two following years, this site is expected to generate similar production at lower AISCs, in the range of US$750-$850 per ounce.
Despite the COVID-19 pandemic, Roxgold's operations have been unaffected, and it has continued mining at Yaramoko with additional precautions and contingency plans in place.
In April, the company published the results of a PEA on the Sgula gold project in Cote d'Ivoire. The study outlines an open pit operation targeting the Antenna, Ancien, Agouti and Boulder deposits, which would feed a central processing facility at the site. This proposed operation would produce an average of 103,000 oz. per year over an 8-year mine life at AISCs of US$749 per ounce. Due to the high-grade nature of the Ancien deposit, in the first three years, this operation would produce 143,000 oz. per year at AISCs of US$600 per ounce.
The project has an initial capital outlay of US$142 million, with an after-tax net present value estimate, at a 5% discount rate, of US$268 million and a 66% internal rate of return, based on a base case gold price assumption of US$1,450 per ounce. A feasibility study for the asset is now underway, with results expected early next year.
Drilling at the Sgula project also continues to return high-grade intersections. Shortly after the PEA release, the company reported drill results from the Ancien, Agouti and Boulder areas. Drill highlights include 10 metres of 59.4 grams gold per tonne and 12 metres of 13.8 grams gold from Ancien, 11 metres of 8.2 grams gold from Agouti, as well as 6 metres of 8.8 grams gold from Boulder.
Roxgold has indicated that it expects to see further resource growth within the existing deposits, which would be incorporated in the upcoming feasibility. There are a further 21 untested targets identified within the Sgula holdings, which cover 363 square kilometres.
Roxgold acquired the Sgula project in April of 2019 for US$20 million.
On the earlier-stage exploration front, Roxgold announced a new high-grade discovery at the Boussoura project in February. The site is located in Burkina Faso, 180 km south of Yaramoko. The company has drilled over 40 holes at the project, yielding high-grade mineralization over narrow to medium widths, which, according to the company, is characteristic of gold projects within the Hounde gold belt.
Roxgold has a $479.3-million market capitalization.
Teranga Gold (TSX: TGZ) is a gold producer focused on West Africa. Its flagship Sabodala gold mine is the largest gold mine in the country. Last year, the operation generated 241,276 oz. gold. The company expects the operation to churn out 215,000 oz. this year at AISCs of US$900-$975 per ounce.
Sabodala is near Senegal's border with Mali and 650 km east of Dakar, with multiple deposits feeding a central mill. Sabodala has a 12-year life as a standalone operation. Teranga owns 90% of the mine and the government of Senegal has a 10% free-carried interest.
In February, Teranga announced it is acquiring the Massawa gold project, 30 km from Sabodala, from Barrick Gold (TSX: ABX; NYSE: GOLD). The acquisition closed in March.
Massawa is one of the highest grade undeveloped open-pit projects in Africa and, according to the company, provides opportunities for capital and operating costs synergies with Sabodala. Early integration work is ongoing with plans to start mining and processing the free-milling Massawa material in the third quarter of 2020. Also in the third quater, Teranga expects to publish the results of a pre-feasibility study on an optimized and integrated mine plan for the two operations.
Massawa's historic mineral reserves stand at 20.9 million tonnes grading 3.94 grams gold per tonne for 2.6 million oz. gold.
In November 2019, the company announced commercial production at its second gold mine, Wahgnion, in southwestern Burkina Faso, 510 km southwest of Ouagadougou. This year, this site is expected to produce 130,000 oz. to 140,000 oz. at AISCs of US$850-$950 per ounce. Wahgnion has an expected mine life of 13 years.
In addition, the company has exploration programs underway in Senegal, Burkina Faso and Cote d'Ivoire. Its Golden Hill project in Burkina Faso has 6.4 million indicated tonnes grading 2.02 grams gold per tonne for 415,000 oz. contained gold and 11.95 million inferred tonnes averaging 1.68 grams gold per tonne for 644,000 inferred ounces. Work is underway to expand this resource base.
Thus far, amid the COVID-19 pandemic, the company's mines have continued producing as expected with precautions in place.
Teranga Gold has a $1.7-billion market capitalization.