# West Africa and Gold



## alanjohnson (9 December 2011)

West Africa is continuously referred to as a “hotspot” for gold mining these days. I am looking to pick up shares in a company that will take off, someone has suggested Volta Mining. Any thoughts?


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## Sean K (9 December 2011)

alanjohnson said:


> West Africa is continuously referred to as a “hotspot” for gold mining these days. I am looking to pick up shares in a company that will take off, someone has suggested Volta Mining. Any thoughts?



Maybe this should be in a Volta Mining thread? Plenty of other West Africans to look at, maybe some type of spreadsheet with their market caps and ounces in the ground would be useful to compare them all. I personally have been following PRU, GRY and AZM for some time but they seem to be pretty fairly priced now. I rate PRU the highest probability for M&A action due to their reserves and prospects for further discovery.


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## Jacquelyn (11 January 2012)

kennas said:


> Maybe this should be in a Volta Mining thread? Plenty of other West Africans to look at, maybe some type of spreadsheet with their market caps and ounces in the ground would be useful to compare them all. I personally have been following PRU, GRY and AZM for some time but they seem to be pretty fairly priced now. I rate PRU the highest probability for M&A action due to their reserves and prospects for further discovery.




I will check those ones out. Why are those your favourties above others?


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## awg (11 January 2012)

Jacquelyn said:


> I will check those ones out. Why are those your favourties above others?




There is a lot to like about PRU.

* has just started nameplate production, see announcements
* management announcements and timelines get met
* ongoing upgrades 
* ok costs
* relative large size market cap
* projected outputs

disclosure: I hold,  2nd disclosure: Sovereign risk should be assessed closely for each stock


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## Sean K (11 January 2012)

Jacquelyn said:


> I will check those ones out. Why are those your favourties above others?



Out of the 20 or so I looked at in West A I thought these were the best. Many reasons why that vary from locations, management, nearology, reporting quality, drill results, responses from GMs, ...

Must add, they were my favourites about 3-4 years ago and I haven't looked much further since. Sold up and not holding anything.


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## drillinto (13 January 2012)

January 11, 2012
Perseus Moves One Step Closer To Its 400,000 Ounce Per Year Production Target, As Output From Edikan Ramps Up
By Our Man in Oz  >>  www.minesite.com/aus.html (free registration)


Every mother takes care when tipping out her baby’s bathwater in case the baby goes out as well. The same lesson applies to mining shares because in the second half of last year a few panicky investors emptied out portfolios which included shares in Australian-listed Perseus Mining. And they are now deeply regretting their bathwater exercise, following positive news flow from the company’s gold projects in West Africa. 

Plant at Edikan
The latest instalment in the Perseus story was delivered this week when the company declared the start of commercial production at its Edikan gold mine in Ghana. Formal as the statement might have been, given that the mine actually started pouring gold last year, it did serve to confirm gold-producer status on Perseus, a new status that has helped the company strongly outperform the rest of the Australian gold sector.

Over the past few weeks, as the gold price has steadily reclaimed ground that was lost in the second half of 2011, Perseus has been rocketing along. Indeed, some investors are now able to claim a 25 per cent gain over just nine trading days. Impressive as that sounds the trading period does include the Christmas and New Year breaks, and the percentage rise is between the company’s recent share price low of A$2.33 set on December 29th (bathwater day!) and the recent high of A$2.92 reached on Wednesday.

A more realistic measure of Perseus as a stock market performer is the rise the shares have enjoyed since the start of 2012 trading. The shares have risen by A42 cents since January 3rd to the current A$2.88. That’s still a gain of 17 per cent over a matter of days, and compares favourably with the nine per cent rise on that ASX gold index out in, and a mere 3.3 per cent in the price of gold over the same period.

What’s driving Perseus is a realisation that the company has moved beyond its status as an emerging gold producer with its foot on a suite of promising projects and prospects in West Africa and has now become a company which is delivering everything it promised.

It has built its Edikan project on time and on budget. It is taking big steps towards developing a second gold mine, at Sissingue in Ivory Coast, and it is exploring for a third mine. In the process, it has boosted its global gold resource to 6.7 million ounces, a number which will surely be attracting the attention of global gold majors.

The resource upgrade at Edikan which the company put out in late December, added the best part of one million ounces to the project’s resource base, but only represented a glimpse of the future, because not all the company’s recent holes were included in the calculation because assay laboratories were unable to handle the volume of work.

Perseus managing director, Mark Calderwood, said at the time that the results of a further 50 drill holes had yet to be included in the most recent calculation at Edikan which saw the project’s resource rise to 143.9 million tonnes of ore containing 5.3 million ounces of gold.

“The company continues its excellent track record of growing its measured and indicated resources organically at an average of 1.4 million ounces per annum over the past four years, and a strong upgrade potential remains”, Mark said. “The company plans to ramp up exploration drilling on a number of new targets at Edikan and elsewhere in Ghana and Ivory Coast during 2012.”

On the declaration of commercial production, Mark said the December quarter had delivered an excellent result, given that the company was still commissioning the ore-processing mill. “We will be in a position to give production guidance when our December quarter and half-year financial reports are finalised towards the middle of next month [February],” he said. Mark added that the focus now would be to shake out any bugs in the Edikan plant and ramp up production to the first year target of 227,000 ounces of gold, and then up to 290,000 ounces thereafter. Cash costs for year one should come in at around US$581 per ounce, but will then fall to around US$535 per ounce in future years.

Interesting as the news is from Edikan the future Perseus share price driver is more likely to be the exploration and development action at the Sissingue discovery, part of the wider Tengrela project. Pre-construction activity has started at Sissingue, and contracts have already been awarded for long-lead time equipment, such as the mill.

First production is expected in the second quarter of next year, and that will move Perseus considerably closer to its target of becoming a 400,000 ounce per year gold producer A third mine is yet to emerge from the company’s exploration department, but given what has been achieved over the past two years it’s likely only to be a matter of time. 

****************


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## drillinto (1 April 2012)

Uncertainty Surrounds Gold Companies In Mali After Government Coup

http://www.kitco.com/reports/KitcoNews20120329AL_mali.html
***


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## drillinto (2 April 2012)

drillinto said:


> Uncertainty Surrounds Gold Companies In Mali After Government Coup
> 
> http://www.kitco.com/reports/KitcoNews20120329AL_mali.html
> ***




Stick to OZ gold mines !


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## AlanGreenspan (4 April 2012)

My father works for resolute group as a mining engineer (RSG) based in syama, mali. Their down at the moment, but results have been relatively upward since 2009. 

A lot of aussie companies over there though, and gold APLENTY


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## drillinto (4 April 2012)

AlanGreenspan said:


> My father works for resolute group as a mining engineer (RSG) based in syama, mali. Their down at the moment, but results have been relatively upward since 2009.
> 
> A lot of aussie companies over there though, and gold APLENTY




France warns its nationals to leave Mali
http://www.telegraph.co.uk/news/wor...ns-nationals-to-leave-as-rebels-take-Timbuktu


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## drillinto (4 April 2012)

AlanGreenspan said:


> My father works for resolute group as a mining engineer (RSG) based in syama, mali. Their down at the moment, but results have been relatively upward since 2009.
> 
> A lot of aussie companies over there though, and gold APLENTY





OZ Government Advice >> http://www.smartraveller.gov.au/zw-cgi/view/Advice/Mali


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## drillinto (17 May 2012)

May 16, 2012
Perseus Pleases The Market By Under-Promising And Over-Delivering
By Our Man in Oz

If there were any doubts left about the potential for Perseus Mining to become one of the world’s leading gold producers they were washed away when the company smashed its gold-cost guidance figure for the March quarter by a surprise US$227 an ounce. 

For investors hardened by mining companies making excuses about why cost forecasts have been exceeded, the Perseus result was a breath of fresh air. Instead of producing gold at a projected US$950 an ounce in the first three months of year from the company’s flagship Edikan mine in Ghana, the cash cost came in at US$723 per ounce. And that was just the second quarter of full production from the project. Even better results are expected in future quarters, as Edikan settles down to a long-run cash cost of around US$535 per ounce which, even after the latest gold price correction, leaves Perseus with a gross margin at above the magic US$1,000 per ounce mark.

The company’s management, naturally, is pleased with the March quarter result, especially as it implies that the bugs are being rapidly shaken out of  a mine and processing plant which produced its first gold as recently as August 21st. Just eight months after the big day, Perseus chief executive Mark Calderwood was able to tell analysts at his post-report briefing that the mine and plant were settling down well, and that the first year production ramp up target of 227,000 ounces is in sight. Thereafter the plan is to boost production to 290,000 ounces a year.

Mark attributed the better-than-expected result in the first three months of 2012 to a strong performance by the company’s processing mill. The mill produced 38,796 ounces of gold during the period, with almost half of that coming in the month of March alone, when 19,026 ounces was produced. The March monthly output figure, which was at a cost of US$576 ounce, is a factor in the guidance Perseus has subsequently given. In the June quarter, the company says, output is likely to rise to between 50,000 and 55,000 ounces, at a cost of US$690 per ounce. Not that anyone should be surprised if those numbers are surpassed, given some of the comments made by Mark when asked about the grades in the Edikan mine.

He was asked if he was concerned about a small decline in gold grades in the pit for the June quarter. “If you look at the March numbers we averaged [a head grade] of 1.4 grams a tonne, and I’m not sure we can keep it below 1.4 gram per tonne”, he said. “We were targeting 1.4 grams per tonne, but I was in the pit two days ago and I’d say the grade is not changing dramatically. So, the 1.27 gram per tonne original guidance for the half year is probably too low. Therefore, I see the current guidance as quite comfortable, both in terms of ounces and cost per ounce.” In other words, Perseus is enjoying a grade bonus just when it needs it, in the early months of mining. It’s also accelerating the rate of mining, putting more tonnes through its mill.

On the market, Perseus has survived relatively unscathed in amongst the wider gold price-related correction. While most of its competitors are down by around 10 per cent on their prices of a month ago, Perseus is actually up. Sure, it’s been a bumpy ride – in the early weeks of May the shares peaked at A$2.68, then plunged to A$2.19 as the latest doubts about the solvency of Greece rattled markets, and then rebounded to around A$2.36, an eye-catching A12 cents a share ahead of where the price was a month earlier.

What the market likes is the way in which Perseus is under-promising and over-delivering, something taught to all novice managers, and then all-too-often forgotten. Edikan is now embarking on a series of rolling expansions as more equipment is brought to bear in the pits and the processing plant is cranked up to full production. And the performance of Edikan is also being seen as a guide to what the company is capable of doing at its next project, Tengrela in neighbouring Ivory Coast, which includes the Sissingue mine.

Mark gave little away about the start date for the second mine, though he remains confident that by the final quarter of next year commissioning of the mine and plant will be underway at Sissingue. Permitting and other government approvals are advanced, he said. The major item of equipment, a semi-autogenous (SAG) mill has been ordered, and the engineering design set for a 14-month building programme. “Obviously, we can’t control the government [for approvals], but in the meantime we are using any spare time to make sure the design is finished and tendering has started”, he said.

The Sissingue mine, with a capital development cost estimate of US$115 million, has a production target of 340,000 ounces of gold in its first two years of operation at an estimated cost of US$421 per ounce. “In this quarter we should be in a position to start sending out tenders for fabrication and construction”, said Mark. “We’re happily working away, using free time, there’s a bit of fat built into the dates. Having ordered the SAG mill, that’s a particularly long lead-time item, we’ll start looking at other long-lead items if the time lines come up before government permitting.”

In the year ahead the major catalysts for Perseus should be news flow from the production ramp-up at Edikan, government clearance to proceed with Sissingue, and exploration results. The first of those, production at Edikan, appears to be well under control, with Mark undoubtedly keen to win more praise from the investment community for his ability to over-deliver. Sissingue will be a work in progress until the government sign-off is obtained. Exploration news could be the wild card as work around Edikan steps up a gear, and given that six rigs are currently active at Sissingue aiming to add years to what currently looks like being a relatively short-life mine.

Goldman Sachs, which has a 12-month price target on the shares of A$2.80, has told clients that Perseus is set to post pre-tax and depreciation earnings of A$197 million in the next financial year, the first full year of Edikan production, and that that should rise to A$274 million in 2014. The March quarter production result, said Goldman, “was better than our forecasts, which leads to earnings upgrades through the forecast period. We have subsequently lifted our discount cash flow (DCF) and price-earnings (PE) based 12-month price taget to A$2.80, from A$2.70”.

Source >> www.minesite.com


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## Sean K (9 August 2012)

With increased tensions all around W Africa, the current batch of Aussie goldies around there could be going anywhere. 

http://edition.cnn.com/2012/08/06/world/africa/ivory-coast-violence/index.html?hpt=iaf_c2


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## mr. jeff (9 August 2012)

PRU looks very good by those details provided. Aiming for ~$540/oz costs and 290kOz per year adds up to a very profitable operation. At a 1B market cap, compare PRU with EVN (1.1 B, 347 kOz, 770 $/Oz costs) and AQG (1.8 B, 400 kOz, 650$/Oz costs).

Actually they all look like good value to me at the moment, and as it is said, the West African stories just don't get the excitement that they used too, why take on the sovereign risk when safer stocks have come back to attractive levels ?


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## Sean K (9 August 2012)

mr. jeff said:


> PRU looks very good by those details provided. Aiming for ~$540/oz costs and 290kOz per year adds up to a very profitable operation. At a 1B market cap, compare PRU with EVN (1.1 B, 347 kOz, 770 $/Oz costs) and AQG (1.8 B, 400 kOz, 650$/Oz costs).
> 
> Actually they all look like good value to me at the moment, and as it is said, the West African stories just don't get the excitement that they used too, why take on the sovereign risk when safer stocks have come back to attractive levels ?



Double the multiples if there is some certainty in the power struggles. 

Maybe there will be a turning point soon, but I can't see it. 

It's probably only going to get worse with the overpopulation, poor governance, lack of decisive power, unemployment, and bored youth!


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## Sean K (9 August 2012)

kennas said:


> It's probably only going to get worse with the overpopulation, poor governance, lack of decisive power, unemployment, and bored youth!



And another global food shock just around the corner.

http://www.bbc.co.uk/news/business-19193390

Maybe that is the biggest risk to peace in W Africa.

And the world.


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## burglar (9 August 2012)

kennas said:


> And another global food shock just around the corner.
> 
> http://www.bbc.co.uk/news/business-19193390
> 
> ...





And here in pictures:

http://www.bbc.co.uk/news/world-africa-17539768

Hard to be contented when the belly is empty!


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## Sean K (9 August 2012)

burglar said:


> And here in pictures:
> 
> http://www.bbc.co.uk/news/world-africa-17539768
> 
> Hard to be contented when the belly is empty!



While this will continue to shake up Africa and the world, what's it do for investing in Africa and the POG? 

Civil wars
No governments
Land forcibly removed

At very best, uncertainty over royalties and taxes.


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## drillinto (21 February 2013)

February 20, 2013
Azumah Is Now Bringing Critical Mass To The Wa Gold Project In Ghana
By Our Man in Oz

For most of the 7,500 delegates at the annual Mining Indaba conference in Cape Town earlier this month Stephen Stone was just another face in the crowd. 

But for Minesite’s Man in Oz a chance encounter with Stephen on the sidelines of the event was an opportunity to try and wheedle out an update on the Wa gold project in Ghana that is being developed by the company he runs, Azumah Resources.

Unfortunately, Stephen has been around long enough to know that everything important that needs to be said has to be filed first with corporate regulators so all that could be gleaned from a brief chat was a measure of his mood.

And on that test it was pleasing to note that the Azumah chief executive is optimistic.

“We’re making good progress,” Stephen said. “There are a number of major decisions to be made in the next few months so I guess we’re in the watch-this-space category”.

What investors will watch for most carefully will be news about exploration success, and a promised reserve and resource increase at Wa. Both seem likely to be forthcoming because Azumah has a solid track record of success with its drilling.

And the resource and reserve increase should have a positive effect on a refreshed feasibility study that could see the company opt for a bigger process plant, lifting current thinking about ore throughput from one million tonnes a year to 1.5 million tonnes with a corresponding boost to gold production to around 100,000 ounces a year.

In the background to the impending newsflow from Wa is the potential for corporate activity, with Azumah sitting on a tantalising 17 per cent stake in its neighbour, Castle Minerals, which has outlined a handy, but not yet significant, inferred resource of 163,500 ounces of gold. Castle’s tenements cover part of the same Birimian greenstone that hosts most of the gold West Africa.

“Last year was one of solid growth for Azumah”, Stephen said in his presentation at Mining Indaba. “We increased our global mineral resources by 44 per cent, delivered a maiden mineral reserve and complete a feasibility study.”

The problem, which Minesite reported last year, was that the gold in the ground was not quite enough for Azumah to say that it was ready to go mining. “We need a few more ounces” was the prophetic headline on a slide used by management to explain what had been achieved and what will come next for the Wa project and its multiple orebodies.

The next phase of work at Wa will include more drilling to build on the resource update reported in mid-January. That will lead to a reserve update and refreshed feasibility study in the second quarter, to be followed by financing negotiations and a possible development decision in the third quarter of the year.

Stephen is confident that Azumah is on the right track after last year’s setback when the first feasibility study showed that the company needed more gold to make a development decision. Since then the resource at Wa has been increased to 1.36 million ounces in the measured and indicated category with another 849,000 ounces inferred, with the average ore grade lifted from 1.6 grams a tonne to 1.78 grams.

So far, all the studies show no impediments to proceeding with a mine development at Wa. Financial analysis demonstrates robust operating margins with free cash flow of around US$40 million a year from a project with a current estimated capital cost of US$144 million, serviced by excellent infrastructure.

Analysts who travelled to northern Ghana earlier this month came away impressed with what they saw, though there was a view that additional exploration will deliver the benefit of boosting the resource position and cutting project risk. That sentiment prompted one report to note that “exploration is the main game going forward” for Azumah.

Argonaut Securities told clients that Azumah is one of the cheapest exploration plays listed on the ASX, with an enterprise value to resource ounces of just US$13 compared to a peer average of US$45.

In a reported headed “to mine or not to mine” Argonaut discussed the merits of moving ahead quickly with a mine decision versus continuing to explore what is widely-regarded as some of the best exploration ground in the region.

“Following a modest feasibility study and maiden reserve in August, Azumah has repositioned itself and re-defined its strategy,” the broker said. “The company’s new focus on exploration and growing resources and reserves is already paying dividends. The upgraded resource will almost certainly have a positive impact on the economics of the project, specifically scale and cash costs.”

Argonaut’s analysts acknowledged that the economic case for a mine at Wa had been demonstrated in the original feasibility study, but noted that a decision to mine would add several layers of risk.

“The modest reserve base (currently 430,000 ounces for a six year mine life) could place the mine plan under pressure quickly,” Argonaut said. “Spinning this 180 degrees, Azumah could build a mine that is too small given the probability of further economic discoveries.

“With only 10 per cent of the 3,100 square kilometre tenement effectively explored, regional exploration potential should offer themost upside for the stock.”

Source >> www.minesite.com


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## Sean K (25 January 2022)

Was trying to find a West African Coups thread and this is as close as I could find.

This time, it's Burkina Faso. Not sure who is mining gold there.

Mutinous soldiers announce overthrow of Burkina Faso president​


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## Sean K (25 January 2022)

Ah, of course, WAF


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