The unexplored is always attractive. In the case of Ashanti Gold (CVE:AGZ), it’s also a path that has the potential to pave the way to future riches.
The firm, currently operating in West Africa, is a gold-focused, exploration and development company with projects in both Mali and Ghana. Its aim is to benefit from an emerging trend in the gold industry, as majors continue to increase their focus and capital spend in West Africa.
The problem? There’s a dearth of gold projects in the region needed to maintain status quo, let alone production growth. Ashanti is working to help fill that gap.
READ: Ashanti Gold set to exercise earn-in option at Anumso
In Mali, the company is driving forward its 100%-owned Kossanto East project in Mali on the prolific Kenieba belt.
“We are smack in the middle of gold country. The Kedougou-Kenieba inlier shear zone is home to 40 million ounces that’s been discovered and put into production over the last 20 years,” says CEO Tim McCutcheon when talking about the area where Ashanti’s Mali gold project lies.
“There’s nothing else like it on the planet.”
Additionally, in Ghana, Ashanti owns a land package adjacent to one of Africa’s largest gold mines: the Newmont Akyem mine.
The Mali project: Kossanto East lies on rich gold belt
Located along the Mali-Senegal border in West Africa, nestled in the West Mali gold belt, Ashanti’s flagship Kossanto East project lies near the intersection of two major shear zones.
It’s a 66.41 sq/km concession in the Kedougou-Kenieba Inlier the northwestern-most exposure of birimian rocks in West Africa, and host to the Loulo and Sadiola group of world-class gold deposits. The 100%-owned project is close to other major gold deposits in the region owned by Randgold Resources (LON:RRS), IAMGold (TSE:IMG), AngloGold Ashanti (NYSE:AU) and Teranga Gold (TSE:TGZ).
The Kossanto East property hosts two historically drill-tested targets: Gourbassi East and Gourbassi West.
“Previous explorers showed several surface anomalies identified in historic surface samples, rotary airblast (RAB) and reverse circulation (RC) drill holes. We have followed up on the initial data and our drill results have been very impressive,” says McCutcheon.
Mali is relatively untapped
Mali is the third-largest gold producer in Africa -- yet a relatively untapped nation. According to Mali’s department of mines and geology, industrial gold production in Mali rose to 49.6 tons in 2017, up 5% from 2016. Gold (followed by cotton) is Mali’s top export, making a significant contribution to the country’s economy.
Mali has plenty of runway for growth when it comes to gold operations, as only six of the country’s 133 potentially gold-rich regions have been mapped out to date, according to data released in 2017.
Ashanti’s 105-hole reverse circulation, 12,000-metre drill program at Kossanto East was completed this summer.
Results from the drill program have been promising: mineralization results at holes in the Gourbassi East main zone showed multi-metre, multi-gram intercepts with local high-grade zones. The target consists of gold mineralization along a northwest trending structural zone for over 900m of strike length.
WATCH: Ashanti provides encouraging results from Gourbassi West Project in Mali
Drill results from the Gourbassi West area of the project were also encouraging, showing the potential to expand the mineralized area.
The target consists of gold mineralization associated with silicified, brecciated felsic volcanic rocks along a northwest trending structural zone for over 1,200m of strike length.
Highlight assays from Gourbassi East and West included 43m (meters) at 2.86 g/t (grams per ton) gold, 34m at 1.80 g/t of the yellow metal in another hole, and 48m at 1.34 g/t gold in another.
Ghana also has strong potential
Ashanti also has a significant footprint in Ghana, with two areas of focus. At its Anumso project, a four-hole drill program will test soil sample anomalies to the north of the historical resource estimate.
The project is a 29.63 sq/km mining lease within two blocks that cover approximately 13 km of strike length in the Tarkwaian Banket strata within Ghana’s productive Ashanti belt.
In 2017, the company completed a 2,000m drill program and plans to conduct trenching and drill in 2019 with an aim to demonstrate that gold mineralization extends beyond the area of the historical resource.
McCutcheon says Anumso could have the scale to be a stand-alone project but its main attraction is to be a source of feedstock for neighbouring operations. Ashanti, with its partner on the project, Goldplat plc (LON:GDP), are in the process of working on a development plan to advance the Anumso project.
In October, Ashanti decided to exercise its earn-in option for 51% of the Anumso gold project in Ghana, signalling the firm’s confidence in the project.
Ashanti is also active at its Ashanti belt project in Ghana, which has shown attractive preliminary results and sits adjacent to the Newmont Akyem mine, which is nearing the end of its mine life.
From an operational standpoint, there are significant geology and infrastructure synergies, of which Ashanti can take advantage. Additionally, the firm has attractive earn-in terms from Kinross Gold, meaning Ashanti can earn 100% interest if it spends US$1 million on exploration over two years.
Ashanti team has significant experience
McCutcheon brings a solid grounding of experience to Ashanti Gold: he’s had more than two decades of international business experience, leading several mining development companies with assets in Russia, Kyrgyzstan, Slovakia and West Africa.
Before he moved into mining, McCutcheon worked for a variety of financial firms: Bear Stearns, Aton Capital and Pioneer Investments. He was a founder/partner of DBM Capital Partners Ltd, a metals finance institution.
Chief Operating Officer and Chief Geologist Paul Klipfel also has a wealth of experience under his belt: 35 years of gold exploration leadership and project development in North America, South America, Australia, South Pacific, Africa, and Asia working for major and junior explorers.
Future is promising
2019 looks to be a promising year for Ashanti, with further progress on its Kossanto East project in Mali expected. The firm also plans to advance, together with its earn-in partners, the Anumso project and the Ashanti belt project in Ghana.