Another encouraging year for mining in West Africa

Investors and miners are increasingly comfortable mining gold in West Africa beyond the traditional mining regions.

IMAGE: Roxgold

West Africa has been at the heart of the African transformation. Over the past decade, this region has achieved remarkable economic growth, outperforming other regions in the continent and emerging as a darling for investors worldwide. Although growth has gradually slowed, West Africa houses some of the continent’s stellar economic performers, namely Ivory Coast, Senegal and Burkina Faso, while being home to Africa’s largest economy and most populous country, Nigeria. Sound macroeconomic policies, ameliorating political conditions and major infrastructure developments have contributed to noteworthy investments in the mining sector of West Africa. From Ghana’s world-renowned gold deposits to Burkina Faso’s unexplored wealth, West Africa will certainly host some of the most attractive projects for the industry across the continent.

Burkina Faso is experiencing a boom in its mining industry. Land-locked but endowed with immense mineral wealth, this country has quietly emerged as one of the preferred destinations for mining investors. Although falling behind gold-producing giants like South Africa, Ghana and Mali, Burkina Faso has the highest number of new gold projects in the continent, and the export accounts for nearly 80% of its income. In early 2017, Endeavour Mining confirmed it had added over 260,000 oz. to the proven resource at its Karma gold mine, thereby extending its mine life to more than 10 years. Moreover, the company commenced production ahead of schedule at its Houndé project which expects average annual production of 190 000 oz over an initial 10 year mine life and will employ around 470 people, of which 90% will be Burkinabe nationals. These developments are welcome in a largely undeveloped and poor country. Meanwhile, major gold producer IAMGOLD has announced the installation of a 15 megawatt solar power plant at its Essakane mine, which will become one of the largest hybrid diesel solar photovoltaic projects in the world. The upcoming years look very promising for Burkina Faso, with companies like Centamin, Orezone, Roxgold and Semafo heavily invested in the country and eyeing near-term development or production.

With an estimated 822 tons of gold reserves, Mali remains a hotspot for gold mining companies worldwide. Largely due to developments from Randgold’s Loulo-Gounkoto complex and the Morila mine, the country has managed to increase its reserves significantly in the past few years. While current projections put 2017’s output at 45 tonnes this year, behind the 46.9 tonnes produced in 2016, new mines coming online by 2018 could help the country to beat current forecasts. Although the security situation in the north of the country has overshadowed developments in the industry, Mali’s mining sector has ultimately experienced a very eventful year. In October, B2Gold poured first gold at its new Fekola mine in the southwest region and expects to produce around 50,000 to 55,000 ounces by 2017’s end and between 400,000 to 410,000 ounces in 2018. Hummingbird Resources expects to commence production at its Yanfolila projects in the fourth quarter of 2017, and other large-scale mining companies operating in Mali include the likes of Anglogold Ashanti, Randgold, Resolute, Endeavour, and IAMGOLD.

Well-established mining jurisdictions such as Ghana have upgraded efforts to reap the benefits of increased investment flows to the region. The new administration of President Nana Akufo-Addo has reiterated commitment to boost the sector following a largely stagnant environment over the past four years by tackling illegal mining and streamlining permitting processes. Speaking about investment opportunities in West Africa, Michael White, president and CEO at IBK Capital, a Toronto-based firm, said: “IBK has always enjoyed Ghana as a mining jurisdiction since the country is deeply rooted in the rule of law and has been fairly stable for decades. Additionally, substantial infrastructure has been built up in Ghana over the past 20 years, evidencing the country’s rapid evolution. It is great to see that the government is creating access for these projects and investing in the mining sector in general.”

While Ghana remains a strong favorite of investors, Senegal, Guinea, and Ivory Coast are the newest players to create considerable hype in an already-buzzing West Africa. White added: “Guinea is also a country in which we have been comfortable investing as it has a long history of uninterrupted bauxite supply through an established rail line and port system.” In Senegal, several explorers and developers such as Bassari Resources are gearing up to begin production. The ASX-listed gold developer is slated to begin awarding contracts for its Makabiungui gold project with the objective of delivering its first high grade ore to the processors by mid-2018. Senegal expects to produce between 205,000 and 225,000 ounces of gold in 2017, and phosphate production for the year could be as high as 2,000,000 tonnes. Notwithstanding these positive developments across the region, Ivory Coast is one of Africa’s fastest growing economies with a growth rate of roughly 8% in 2016, and thus remains a focal point of international interest amongst the mining community. In MACIG 2018, we profile this exciting new gold jurisdiction in-depth alongside several other West African nations, and look forward to updating our readers with a comprehensive overview of the market’s potential.

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