Asante Gold Corp (CVE:ASE) completed a C$1.25 mln fundraising early in January 2017, ahead of a larger C$19.5 mln financing package which has been put back to February while the government of Ghana shuffles the decks at various ministries, including the ministry of mines.
The plan is to spend the C$1.25 mln mainly on exploration on its Ghana properties. A 1,200 metre drilling programme commenced at the company’s Keyhole Option in mid-January.
But the main event will be the commencement of construction at the Kubi gold mine, which is slated for the next few months, once the financing has closed.
Joint venture deal provides solid support for mine development
The C$19.5 mln proposed 50:50 joint venture with BXC Company Ghana should be able to complete an exploration decline within a 12-to-18 month timeline once construction begins, while resource definition drilling, final mine planning, permitting and surface works takes place.
Once the joint venture deal completes, BXC will own a 30% stake in Asante, and will be able to help with further funding needs, if required. An example of this is already evident in the raise carried out early in January, so clearly this is a strong relationship.
Kubi located in prolific area
Kubi is located in close proximity to the world-famous Obuasi mine, which has produced over 66 mln ounces of gold in its time. At the moment, Kubi isn’t quite reaching to those heights but it’s high grade and open at depth. Initial mining targets will focus on areas grading higher than 8 grams per tonne gold, as already identified.
Other exploration properties provide additional upside
In addition to the Keyhole Option property currently being drilled, Asante also has the Betanase property which it acquired under option from Perseus (ASX:PRU). Betenase covers 12 square kilometres of ground northeast of Kubi and already boasts a small resource. The company also holds the Fahiakoba project, which lies on major structural trends between Perseus’s Edikan mine and Obuasi.
2017 will be a spectacular year, according to Doug MacQuarrie
“I think 2017 is going to be a spectacular year,” says chief executive Doug MacQuarrie. “There’s going to be huge volatility in foreign exchange markets and in world trade precipitate by Mr Trump and this should fuel the next bull market in gold. We’re looking forward to a strong gold market and building a new mine at Kubi. We’ve only got about 12 months till cash flow from that comes in.”
And there could be other activity on the cards too. “The change in government is a huge plus in Ghana,” continues MacQuarrie. A lot of exploration money went to surrounding companies like Cote D’Ivoire and Burkina Faso. I think this will be a huge change of direction with Ghana getting back on the West African radar and we have an advantage because we’re already on the ground.”