Asanko Gold Mine, situated in Ghana, one of the top ten gold producing countries, is Asanko Gold’s flagship project. The mine, with proven and probable reserves of 4.8 million ounces, is planned to be developed in two phases.
Construction on the phase 1 development of the project started in August 2014. It is expected to produce 200,000oz of gold annually from the second quarter of 2016 over its estimated mine life of 11.5 years.
A scoping study for the phase 2 of the project to extract the nearby Esaase deposit was underway as of September 2014. Phase 2 has potential to expand the mine’s gold output to 400,000oz per year.
Geology and reserves
Phase 1 of Asanko gold mine development consists of Nkran, Abore, Adubiaso, Dynamite Hill and Asuadai deposits, which are situated in the Asankrangwa Belt within the Kumasi Basin that hosts world-renowned gold mines, including AngloGold Ashanti’s Obuasi deposit. The Esaase deposit, planned to be developed as part of phase 2, is also located in the Asankrangwa Belt around 25km north of the processing plant site near the Nkran pit.
The mineralisation in all these deposits is characterised by a system of gold-bearing quartz veins hosted by the tightly folded meta-sediments.
Proven and probable gold reserves of phases 1 and 2 are estimated to be 2.43 million ounces and 2.37 million ounces respectively.
Gold mine development
Phase 1 is based on the September 2012 Definitive Feasibility Study (DFS) for the Obotan Project. The Obotan Project was previously owned by PMI Gold Corporation, which was acquired by Asanko Gold in February 2014.
The preliminary mining plan for the project called for the economic production of approximately 2.25 million ounces of gold during 11.5 years of planned mine life using open-pit mining method.
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Asanko Gold, however, increased the capital cost estimate of the project to $295m considering the infrastructure development required to support the possible inclusion of the phase 2 development.
The company announced the start of early construction works involving detailed engineering and start of bulk earthworks at the project site in April 2014. A budget of $16m was approved for this purpose. The company confirmed mineral resources for phase 1 in September 2014, which was estimated to be 49.63 million tonnes of ore grading 2.22g/t Au in measured and indicated categories.
The Definitive Project Plan for phase 1, which has been under construction since August 2014, is expected to be published by the end of 2014.
A temporary mining permit allowing mining operations to start at the Esaase deposit was received in June 2014. The environmental permit for the Esaase project was, however, underway as of October 2014.
Mining and processing
Asanko Gold Mine will employ conventional open-pit mining method for extracting ore during the initial years. The extracted ore will be processed at the carbon-in-leach (CIL) processing plant located near the mine site, which has the capacity to process three million tonnes per year.
Infrastructure and construction
An existing 11km road running between the Nkran pit, the proposed location of the processing plant site and the Abore pit is upgraded to be used as the access road to reach the site. The airstrip at the site has also been upgraded.
“Proven and probable gold reserves of phases 1 and 2 are estimated to be 2.43 million ounces and 2.37 million ounces respectively.”
A 161kV electrical infrastructure will be built with an investment of $18.18m for providing power supply to the mine. The construction of the processing plant is estimated to cost $85.48m, while the buildings, offices and other accommodation facilities are estimated to cost $12.31m.
Other facilities, including the Tailing Storage Facility (TSF), Waste Rock Dump (WRD) facility, Run of Mine (ROM) facility and the water supply facility, along with associated civil works, will cost up to $23.08m.
Construction of phase 1 is expected to create approximately 1,000 jobs, while around 700 people will be employed during the operation phase.
Financing the Asanko project
Asanko Gold signed a $150m debt facility agreement for the phase 1 development in July 2014 with a special purpose vehicle of RK Mine Finance Trust I (Red Kite) that includes $130m of project facility and $20m of cost overrun facility.
DRA was awarded the engineering, procurement and construction management (EPCM) contract for the project in April 2014. Knight Piesold was simultaneously appointed as the design contractor for the TSF.