Asanko Sees Mine Becoming One of Africa’s Largest Gold Operations

Published: May 15, 2015 17:11

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Asanko Gold Inc. (TSX:AKG,NYSEMKT:AKG) released the results of a Phase 2 expansion prefeasibility study.

Thursday May 14, 2015, 10:28am PDT

Asanko Gold Inc. (TSX:AKG,NYSEMKT:AKG) released the results of a Phase 2 expansion prefeasibility study. It combines the Phase 1 Obotan project, which is currently under construction, with the Esaase project into Phase 2 of the Ghana-based Asanko gold mine.

As quoted in the press release:

The Phase 2 expansion will integrate the Esaase deposit with the Phase 1 Obotan project to create one large, multi-pit mine producing an average of 411,000 ounces of gold over a 10.5 year Life of Mine (‘LoM’) from 2018. The ore will be mined and crushed at Esaase and then conveyed to a central processing facility at Obotan. The processing facility will be expanded with a 5 million tonnes per annum (‘Mtpa’) flotation plant which will be built alongside the Phase 1 3Mtpa Carbon-in-Leach (‘CIL’) plant. In addition the annual throughput of the Phase 1 CIL plant will be upgraded and increased to 3.8Mtpa by adding two extra CIL tanks to allow for the blending of oxide ores from Esaase with feed from the Phase 1 pits.

The combined project, at an assumed US$1,300 per ounce gold price, yields a 27% after-tax internal rate of return (‘IRR’) with a net present value (‘NPV’) of US$770 million at a 5% discount rate.

Peter Breese, president and CEO of Asanko, commented:

The outcomes from the Phase 2 expansion study have exceeded our expectations and will deliver significant value to our shareholders.

At the time of the merger with PMI Gold in December 2013 we estimated that up to US$100 million in NPV synergies (based on US$1,400 per ounce gold price) could be achieved by developing the assets in a phased approach and leveraging off shared infrastructure and overheads. We have been able to increase those expected NPV synergies to over US$147 million even though we have used a lower gold price of US$1,300 per ounce.

The incremental value and returns of Phase 2 further enhance what was an already robust project and will result in the Asanko Gold Mine becoming one of the largest gold mining operations in Africa with lowest quartile all-in sustaining costs. This highly competitive cost base, which includes corporate overheads, has always been a key driver in our development strategy.

In addition, the expansion of the processing facility to integrate the Phase 2 flotation plant with the Phase 1 CIL plant will give the Asanko Gold Mine total operating flexibility to handle all the different types of orebodies that are currently within the mine plan as well as give us flexibility to fully optimize near mine deposits that may be discovered in the future.

Click here to read the full Asanko Gold Inc. (TSX:AKG,NYSEMKT:AKG) press release.

africa Asanko Gold Inc.ghana gold gold mine

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