Moto Goldmines disappeared from stock market listings this week, following its friendly takeover by a joint venture involving AngloGold Ashanti and Randgold Resources, the target being more than 20m ounces of gold that have been outlined at the Moto project in the far north east Democratic Republic of the Congo.
The transaction has further intensified investor interest in listed gold stocks active on the continent as a whole; at least 80 names can be identified.
A good number of these stocks currently rank as the world’s most in-demand gold stocks, as indicated by the table that follows this article.
While gold mining in South Africa has been very much a formal activity for well over a century, various kinds of gold mining activity have for many centuries characterised gold belts located in parts of Africa. New “discoveries” are indeed rediscoveries; relative to the gold belts available, very little modern exploration has taken place. In the DRC, as an instance, the semi-continuous Kilo Moto greenstone belt is currently under exploration by Moto Goldmines, AngloGold Ashanti (separately, to the south) and Mwana Africa.
London-listed Mwana recently announced an initial resource of 452,000 ounces of gold outlined on the Zani-Kodo trend within the Kilo Moto gold district. The general Kilo Moto location is remote, and the new Moto JV partners will be budgeting good amounts of money for basic infrastructure, and rehabilitation of one or more of a number of run-down hydropower facilities.
History shows, however, that these are old hats, albeit good ones.
The semi-continuous Kilo Moto greenstone belt was exploited primarily in the 1950s and 1960s by Belgian charter companies, producing more than 3m ounces of a total recorded 11m ounces of gold production from hard-rock mines in the Kilo Moto belt.
The mining was mainly focused on surface operations, a mixture of alluvials and shallow oxide pits.
The concessions are like small countries. To the south of Zani-Kodo lies what’s currently known as Mongbwalu, where the 10,000 km2 kilometer concession 40 (AngloGold Ashanti, 86.22% and OKIMO (a DRC parastatal), 13.78%) is being extensively explored by AngloGold Ashanti. Mwana Africa, in a 80:20 JV formed with OKIMO, holds gold mining rights over 1,610 km2 in Orientale Province.
The Moto Goldmines project, 570km north east of the city of Kisangani and 150km west of the Ugandan border town of Arua, covers an aggregate lease area of some 1,841 km2. Activities to date have primarily focused on just 35 km2 surrounding the old Durba gold mine, where a monumental resource of 25.7m ounces of gold has been outlined.
Some considerable distance to the south, Banro holds gold concessions in the Kivu provinces, stretching west of Lake Kivu. Mine build at Twangiza, nearest deposit to Bukavu, is underway. Annual production from the first phase plant is anticipated at between 80,000 and 110,000 ounces of gold a year. London-based Mark Smith of GMP Securities Europe fancies the Banro story: “We have tracked the evolution of Banro in terms of the development of the gold projects and the share price performance.
“The share price chart appears to have mirrored the classic ‘resource value curve’, from exploration discovery through to resource expansion and project development. We believe Banro is entering the fourth phase in the mining project life cycle, given recent development land marks.
“First, in June 2009 Banro raised C$100m to commence the development of the Twangiza oxide gold project. Second, in August 2009 Banro purchased a refurbished 1.0m tons a year CIP plant from Australia and plans to expand the plant to 1.3Mtpa.Third, in August 2009 the DRC government ratified Banro’s four mining licences and agreed on the fiscal terms for the 25 year exploitation permits. Four, in September 2009 Banro appointed Standard Chartered as the debt advisor to raise the project debt for Twangiza”.
In its initial phase, Banro is to opt for diesel rather than hydroelectric power; capital expenditure is anticipated at around US$145m. Further phases, and capital outlays, could see output at the multi million ounce Twangiza property increase to 300,000 ounces a year. There is gold all over the place: there is evidence of considerable artisanal activity on parts of Banro’s considerable concessions.
With at least 80 listed gold stocks active in African gold, there is lots of competition to attract investor interest. Some of these stocks are out of the top draw, such as Barrick, the world’s biggest gold miner by output and market value. There are other Tier I global gold miners with operations on the continent, in the form of AngloGold Ashanti, as mentioned, Gold Fields, Harmony, and Newmont, which has concentrated on West Africa, just as Barrick has on East Africa.
Further down the pecking order, there are a dozen or so African gold stocks that attract what may loosely be described as interest from professional investment analysts. For more detailed information on this article please visit Proactiveinvestors
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