Asante Gold has secured approval from TSX Venture Exchange to acquire a joint venture (JV) interest in Kubi gold mine from Goknet Mining Company of Accra, Ghana.
The site is located near major mining and milling infrastructure between AngloGold Ashanti's 60 million ounce (Moz) Obuasi gold mine and Perseus Mining's 6.6Moz Edikan gold mine. The JV plans to develop the mine into a custom milling and direct shipping operation.
According to Asante Gold, the JV will focus on permitting, engineering, portal construction and driving an exploration decline to about 180m for resource definition drilling, bulk sampling and mill and metallurgical testing.
Subject to future exploration results, at 500t a day or 30,000oz of gold a year, the proposed plan intends to reduce the site's development time and capital, which is currently estimated as $20m over 16 months to reach production.
Since the mid 1980s, it is thought that more than $30m of exploration and development work has taken place at Kubi gold mine.
Under the terms of the acquisition, Asante Gold will issue Goknet with two million shares in the capital stock of the company to earn a 50% interest in the JV.
The company will fund the JV with $2m within four months of closing the deal and provide total funding of $15m within two years.
The transaction is subject to final approval of TSX Venture Exchange and is expected to be finalised by 31 March.
Permits are required from the Ghana Mines Department and Environmental Protection Agency in order to develop an underground mine at Kubi.
At present, there is a $1.5m provision for future reclamation with respect to previous third-party surface mining operations, Asante Gold said.
Image: Kubi mine's main zone assay long section. Photo: courtesy of Asante Gold Corporation.