Gold developer, Azumah Resources Limited, is seeking a project partner to assist with the development of its Wa gold project, in Ghana.
Managing Director Steve Stone told delegates at the first day of the Africa Downunder conference in Perth, Australia, that funding the A$168 million (approximately US$118.31 million) project had proven difficult in current market conditions, especially considering that Azumah had a market cap of only A$10 million (approximately US$7.01 million).
He told Mining Weekly Online on the sidelines of the conference that, while Azumah had not defined the size of the project equity it would be willing to divest, the company was expecting it to be “substantial”.
“It’s obviously something that will be negotiated and we are in the early stages yet in our discussions,” Mr. Stone said.
However, he noted that financing conducted at project level would mean less dilution for shareholders compared with an equity raising through the listed company.
Mr. Stone noted that Azumah was currently in negotiations with six to eight companies regarding their possible involvement in the Wa project, with most of the negotiating parties based in the Middle East and Asia.
“The negotiations are moving along quite steadily and we are hoping to have a transaction within the next few months,” Mr. Stone said.
A recently updated feasibility study estimated that the project would require a capital injection of about A$168 million (approximately US$118.31 million), to deliver an average of 90 000 oz/y of gold over a mine life of seven years.
However, Mr. Stone noted that Azumah was working to lower capital cost estimates at Wa.
“Some of the people we are talking to also have the ability to help us bring those costs down by supplying equipment at much lower prices than those indicated in the study. That is one of the reasons we are talking to these groups; they can actually help us achieve that. So it’s a double benefit,” Mr. Stone said.
Azumah Resources Limited is a Perth-based company focused on exploring and developing its Wa Gold Project in the Upper West Region of Ghana, West Africa.
Three main deposits have been discovered and extensively drilled out at Kunche and Bepkong, adjacent to the Black Volta River and Ghana’s border with Burkina Faso, and at Julie —80kilometres to the east. Several satellite deposits, including Aduane and Collette, have also been delineated.