Asante Gold’s (CSE:ASE) long-time shareholders have seen stock price appreciation most investors can only dream of — nearly 1,700% in a little more than two years.
The mid-tier gold miner owns two mines in Ghana that have planned to produce about 350,000 ounces of gold annually. It has resources in excess of 5 million ounces and nearly 3 million ounces of gold in the reserve category, not to mention an extensive land package with significant exploration potential. Ghana is the seventh-largest gold producer globally and has the biggest gold endowment in West Africa, with more than 130 million ounces of reserves.
Asante Gold Chief Executive Officer Dave Anthony is an experienced mining executive, having formerly served as Chief Operating Officer of African Barrick Gold and, most recently, Chief Operating Officer of Cardinal Resources, which was acquired for more than $500 million.
Anthony met with Canadian Securities Exchange Magazine in July to discuss the company’s plans for continuing to increase shareholder value and why he believes in the long-term future of the gold market.
Asante has enjoyed a lot of success in the past two years and your investors have done extremely well. How do you plan to continue enhancing shareholder value going forward?
In March 2021, our share price was about $0.08. By late April of this year, Asante stock was trading over $2.00 and we’re currently sitting at about $1.50, so that’s significant share price appreciation in a little over two years.
I first went to Ghana to take a look at the Bibiani project on July 9, 2021, so it’s been about two years since we acquired Bibiani, put together a refurbishment plan, brought the mine into production and in the past year delivered about 110,000 ounces while ramping up production. Along the way, we acquired the Chirano project, which is immediately to the south.
Going forward, we plan to increase shareholder value through capital investments that we expect will allow our company to reach a production level of 550,000 ounces of gold per year, which will be achieved through improved costs, improved recovery, expansion of mining activities and so forth.
At Bibiani, as we move deeper into the ore body, we need a sulfide treatment plant, and that is about 30% complete but we do need capital to get it finished. Our company also needs to be able to extract some of the “sweeter” ore to the south, and that requires the relocation plan to be executed, which requires more capital.
With Chirano, Asante Gold is working toward getting recovery up to 92%, while achieving throughput of up to 4 million tonnes a year. And, late next year we’ll be going underground at Bibiani and increasing gold production and grade. So, there are several relatively minor capital improvements to get to the point where from 2025 forward, Asante Gold will see a significant increase in its yearly cash flow.
On June 1, your company announced the Chirano business improvement plan to boost production and reduce costs in the coming year. Tell us more.
At this time, it’s all about the business plan and some required capital improvements. We haven’t been able to issue debt and get our balance sheet in order, but once the company completes the previously mentioned initiatives and makes those improvements then Asante Gold should become consistently profitable.
How do you plan to finance the activities you’ve mapped out for us?
We do have several initiatives in place that we expect will come to fruition in the near term, which I cannot disclose at this time. Our company has great assets in Bibiani and Chirano, and due to the land position we control and how prospective it is, we expect exploration results much like what is being found on the Carlin Trend in Nevada. That said, we need to make improvements to boost the amount of gold ounces produced as well as drive costs down.
What are your thoughts on the gold market in general and its outlook?
If you look at how gold has trended over the last 30 years, you’ll find that the US$2,000 mark is not an aberration, and the outlook for gold into the mid $2,000 per ounce range is probably defendable. So, if you are the type of person who believes gold will slide back toward $1,500 to $1,600 per ounce, then you probably shouldn’t be invested in gold and gold stocks in the first place.
We believe gold provides long-term preservation of wealth, and when Asante Gold begins producing at all-in-sustaining costs of around US$1,100 to $1,200 per ounce, we’ll have great margins, especially for a company mining more than half a million ounces of gold per year.
What other developments do shareholders have to look forward to during the next 12 months?
Putting the company’s balance sheet in order and fully executing our business plan, which should boost cash flow. Asante Gold has a significant competitive position in West Africa. We operate the company from Ghana, not from an office on Bay Street in Toronto, and I personally spend more than half my time in Ghana.
Is there anything else that you want the financial community to know about your company?
Asante Gold is a company of technically driven operators that are focused on producing gold. As well, 45% of the company is owned by Ghanaian individuals and Ghanaian institutions, so Asante Gold has a strong ESG (environmental, social and governance) profile. I believe it’s an innovative model for mining going forward and for our stakeholders who have, and will, benefit from our activities.
This story was featured in Canadian Securities Exchange Magazine.
Learn more about Asante Gold at http://www.asantegold.com/