The Minerals Income Investment Fund (MIIF), Africa’s largest gold producer has acquired over 14.4 million ordinary shares in a historic investment deal in Asante Gold Corporation (Asante), a mining exploration and development company listed on the Toronto and Frankfurt Stock Exchanges.
Asante purchased the Bibiani mine from Resolute Mining Ltd in August 2021 and has since placed it on an accelerated development programme to bring the mine into production by the third quarter of 2022.
The Asante Gold Corporation also listed on the Canadian and Frankfurt Stock Exchanges, closed a US$100 million round of private placements on the 25 February 2022, for which MIIF acquired 20% at CAD$1.75 per common share (the Offering).
This gives MIIF a total equity position of about 3.5% in Asante as a whole. The company has ambitions of becoming one of Africa’s top producing gold mines and also owns an advanced exploration project at Kubi near Obuasi.
Asante also has other ongoing exploration activities in Fahiakoba and Betenase in Ghana, all within Ghana’s gold triangle, which gives the Company a strong pipeline of projects going into the future.
MIIF’s decision to invest in Asante is in line with its strategic objective of holding significant equity positions in high yielding mines in Ghana and globally, if the metrics are right.
According to the Head of Operations and Chief Technical Officer of MIIF, Mr. Kwabena Barning, “MIIF decided to take the offering after rigorous due diligence and a detailed technical analysis of the Bibiani mine which has the potential to be one of the highest yielding mines in Ghana”.
speaking on the MIIF decision to acquire the shares, Chief Executive Officer of MIIF, Edward Nana Yaw Koranteng, said “it was a window of opportunity for us ( MIIF management) and the type of long-term asset we are looking for especially before the pour of first gold”.
“We are extremely excited about this investment and particularly delighted at Asante’s ESG performance including the many social interventions and investment programs being undertaken in the neighboring communities by Asante even before first gold and its adherence to strict environmentally friendly practices” Edward Koranteng, the Chief Executive Officer of MIIF said.
Asante has recently received the Environmental Permit from the Environmental Protection Agency, which gave them the go-ahead to commence project development and production.
According to Mr. Koranteng, Bibiani’s prospects are very good, with the mining contractor and other key contractors for fuel, explosives and plant refurbishment all substantially mobilized.
“We are in for the long haul and expect to see a gradual climb of the share price once Asante has achieved its key milestone of first gold in August”.
Mr Koranteng further emphasised that, “Bibiani is significantly de-risked given its past producer status and will have a production profile between 220,000 to 260,000 oz/year) for the next 9 years.
Bibiani’s all-in sustaining cost (AISC) of less than US$1,000 per oz. is in the lower quartile of comparable operations in Ghana where the average is circa US$1,250/oz.
This we believe will make the mine competitive even in the face of the volatility that we sometimes see in the gold market.
Asante on Friday, February 25, 2022, announced to the Canadian Stock Exchange that Emiral Resources, a minerals group building a diversified portfolio of operations in Africa had also increased its shareholding in the company to a little over 19.5%. MIIF’s US$20 million investment in Asante is its first foray into the global capital markets.
“Our long-term vision is to create Africa’s largest Minerals Income Fund with at least US$500 million under management as early as 2025. The minerals income we receive today must guarantee long term value for all Ghanaians. I believe we are on course, and I am excited about what the future holds,” Mr. Koranteng said in his conclusion.
MIIF is a sovereign fund mandated by the Minerals Income Investment Fund Act, 2018 (Act 978, as amended) to maximize the value of the income accruing to the Republic of Ghana from mining investments in a beneficial, responsible, accountable, and sustainable manner and to monetize Ghana’s mineral wealth in a manner which would bring long term value to Africa’s largest gold producer.
MIFF currently has about $260 million under management after receiving Mineral Royalties since 2020.