Golden oldies.


Ashanti Goldfields, building on its traditional success at Obuasi is bringing the Siguiri mine in Guinea into production on the premise that, like most other African gold mines, it will enjoy a long and productive life.

Africa's gold mines have long shelf lives. Mines in Australia tend to have an average production life of seven years; their US counterparts produce for roughly 12 years; South African mines are active for around 20 to 25 years -- but the Obuasi gold mine in Ghana is the grand-daddy of them all. It has beer churning out the yellow metal since 1907 and is now looking forward to a second lease of life. Obuasi's production target for 1998 is a massive 850,000 ounces, with operating costs of $254/oz.

The 1998 production target for Siguiri is 120,000oz at the remarkable operating costs of $34/oz -- cheaper than Obuasi by $220/oz. The $55m Siguiri project is coming onstream within budget and nine months ahead of schedule. Commissioning of the gold plant will start by the end of the first quarter.

Siguiri has a 2.9m oz deposit; at an annual production rate of 150,000oz it would have a mine life of nearly 20 years, living up to the tradition of African long life producers. Existing infrastructure at the site from the previous alluvial mining operation is being exploited and has resulted in substantial savings. Recruitment has been completed and access roads, power plants and arrangements for fuel supply and river water extraction are in place.

Guinea is currently Africa's sixth largest gold producer. Other companies active in the country include Kenor, a Norwegian junior mining company which has been producing gold there since 1995. 1997 production at its Lero mine was 42,865oz at costs of $260/oz including indirect costs, royalty and taxes.


Proven ore reserves at Lero are 1.4m tonnes at 3.7g/t or 167,000 ounces of contained gold. Prior to the start-up of operations in 1995 the feasibility study predicted cash operating costs over the life of the mine at $130/oz. Lero is representative of the reality of mining in Guinea. Most of the increase in operating costs are associated with factors beyond the control of mine management -- such as the high cost of transportation and the lack of competition for consumables, supplies and spares. There are no towns near the mine, the area is extremely remote -- telecommunication to Conakry, the capital of Guinea, is possible but erratic.

While there is good potential for the...

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