The Mineral Income Investment Fund (MIIF) has acquired 3.5 per cent of the Asante Gold Corporation (Asante) in line with its vision to hold stakes in high performing mining companies.
The fund paid $20 million for the 14.4 million ordinary shares of the gold miner to mark its first foray into the global capital markets.
It was completed last week, earning MIIF a part of the mining company that recently acquired the Bibiani Mine from Resolute Mining Ltd in the country.
A statement from the MIIF said the decision to invest in Asante was in line with its strategic objective of holding significant equity positions in high yielding mines in Ghana and globally.
It said such acquisitions would be made if the metrics were right.
High-yielding
The company’s Head of Operations and Chief Technical Officer, Kwabena Barning, said the MIIF decided to take the offering after rigorous due diligence and a detailed technical analysis of the Bibiani Mine.
It said the analysis showed that the mine had the potential to be one of the highest yielding mines in Ghana.
The Chief Executive Officer of MIIF, Edward Nana Yaw Koranteng, said the fund saw the sale as a window of opportunity for the type of long-term asset it was looking for, especially before the pour of first gold.
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He said the fund was excited about the investment and particularly delighted at Asante’s environmental, social and governance (ESG) performance, including its many social interventions and investment programmes being undertaken in the neighbouring communities even before first gold.
He said the company’s adherence to strict environmentally-friendly practices was also comforting, adding that Asante had recently received the environmental permit from the Environmental Protection Agency, which gave the company the go-ahead to commence project development and production.
High prospects
Koranteng said Bibiani’s prospects were good, with the mining contractor and other key contractors for fuel, explosives and plant refurbishment all substantially mobilised.
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,” the CEO said in the release.
He 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 nine years. Bibiani’s all-in sustaining cost (AISC) of less than US$1,000 per ounce 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,” Koranteng said.
Market alert
The statement said Asante last week 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 per cent.
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,” the CEO of MIIF said.
About MIIF
The MIIF is a sovereign fund mandated by the Minerals Income Investment Fund Act, 2018 (Act 978, as amended).
It aims to maximise the value of the income accruing to Ghana from mining investments in a beneficial, responsible, accountable and sustainable manner and to monetise Ghana’s mineral wealth in a manner which will bring long-term value to Africa’s largest gold producer.
It currently has about $260 million under management after receiving mineral royalties since 2020.