Is Guinea the next frontier to be hit by the West African gold rush?

Guinea West Africa gold rush AngloGold Ashanti Predictive Discovery Polymetals Resources Golden Rim
Many first movers in Guinea believe the country is underexplored, with the Guinea Government estimating the country hosts around 700t in gold reserves.

As the spotlight shines on West Africa as a gold exploration destination, one country in the region is becoming increasingly popular with explorers and investors alike – Guinea-Conakry.

The West African country is about 246,000 square kilometres and hugs the Atlantic coast.

At its northern end, it shares borders with Mali, Senegal and Guinea-Bissau. Its southern end borders Liberia, Sierra Leone and Cote d’Ivoire.

Guinea is home to 16 million people and is known for its mineral riches, which prop up the economy along with its agriculture sector.

The country hosts around 35% of the world’s known bauxite resources and is also known to be prospective for diamonds, iron and gold.

With gold fast-closing back in on last year’s US$2,070.05 per ounce record, the precious metal is in focus globally and progressively more in Guinea.

ASX hopeful Polymetals Resources’ is one company which is frothing at the bit to advance two gold projects in the country.

Polymetals chief executive officer Alex Hanly told Small Caps the company was drawn to Guinea – particularly the Siguiri Basin, because it was “a known fertile goldfield and significantly underexplored”.

He said the Guinea Government also had a proactive approach to “bolstering” the country’s exploration and mining sector.

“Through our ongoing conversations with the Guinea Government it is clear that they are at the forefront of promotion of mineral exploration and mining, while also focusing on strengthening the economy and upskilling the labour force.”

Mr Hanly added the Siguiri Basin in Guinea is a “prolific and well-endowed gold field”, which is evident from the historic artisanal activity and AngloGold Ashanti’s (ASX: AGG) long-term Siguiri gold mine which has operated for over 20 years.

Gold glitters in investors eyes

Supporting gold explorers in Guinea are the investors which appear only too willing to part with their money to facilitate discoveries and development in the country.

ASX-listed junior Predictive Discovery (ASX: PDI) is a case in point after recently raising a further $26.5 million to fast-track a massive 110,000m drilling program at its Bankan gold project in Guinea over the next year.

The placement was largely driven by a number of tier-one North American funds with a “track record” of “strong success” investing in emerging West African gold explorers.

Predictive managing director Paul Roberts said the company had received “overwhelming support” for the placement which was backed by international and domestic institutional investors.

Investors were offered Predictive shares at $0.08 each, which was an 8.38% discount to the five-day volume weighted average price prior to the placement.

What appeals to investors with Predictive is the 358sq km Bankan project, which is described as a “major West African gold discovery”.

By the end of April, Predictive had completed 70,000m of drilling across the project with three rigs “aggressively” drilling in order for the company to debut a maiden resource in the “coming months”.

Underpinning the resource are two greenfield discoveries – NE Bankan and Bankan Creek.

At NE Bankan, drilling has uncovered wide and high-grade mineralised zones, with a notable intercept of 46m at 6.6 grams per tonne gold.

Over at Bankan Creek, drilling hit 92m at 1.9g/t gold, including 9m at 2.3g/t, 43m at 1.8g/t and 16m at 4g/t.

As well as these prospects, Predictive has firmed up numerous high priority regional targets across a 35km-long gold corridor at the project.

Polymetals Resources takes on Guinea

Via its $5 million IPO, Polymetals is giving investors a chance to gain exposure to its two projects in the country, which are less than 40km from AngloGold’s Siguiri gold operation.

Polymetals is offering 25 million shares at $0.20 each and bringing to market the Alahiné and Mansala projects, which are 64sq km and 48sq km respectively.

The company’s chairman David Sproule is no stranger to Guinea, having invested in the country since 2017.

He said the board and management had a practical approach to the mining industry and were “optimistic” of establishing a long-term gold mine in the country.

Mr Sproule is backing this theory with his own cash by maintaining up to 43% equity in Polymetals once the IPO has been filled.

Meanwhile, Mr Hanly said the Guinea Government’s Minister of Mines and Geology met with Mr Sproule in Siguiri last year.

At the meeting, the Guinea minister restated the government’s ongoing support of mining in the country.

Multi-million-ounce gold potential

Once Polymetals has successfully made its ASX debut, Mr Hanly said its strategy is to define a significant gold resource over the next year.

He said the company will explore the “highly anomalous” targets across both projects, which host historic and current artisanal gold workings.

At the more advanced Alahiné project, Polymetals has undertaken soil sampling and reverse circulation drilling.

Drilling intercepted several mineralised zones over 51m in one hole, with a best interval of 12m at 3.09g/t gold from 89m.

Soil sampling returned up to 93.98g/t at Mansala, which lies to the south of Alahiné and hosts several hundred artisanal pits and shafts.

“Polymetals has developed strong relationships within the local community and will continue to provide infrastructure to encourage enterprise as well as the education of best practice geological expertise within our all-Guinea national geological team,” Mr Hanly said.

Another junior on the lookout in Guinea

As well as Predictive and Polymetals, other juniors are vying to peg up and develop gold ground in Guinea including Golden Rim Resources (ASX: GMR).

The company is currently waiting on approval, which is expected “shortly”, from the Guinea Government to acquire up to 75% of Damissa Koura and Kankan West in the country.

These assets are in addition to the recent joint venture over the Kada project in eastern Guinea.

Golden Rim voiced a similar view to Mr Hanly about Guinea remaining one of the most “underexplored” countries in West Africa.

Big end of town

At the big end of town, AngloGold has shown a gold mine can be developed and operated in the country with its success at Siguiri, which has been in operation for more than 20 years.

The company owns 85% of the mine, with the Guinea Government holding the remaining 15%.

In 2020, AngloGold’s attributable production from Siguiri was 214,000oz – roughly unchanged compared to 2019’s performance.

Another major with a gold operation in Guinea is Russia’s Nord Gold with its 85%-owned Lefa open pit mine.

During 2020, Lefa generated 177,500oz gold, which was down 6.5% on 189,800oz in 2019 due to lower grades and reduced processing.

Moroccan group Managem will begin producing from the Tri-K project in Guinea in the second half of this year. The project has 2.04Moz in resources and 1.14Moz in reserves.

It comprises two mining licences, 12 exploration permits and an operating licence. Once operational, Managem plans to produce 120,000ozpa from Lefa.

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