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The Greatest Gold Address in Ghana: Adamus Resources’ Southern Ashanti Gold Project is a True World-Class Deposit 

Mark Bojanjac, Managing Director and CEO of Adamus Resources Limited, says that the wealth of mining in Western Australia made the industry a clear career choice for him 15 years ago.

A chartered accountant by training, the first mining company Bojanjac floated was the highest grade gold mine run in Australia. His interest was sparked and he became involved in mining in Mongolia.

“This was before Mongolia was popular, in fact, it was hardly even known about. That was also a very good project which was ultimately floated as part of Centerra (Centerra Gold of Canada) which is now one of the world’s largest gold mining companies,” he says

“During the course of all of this I became involved in fixing a small company in West Africa which was focused in Ghana. That was when I became aware of what is the core of the Southern Ashanti Gold project.”

The project was acquired by Adamus, and Bojanjac has been involved with the company ever since, eventually becoming CEO about two-and-a-half years ago.
Today, the Adamus Southern Ashanti Gold project spans 665 square kilometres—a long way from its 40 square kilometre beginnings under BHP ownership.

IRJ spoke with Bojanjac about the incredible growth of the Southern Ashanti Gold project and Adamus’ goals to mine and produce the project in the future.

The Southern Ashanti Belt: A premier gold address

The Southern Ashanti project currently weighs in at a little over two million ounces in resource, most of which is in the top category of measured and indicated.
“A little over half is minable reserve, most of which is proven. Again, that’s top category, so we have a very high level of confidence for 1.1 million ounces in reserve, which is clearly minable today and very economical at the current gold price,” Bojanjac explains.

“We’re right on the southern end—and the Ashanti Belt is honestly probably the premier gold address in Africa, and one of the best geologically worldwide.”
Today, 40 per cent of Ghana’s export wealth comes from gold mining, making the Southern Ashanti project quite significant to the country’s government.

“The project exports two-and-a-half million ounces a year at the moment. We would be doing about 100,000 ounces a year when we’re in production, so that’s about a five per cent increase to the overall production initially,” Bojanjac says.

“There’s an enormous amount of upside within our deposit and what we’ve really done—drill up enough to get started. One million ounces-plus today is quite a lot of wealth at a US$1,200 dollar gold price.”

The Ghanaian government is generally very supportive of gold mining, and Bojanjac says that the political system offers local community heads and representatives plenty of scope for involvement in the local industry.

“The people on the ground have plenty of say through their local chieftaincies. Each local village has a chief and some of these are literally less than a kilometre apart. Above that, there’s a head of the chieftaincies and above that again there is a member of parliament, and on that goes, right up to ministers within the Ghana government itself. They all take a fairly active interest,” he says.

In the case of the Southern Ashanti project, this is truer than ever because the particular region which houses the project has never had an existing gold mine before.

“We will be the largest social and economic impact in our immediate area so we’re a fairly significant part of the community’s life. Because of the way that we started, with one deposit growing into something much bigger over the last nine years, we’re bringing in seven separate chieftaincies and villages together into one project,” Bojanjac says.

“We’ve had a number of challenges over the years in terms of embracing all of those groups into one, and we’ve had community meetings involving all of those people. They’re all affected and will stand to benefit to varying degrees depending on what gold influence they have in their particular region. That’s been a bit of a social challenge over time but it’s gone very well. I was there a week ago and the status on the ground is: that we have a license, it will be mined, and they want to see that happen. They just want to be involved, which they will be—in activities and also earning some money by helping us.”

The generally mining-friendly stance taken by Ghana, coupled with the market edge and current ways in which Adamus are going about attracting the best international mining professionals, sets the Southern Ashanti project apart from other emerging gold producing mines.

Adamus and the G.F.C.: A double-edged sword

Bojanjac explains that the global financial crisis (G.F.C.) has offered both peaks and valleys for Adamus. He agrees, that like everyone else, the company has endured some difficult times as a result. However, the crash has not been without its positive repercussions either.

“Because of our fairly strong shareholder base, we were able to be funded. There are not many companies who can do that, and that funding served us well for a time,” he says.

“The good news is that the lead times for the larger equipment items have halved. Things that were going to take 110 weeks to deliver are now 45 to 50 weeks, so it’s quicker to build the project.”

Perhaps the greatest outcome of the G.F.C. is the newly available, “A-Team”, which Adamus has acted quickly to attract.

“All of the key people, the A-graders across the industry—from consultants to engineers and so on, have all been busy on other jobs in nickel and iron ore and the like. Gold has been the poor cousin for five or six years and unable to afford those people and struggling to actually get attention from them. Now they’re displaced from all of those industries and they’re available,” Bojanjac says.

“The availability of the A-Team to work our projects has been one of the most significant windfalls of the G.F.C. The other has been the gold price. We’ve gone from US$730 dollars an ounce this time last year, to US$1180 and at that level it’s all profit. Those three things: building it quicker, getting the A-Team on it so you’ve got less execution risks doing it, and a better gold price have all been in our favour. On the flipside the equities market is still weak, it’s not what it was. The money is still there but you have to give away more shares than you would a couple of years ago. However, I’d rather build it today than a couple of years ago.”

Attracting and retaining the best staff around is not a measure confined to merely reacting to the financial crisis at Adamus. Instead, it indicates the company’s position today, poised to mine and produce the Southern Ashanti project.

“What we’ve really done is sought to bring into our organization a lot of key people that we wouldn’t have been able to afford previously and weren’t available. We’re doing this while we can get them. We actually have a team of people who are more akin to what you might have found in a mining company that has been around for 10 to 15 years, and we’ve got it all right up front because they’re available,” Bojanjac says.

“We’ve got enough to get on and build and run at this stage which wasn’t the case six months ago. It just shows how well we’ve fared in getting and attracting those people to join us.”

There’s no ‘maybe’ about it
 
“What you’re looking at today is a company which turned a good idea initially into a proven reserve, and that’s now transitioning into a miner from an explorer. All of the new people we’re employing now are really helping us to turn from explorer, to miner, to producer,” Bojanjac explains.

“Right now, we’re building the factory and employing people to do that, and then employing people to run it. In terms of milestones, these people are fairly critical.”

During this past year, Adamus have fully permitted the Southern Ashanti project with the Ghanaian government.

“At this stage, we have granted mining leases and all of the environmental approvals to start. In fact, we have started,” Bojanjac says.

“We’ve been clearing two sites at the moment. One is for a small village we need to move and we’ll be building a new village there. You can see pictures of a trial house we built using local materials on the past announcements. We’ll be building lots of those and the locals are very supportive of that as they’ll be involved in the process themselves. We’ve also cleared the site where the gold processing plant itself will go and we’re working on that right now. Our aim is to have our engineers onsite constructing in the first week of January next year, and we’re on schedule for this.”

It comes as no surprise to learn that Adamus’ short term goal is to bring the Southern Ashanti Gold project into production, and that their long term goal is to grow it.

We will grow it in two ways. One is organically. There are more ounces in our ground; we’re surrounded by 100,000 ounces in 100 kilometre radius. We have 665 square kilometres and we’ve explored about 15 per cent of it. It’s not a ‘maybe’ that there’s more gold there, there is. So we can certainly grow it organically,” Bojanjac explains.

“The other way is once we’ve got it to production we’ll seek to acquire other things to give us longer-term mines in the region and also outside the region.”

Adamus has a crack-team of industry experts, strong shareholder and mining-friendly country support, and is well on the way to mine and then produce from the Southern Ashanti Gold project. When you consider not only what the project means for the company in terms of great due success, but also for the Ghanaian locality, this is extremely exciting news at a time when the industry is watching this prime gold real estate very closely.

www.adamusresources.com.au.