In light of the perceived ‘start of the Gold bull”, I take a simple novice overview of the African gold mining industry. If you aren’t a novice, you can skip right to the end for a link to the spreadsheet with most gold focused companies active in Africa.
Any additions or corrections are more than welcome.
Africa, the continent
Number one: Africa is a continent. Let’s get that out of the way. 54 countries all with their own (mining) laws, tax system, political landscape, investment pitfalls, values, ethics, etc.
Within the context of ‘Mining’, there is reference to the ‘West African region‘, a major player in the gold space:
Keep in mind, you are already getting a jurisdiction ‘discount’ in most cases but I also know that that discount will never fully go away. What you see many companies try to do is spread their risk across different countries.
Besides this discount, another positive difference with other regions are the operational costs. Drilling, labor, etc. It all translates in AISC’s that are with the best in the business. Prospective land with good grades and low costs, makes for a nice slide…
A good article on West-Africa specifically: https://www.capdrill.com/news/mining-journal-article-golden-era-beckons-for-west-africa
Risk of doing Business
There are several providers and sources to track overall risk profiles. I show one here that shows “West-Africa” and “South-Africa” (the country, Namibia & Botswana) as best-in-class African countries for “Risk of doing Business”. Luckily, most of the companies active in Africa are in these regions, West or South-Africa.
To be crystal clear, you need to check the local conditions individually for each company/asset as regional differences within countries can be huge. Africa, Europe or North America, it doesn’t matter.
Production per country (2019, per Kilogram)
Total gold mine production in Africa from 2005 to 2021 (in kilograms)
A short critical note to add here is the illegal smuggling of gold. The world bank estimated in 2019 that 9.9 Million people work in artisanal African mines.
The big dog
A special mention for Barrick Gold, which is the largest gold producer on the continent:
Above graph to demonstrate the sub $1000 AISC (Purple line on right axis).
African Gold Exposure Spreadsheet
In light of ‘continuous improvement’ and tackling one particle issue, trying to remember which company is operating which asset in which country, I started building my own spreadsheet. While these kind of lists exist for Canada or Australia, the unique thing about Africa is that most companies are listed on the TSX, ASX and LSE rather than on the local exchange. Go where the money is.
Halfway through I asked for backup help to my fellow mining data junkie Adrian at Godás Research. Thanks for helping out Adrian. And thanks to a few that already skimmed through it and gave some feedback.
Sharing this freely is also in response to the endless valuable insights I find online… Thanks all. “Give & take” and we will prosper together (or just do less stupid stuff)
I strongly welcome any feedback on additions or corrections. While we made this out of self interest, any appreciation is always welcomed.
Tradingview: https://www.tradingview.com/chart/WAF/8Wwc68p9-Africa-Gold-Exposure/
The next plan is to try and attend the Cape Town 121 in 2021 to meet with several of the mentioned players.
Cheers, Pete
Have you ever looked at a stock called Bassari Resources (BSR.ASX)? Explorer becoming producer by the end of 2020 in Senegal who have multiple resources and tenements.
Added. Thanks TJA