Guinea: Predictive Discovery expects gold resource increase at Bankan as Blackrock invests

By David Whitehouse
Posted on Thursday, 23 June 2022 06:00

Drilling at the Bankan project in Guinea. Photo supplied.

Australian exploration and mining company Predictive Discovery anticipates that the gold resource at its Bankan project in Guinea will increase as further tests are carried out, managing director Andrew Pardey tells The Africa Report.

The inferred resource at the site is 3.65m ounces of gold, which by itself is comfortable enough to justify development, Pardey says. Bankan has the potential to become a Tier One mine which can remain in production for between 15 and 20 years, adds Pardey, a former CEO of Egyptian gold mine operator Centamin. “This resource is only going to continue to grow.”

Predictive Discovery, which trades on the Australian stock exchange, in May raised A$55m in an oversubscribed placement which drew support from institutions. Among the investors is Blackrock, which at the end of May reported a stake of seven per cent.

Research from Berenberg on 15 June says that drilling results “confirm the exploration potential at depth suggesting the scope for a materially larger resource and the long term potential to support an underground mine to augment open pits . . . Bankan is the most prospective exploration prospect in Africa at present in our view.”

The Bankan project sits in the Siguiri Basin, the least explored region in the West African Birimian Greenstone belt. The company has four exploration permits including Bankan, and nine prospects have been identified. Further exploration will take place, though Pardey says the focus is on Bankan for now. The company will give resource updates in late July/early August, at the end of this year and in mid-2023.

National park

Key risks remain, according to a research note from Argonaut on June 15. These revolve around the lack of a civilian government following the 2021 military coup, and concerns over the fact that Bankan is in the outer buffer zone of the Upper Niger National Park, which has one of West Africa’s largest chimpanzee populations. Argonaut, which acted as joint lead manager in the May share placement, rates the shares as a “speculative buy.”

The company is currently consulting with the government to establish that mining can be carried out in the area. Pardey is confident that the process will be smooth, with the government having told the company that they are “supportive,” he says.

Guinea has a well-established mining culture in bauxite and gold, and ministers are accessible, he adds. Pardey plans to give the government a full scoping study at the end of 2023. It’s perfectly normal for the government to want to see that study before agreeing that the project area can be “excised” from the national park, he adds.

The research from Argonaut notes that Predictive Discovery is “still in its infancy” as a developer. Some small companies, such as Altus Strategies in Egypt, prefer to concentrate on exploration and then bring in partners to build and operate the mine.

  • Pardey is confident that his management team, which includes former Red Back Mining executive Simon Jackson as non-executive chairman, has the depth of expertise to take on both tasks.
  • The building of the mine is due to start in 2024, and may take between nine and 14 months.

Bottom line

Predictive is confident that it has the depth of talent needed to carry out both exploration and production in Guinea.

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