West Africa Gold Mining - A Brief History11 Sep 2021 00:52
IN 1997, when Randgold Resources listed on the London Stock Exchange, about 2.5% of world gold production was being dug in West Africa, of which most was from Ghana. In contrast, South Africa produced more than 15% of total world production.
Two decades later, just as Barrick Gold absorbed Randgold Resources in a merger that left a gaping hole in London’s gold investment market, the picture could hardly be more different. West Africa comprised 12.5% of world gold output, largely owing to major new mineral discoveries in the francophone regions of Mali, Côte d’Ivoire and Burkina Faso. South Africa had become a relative minnow in the gold mining stakes, worth only 3.2% of world production, according to data from the Minerals Council South Africa.
The prognosis of those invested there is that the West African region will grow its production base further. “West Africa will overtake China in the near future,” says Sébastien de Montessus, CEO of Endeavour Mining, a company whose ambition is to become London’s go-to gold share, filling the vacancy left by Randgold in 2019. Six of the world’s largest gold producers by market capitalisation have a presence in the West African region. “I expect it to grow faster than other regions of the world.”
West Africa attracts the most gold exploration spend after North America and Australia, and consequently has been host to an estimated 79 million ounces in new discoveries in the past decade, the most globally, according to S&P Market Intelligence. But it’s risky operating there.
In the end, De Montessus believes it boils down to a risk-reward equation investors will have to assess. “We feel that this is the place to be,” he says. “Some investors will be looking for, I would say, moderate risk, which are probably [areas in] North America or in Australia. But they have less reward.”
“When I started in the early Nineties it was risky; much more risky than it is today,” says Mark Bristow. “Mali is the very foundation from which we built Randgold, but it has always been a country of risk. It worried me most,” he says. “But it’s the country that has delivered the most as far as our exploration success goes.”
De Montessus has high hopes for the listing. “We will be the largest pure gold player on the premium segment and I think alternatives in London have been mainly Russian assets – companies exposed to Russia – so we have an attractive proposition.”
https://www.miningmx.com/top-story/47434-west-africas-political-whirligig-wont-keep-investment-dollars-from-its-gold/
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My Thoughts:
Few in the retail investment community predicted the fall of South Africa and the rise of West Africa in terms of gold output. Therefore those of us interested in growth for Centamin would be unwise to write off Burkina Faso just yet. Similarly, Egypt could easily repeat the feat - becoming the next great source of world production in ten or twenty years - with Centamin at the f
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