Koné project in Côte d’Ivoire is Africa’s biggest new gold mine in a world short of new supply of the yellow metal
In a world where new gold mines have become few and far between, Montage Gold’s Koné project in Côte d’Ivoire, the biggest new gold project in Africa at present, is on track for first production in the second quarter of 2027, CEO Martino De Ciccio said.
He stated in an interview at the Investing in African Mining Indaba this week that the company is now fully funded with $955 million (R17.74 billion) in financing and equity, and construction has started at the mine. He noted that they also have sufficient financing headroom for further exploration of 50 targets, excluding the two ore bodies where production is set to begin.
Other gold mines being developed at present include Kibali Gold Mine in the Democratic Republic of Congo, commissioned last year by Barrick Gold and AngloGold Ashanti, the Ahafo North Project in Ghana, which is expected to reach production this year from Newmont Corporation, and the further expansion of Boddington East mine in Australia by Newcrest Mining.
Various speakers at the Indaba noted that there has been insufficient new gold mine development in the last few years to meet burgeoning demand, which De Ciccio attributes to very little exploration for new deposits by the industry in two decades. Average recoverable grades have declined significantly across the world, and new ore deposits are often deep and can only be mined at great cost.
The volatile gold price has also played a role in the ability to mine new deposits, along with factors such as environmental concerns, regulatory environments, and geopolitical factors.
De Ciccio explained that their financing package includes a $625m gold stream and a $75m senior facility from Wheaton, alongside a $75m redeemable subordinated gold stream and a $50m loan facility from Zijin. He noted that the project enjoys robust shareholder backing from the Lundin Group and Zijin Mining.
The Koné strip mining project has an estimated 16-year mine life, with production estimated at 300 000 ounces per year over the first eight years.
The project is located about 470 km north-west of Abidjan, the commercial capital of Côte d’Ivoire, in an area that is becoming well known globally as a new mining region. The project, which borders Tongon Mine, a key asset of the Barrick Gold group, will employ around 2 000 people during construction and 1 000 when it is fully operational.
The intention is to improve the grade by up to 50% and increase production to one million ounces per year over time, he said.
The plant infrastructure will be able to process 11 million tons of ore per year, making it one of the largest gold processors on the continent. He stated that the project is robust financially and should be profitable even with lower gold prices of $1 550 to $1,800 per ounce. On Wednesday, gold was trading at $2 855.50 per ounce.
Regarding the exploration of the other targets, De Ciccio said they expect to publish their resource estimates in the next quarter. He added that one of the benefits of their financing arrangements is that they can pay it off in a short period, and the mine will not be locked into life-of-mine payments lasting 15 to 16 years. The project feasibility study was completed last January.
De Ciccio, who at 38 is probably one of the youngest mining company CEOs in the world, mentioned that their biggest challenge so far was to start construction in October, after the rainy season, which also meant getting all the permits and environmental permissions in place. If there had been any delay, they might have had to wait another year before starting construction, he said. The rainy season typically occurs between April and October.
He stated that the Koné project had been very carefully scrutinised by its funders and shareholders, and all of them had approached the project plans with a high level of confidence.
He mentioned that their management team comprises key individuals who were responsible for the successes of Endeavour Mining, Lundin Gold, and Red Back Mining.
Total annual gold demand reached a new record high of 4 974 tons last year, driven by strong central bank buying and growth in investment demand, according to the World Gold Council’s latest Gold Demand Trends report. Record high gold prices and volumes resulted in the highest ever total value of demand at $382 billion, the report found.
Total gold supply has been increasing only slightly over the past few years, with West African nations growing in importance and several now firmly within the top 20 nations. South African production has continued to steadily decline.
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