Top Producing Countries in West Africa

We recently explored the untapped potential of mining stocks with assets in West Africa. We now look at some of the top regions in West Africa where one can make their investments. These are mining friendly countries, growing economies, and the regions themselves have a lot of Gold in the ground.

Top Producing Countries

The goldfields in West Africa run across several countries including Burkina Faso, Ghana, Gambia, Nigeria, Sierra Leone, Liberia, and several other countries. There are however a few standouts between these countries that are among the top gold producers on the African continent and in the world.

Ghana

As one of Africa’s top gold mining countries, Ghana took over the top spot from South Africa after mining for more than 142 metric tons of gold in 2019.

Here, both traditional mining companies and artisanal miners contributed to Ghana’s gold production. Some of the largest mining companies in Ghana include:

• Kinross Gold (Chirano mine)
• Newmont Goldcorp (Akyem and Ahafo mines)
• AngloGold Ashanti (Obuasi and Iduapriem mines)
• Gold Fields (works the Tarkwa gold mine)
• Asanko Gold (Asanko mine)

Gold accounts for 90% of Ghana’s total mineral exports and it’s estimated that Ghana’s gold reserves are 1,000 metric tonnes.

Mali

Mali produced over 71 metric tons of gold in 2019, an increase of 10 tons compared to 2018. As a result, it’s the fourth biggest gold producer in Africa. Like Ghana, Mali’s gold mining operations include mining companies and artisanal miners who make a significant contribution to the country’s gold economy.

Some of the gold mines in Mali include:

• Morila (managed by the Government, AngloGold Ashanti, and Barrick Gold)
• Sadiola (managed by the Government, AngloGold Ashanti and LamGold)
• Loulo-Gounkoto (managed by Barrick Gold)
• Yatela (managed by the Government, AngloGold Ashanti and LamGold).

It’s currently estimated that Mali has 800 tonnes of gold reserves.

Burkina Faso

As the 5th largest gold producer in Africa, Burkina Faso produced 62 metric tons of gold in 2019. Because, in addition to gold, it also produces copper, zinc, limestone, manganese, and phosphate, it has one of the most dynamic mining sectors in West Africa.

Some of its gold mining operations include:

• Kalsaka (operated by Banlaw Africa Limited)
• Youga (jointly operated by the Government and Etruscan Resource)
• Karma (operated by Endeavour Mining), Mana (operated by Semafo)
• Yaramoko (operated by Roxgold)
• Taparko-Boroum (owned and operated by Société des Mines de Taparko SA) Essakane (operated by IAMGOLD)
• Inata (jointly operated by the Government of Burkina Faso and Avocet).

It’s estimated that Burkina Faso currently has gold reserves of about 154 metric tonnes.

Is West Africa the Future for African Gold?

From the above it’s easy to see why gold mining companies are investing millions in West Africa. In fact, there has been a massive increase in investment in existing and new gold mines in the region. A number of mining stocks listed on the TSXV have participated in the West Africa boom and acquired assets in the region.

Although Ghana is the top producer in the region, much of the attention is focused on Burkina Faso because it boasts increasingly significant mining potential.

For example, Endeavour mining acquired the Karma mine in Burkina Faso in 2016 and it first started producing gold in April of that year. During the second quarter of 2019 this mine produced 21,000 ounces of gold. Endeavour also owns the Hounde mine which was expected to average between 250,000 and 250,000 ounces of gold in 2019.

More importantly, though, is that Endeavour recently acquired all of the issued and outstanding shares of Canadian gold producer SEMAFO which makes it one of the top 15 gold producers globally, and the largest gold mining company in West Africa. Clearly, Endeavour is seeing the potential in the region.

And Endeavour is not the only company seeing the potential. Russian gold mining company Nord Gold UK Societas, or Nordgold, is looking to list on the London Stock Exchange as early as the summer of 2021 and its initial public offering could be valued at more than $5 billion, which would make it the largest mining company to float globally in at least five years.

Nordgold owns three operations in Burkina Faso that have proven reserves of 1,972koz, 1,696koz, and 483koz, respectively.

This increased mining operations will require more technical skills and create job opportunities, which will ultimately benefit the West African economy and makes for a bright future.

Conclusion

When investing in West Africa, particularly in gold mining stocks, looking for exploration stage assets gives the highest potential for a multi-bagger return. With our prior picks going as high as 400% since we initiated our research reports, there is no doubt small cap stocks can deliver phenomenal returns.

We remain highly bullish on Nexus Gold Corp (TSXV:NXS). Nexus Gold has 11 assets, the majority of which are 100% owned, spread across Canada and West Africa. Their assets in West Africa encompass a staggering 750 sq km, aka district scale property. Their recent drill results in their Dakouli 2 property was a discovery of an asset. The company recently announced further exploration with a reconnaissance program at Manzour-Dayere.

The Manzour-Dayere Concession is located along the Boromo Greenstone belt, an early Proterozoic Birimian sequence of the West African Craton, that is home to several significant gold deposits.  Situated in southwestern Burkina Faso, near the border with Ghana, the area is home to several producing mines, including Yaramoko (Roxgold), Hounde (Endeavour), Poura (Newmont), Bondi (Sarama).

The program will also look to expand the gold mineralization that has already been identified in the Northeast corner of the property and returned results of 9.60 grams-per-tonne (“g/t”) gold (“Au”), 7.07 g/t Au, 5.73 g/t Au, 3.84 g/t Au and 2.84 g/t Au (see Company news release dated February 27, 2020).

In a region like Burkina Faso, where anywhere from 0.50 g/t to 1.50 g/t Gold is economic, the potential here is not to be underestimated. Our report analyzes this in dept and demonstrates it is the cheapest relative to the comparables by market capitalization. The stock is trading at a whopping 436% discount to target value of 24 c.

NXS also has an active project in the Red Lake region in Ontario, which recently hosted a producing mine, making it the location for one of Canada’s most recent producers. For those who missed the report, you can read it here free.