Shares Outstanding: 36,301,000
Market cap: $6,500,000
Asante Gold Corp (ASE:TSX Venture) is a junior exploration company, led by a veteran management team, and focused on bringing the Kubi gold project in Ghana to near term production (see project map below). We’ve been following Asante Gold since 2014, when it acquired the Kubi prospect, waiting for the company to deliver the catalyst which would place it onto our JMP Radar. That catalyst arrived on October 17th, 2016 in the form of a $19.5 million Joint Venture with Beijing Fuxing Xiao-Cheng Electronic Technology Stock Co. Ltd. (BXC), a $580 million Beijing based power grid infrastructure and resource development company.
Initially BXC will become a 30% shareholder in ASE via a private placement of 16.5 million units at 0.20/unit for $3.3 million. To earn it’s 50% in the joint venture, BXC has agreed to fund $19.5 million toward development of Kubi toward production.
Asante estimates that over US$30 million has been spent on Kubi since the mid 1980’s. The project hosts a current NI 43-101 Measured + Indicated resources of 233,000 oz Au @ 5.48 g/t; inferred 115,000 oz @ 5.31 g/t.
Management estimates the project will produce 30,000 to 40,000 ounces per year (500-650tpd processing at mill located nearby). Kubi boasts a low CAPEX of $20 million to bring it into production, which is expected to be covered by the newly formed JV.
- Ghana is the second largest gold producer, and has one of the best jurisdictions for mining in Africa. The Kubi project is located approximately 25 km south of AngloGold Ashanti’s Obuasi mine (34 Moz resource estimate), and approximately 18 km north east of Perseus Mining’s Edikan gold mine (7 Moz resource estimate).
- Asante has a strong management team, headed by 50 year industry veteran Ned Goodman (founder, Dundee Capital), and spearheaded in the field by CEO Douglas MacQuarrie. Mr. MacQuarrie has been operating in Ghana since 1993, and has a track record of developing over 6 Moz of resources. He was the CEO of PMI Gold, which was acquired by Asanko Gold (TSX: AKG) in 2014.
- Obuasi’s ex Mine Manager is currently a Director and Vice President Production & Development of Asante.
- Gold prices are up significantly YTD and has been one of the best performing commodities this year. Several catalysts exist for the price of gold to continue its ascent. In addition, Goldman Sachs, Citibank and other major investment banks have been raising their 3, 6 and 12 month projections for gold.
Disclosure of Interest and Advisory Cautions: At the time of this writing, the author does not hold shares of Asante Gold Corporation. Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. The author of this report is not a registered broker-dealer or financial advisor. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. The author’s views and opinions regarding any publicly traded companies in this report are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. The author of this report does not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Companies mentioned in this report have not reviewed the content of this report prior to publication. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect. Please read the entire Disclaimer carefully. By using this report, and whether or not you actually read the Disclaimer, you are deemed to have accepted it. Information provided is educational and general in nature.