Toubani: Building West Africa’s next multi-million-ounce gold mine  

When talking about a “powerhouse”, most would automatically think China or the United States, but when it comes to mining, West Africa is very much in that league given its fertile and vast mineral resources. 

West Africa hosts some of the largest geological belts, particularly in the gold space with the Birimian Greenstone Belt one of the most prospective.

Birimian rocks are major sources of gold extending through Ghana, Côte d`Ivoire, Guinea, Mali and Burkina Faso. Deposits that host these rocks can be found in corridors spanning 10 to 15km wide. 

The Birimian Greenstone Belt hosts over 300 million ounces of gold and multiple million-ounce mines and projects. 

Yet it remains underexplored.

Mali’s largest economic contributor is gold. The country is Africa’s third largest producer of the safehaven metal and output continues to grow. 

Gold accounts for over 80% of the country’s exports, with more than US$7 billion ($10.8 billion) worth shipped in 2022. 

“Every time I get off the plane in Mali, in Bamako, I’m reminded of how much of a powerhouse of a country it is in terms of its mining industry – from supply chains to its workforce, its industries are really mature,” Phil Russo, CEO of West Africa-focused explorer Toubani Resources (ASX:TRE), tells Mining.com.au.

“And the institutions of mining — whether it’s government institutions or associated agencies, or major mining houses — have all been there for decades. So it’s no flash in the pan country.”

While it’s true many explorers can be gun shy about making advances in Africa, the best way to gauge the potential success and opportunities of a region is to look at just who is making inroads. 

In Mali for example, significant investments have been made by the likes of Barrick Gold (NYSE:GOLD), Resolute Mining (ASX:RSG), B2Gold (TSE:BTO) and Allied Gold (TSE:AAUC), which are all either undertaking or planning further development and expansion in the country after many years of operating in the country.

Russo says there’s a significant amount of exploration and mining dollars flowing into West Africa.

“There’s always going to be a suite of acquirers or capital providers for advanced scale, low-technical risk development assets,” he says. 

“What I know for a fact is there are few assets coming through the pipeline, but there is always a suite of capital in West Africa like there’s a suite of capital in Australia.” 

“What I know for a fact is there are few assets coming through the pipeline, but there is always a suite of capital in West Africa like there’s a suite of capital in Australia.” 

Toubani owns the advanced Kobada Gold Project, where resource definition drilling has just been completed that will pave the way for improved confidence in the resource and underpin studies for the definition of a new reserve.

The company recently added to its coffers with a $4 million equity injection to complete a larger-scale Definitive Feasibility Study (DFS).

The aim of the recent drilling campaign was to shift more of the inferred ounces into the higher confidence indicated category. 

Over 60% of the current 2.4-million-ounce contained resource is already in the indicated category, while the remainder is inferred. 

“We’ve got 500,000 ounces of oxide in inferred,” Russo says. “We’re trying to put a component of that into indicated to inform our reserve studies, and those drilling results that we’ve had success with are part of the plan to deliver.”

During the first quarter of 2024, Toubani undertook a 10,000m drilling program that returned several near-surface, high-grade gold hits, including a previously reported peak intercept of 2m at 178 grams per tonne (g/t) from within a broader 19m at 20.6g/t from 105m.

The resource definition drilling program could increase the mining inventory available in the DFS, which is slated for release in Q3 2024.

Unlocking the next Siguiri

The same rocks that underpin Toubani’s Kobada Project can be found in AngloGold Ashanti’s 85% owned Siguiri Mine in Guinea, which has a resource of 9.2 million ounces. 

Russo says Kobada is demonstrating similarities to AngloGold’s long-running operation. 

“[Siguiri] started production 20 years ago and it’s still going today. It’s a low-grade, large-tonnage project and there’s a lot of similarities between that and Kobada.”

“[Siguiri] started production 20 years ago and it’s still going today. It’s a low-grade, large-tonnage project and there’s a lot of similarities between that and Kobada,” he explains.  

“If you look at some of these mature big mines in West Africa, they start off as these oxide projects. They get off the ground and they keep on giving returns for a long time.

“That’s a nice analogue, I guess, of what we could be one day and the geology out there in the Siguiri Basin.”

The Siguiri Mine is a multiple open pit fresh rock and oxide gold mining operation.

According to Toubani, Kobada has the hallmarks to become an operating mine at a low technical risk profile.

The 2021 DFS targeted an operation producing around 100,000 ounces per annum, at a mining rate of 24Mtpa and processing rate of 3Mtpa. It also outlined estimated stockpiles of about 18Mt over the first 10 years. 

But the update will focus on a bulk mining approach feeding an initial oxide plant that supports a relatively lean and competitive capital expenditure for a larger throughput project.

Oxide ores are usually found closer to the surface, making them amenable to bulk open pit mining but they require scale to make them economic. 

Toubani says oxide-dominant projects at scale offset grade, achieving wide operating margins and strong cash flow profiles.

“We want to deliver a really robust feasibility study that will hopefully show a larger Kobada project producing at low cost given the soft rock nature of the deposit,” Russo explains.  

Softer ore supports lower all-in sustaining costs and better economic outcomes.

“You get into the fresh rock or you find new oxide discoveries and you blend them in with your oxide material for an easier ride when you’re processing,” Russo says.   

Toubani undertook its focused resource definition drilling program to test key areas of near-surface, open pittable oxide mineralisation which falls within or immediately adjacent to preliminary pit designs.

The results revealed the existence of shallow high-grade mineralisation in these areas.

Russo says the drilling program was designed to derisk, convert and unlock the compelling value in the Kobada deposit. 

Community and government backing

The Kobada Project is located in the Sikasso administrative region in southern Mali, near the border with Guinea, 126km from Mali’s capital Bamako.

Southern Mali is considered to be a stable environment, with the mining industry concentrated in the region.  

Russo says he looks for two things when on the hunt for a project abroad.

“Does the local community support the project? In our case they do, and in West Africa generally you get local community support. You can’t really say that about everywhere in South America for instance,” he says. 

“Secondly, the other ingredient you need is government support for the mining industry. Mali has got mining codes that they update from time to time, but they are established mining codes and laws that you can use to frame your investments in the country.

The rest of the stuff you read and see are just challenges you have to navigate your way through. I am happy to be in Mali. All these countries go through turbulent times, you’ve just got to find a way to keep advancing your asset.”

Write to Angela East at Mining.com.au 

Images: Toubani
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Written By Angela East
Managing Editor Angela East is an experienced business journalist and editor with over 15 years spent covering the resources and construction sectors and more recently working as a communications specialist handling media relations for junior resources companies.