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Chifeng Jilong receives approval for acquisition of Wassa mine

China’s Chifeng Jilong Gold Mining has received Ghana’s approval to proceed with the acquisition of Golden Star Resources, which owns 90% of the Wassa gold mine in the country’s southwest.

The Ghanaian government, which owns the remainder of the mine, expressed “no objection” to Chifeng becoming the controller of Wassa, Golden for $470 million in cash. The 30-year mining lease for Wassa, which produced 168,000 ounces of gold in 2020, expires in September 2022. Chifeng has said that is not a concern, as the Ghanaian Ministry of Lands and Natural Resources had said it would approve an extension if an application for one is made.

Mining capacity

The Chinese company tried buying last year another gold mine in the country — Resolute Mining’s (ASX, LON: RSG) Bibiani gold mine. However, the deal fell flat after Ghana suddenly cancelled the mining lease, ordering Resolute to halt operations.

Chifeng walked away, even though the lease was subsequently restored, and the mine was later acquired by Canada’s Asante Gold (TSX-V: ASE). Outside China, Chifeng already operates the Sepon gold and copper mine in Laos and in September agreed to invest A$2 million ($1.5 million) in Australia’s Metalstech.

Thanks to the scale of the historical open pit mining operation the processing plant has significant excess capacity and is currently only running at 70-80% (based on 2020 actuals) utilization. Development of the large inferred mineral resource which comprises the southern Extension zone, was the subject of a Preliminary Economic Assessment which was included in the March 2021 Technical Report. Given the scale of the resource at Wassa, the Company is exploring the potential to increase the mining rate in order to fill the mill.

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