PROJECTS AND EXPLORATION
"What also excites us
about this major success in
Ghana, is that it will provide a
springboard to access similar
projects in West Africa.
“We achieved this by working on various aspects of the project
simultaneously,” he adds. “The success of such a large and
complex project is very much dependent on the successful
interface between the various companies involved. We were
very fortunate to have DRA Global as our EPCM, as they have
excellent site management experience, so they managed the
contractor interface and all other aspects within their ambit of
responsibility,” says Uys.
“We were very pleased to complete this project successfully,
and within the allotted time,” comments Marius Botes, managing
director of Stefanutti Stocks Mechanical.
“What also excites us about this major success in Ghana, is that
it will provide a springboard to access similar projects in West
Africa,” Botes adds. To this end, the company will be establishing
a local office. “Our establishment in Ghana also signifies our
serious commitment, and sustainable approach to doing
projects in the region,” says Botes.
BARRICK’S COMBINED
STRENGTH
• Location: Senegal
• Phase: Production
• Resource: Gold
In line with its strategy of focusing on tier one assets, Barrick
Gold has completed the recently announced transaction of
combining its Massawa gold project in Senegal with Teranga
Gold Corporation’s Sabodala gold mine. Barrick and its
Senegalese partner held a 90% interest in the Massawa project.
Newmont’s Ahafo mine in Ghana.
includes increasing mill capacity at Ahafo by more than 50%,
to nearly ten million tonnes a year.
The Engineering Procurement Construction and Management
(EPCM) company managing this project was DRA Global,
a multi-disciplinary global engineering group with which
Stefanutti Stocks has worked successfully on many local and
pan-African projects. However, this was the first time that
Stefanutti Stocks has had the opportunity of working for
Newmont Goldcorp as the end-client.
As part of the transaction, Barrick and its partner will receive
an up-front payment valued at USD380-million at the
time of announcement, comprised of 20 718 273 Teranga
common shares (with a value at the time of announcement
of approximately USD80-million based on the Teranga share
price at that time of USD3.85 per share), a cash payment of
approximately USD300-million, and a contingent payment of up
to USD50-million which is based upon the average gold price for
the three-year period immediately following closing ‘three year
average gold price’.
The contingent payment, which is payable three years
following closing, is: USD25-million if the three year average
gold price is greater than USD1 450 and less than USD1 500
per ounce; USD35-million if the three year average gold price
is greater than USD1 500 and less than USD1 600 per ounce;
and USD50-million if the three year average gold price exceeds
USD1 600 per ounce.
Speaking to the completion of the project, Uys points out
that, common to projects of this nature – particularly with a
brownfields component – during execution a certain amount of
‘project scope growth’ occurred (with variations in design and
specifications), adding time and complexity to the overall project. Barrick president and CEO Mark Bristow says Massawa was one
of the largest unexploited gold deposits in West Africa and its
legacy company Randgold Resources had developed this over
a period of years to the point where its value could now be
optimally realised for the benefit of all its stakeholders which
includes the Senegal government.
“A further challenge was that of logistics. We dispatched over
200 40-ft shipping containers containing the required tools,
equipment, structural and plate steel from South Africa.
However, despite these project-related challenges, Stefanutti
Stocks Ghana is very proud to have completed the two-year
project on time,” says Uys. “Teranga is best placed to achieve this as it already owns
the nearby Sabodala mine and Sabodala’s combination with
Massawa is expected to deliver significant synergies. Barrick will
participate in the upside of the combined asset through the
11% interest it is acquiring in Teranga through this transaction,”
says Bristow.
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African Mining Publication
African Mining
African Mining April 2020
5