Two years after acquiring its first mineral properties in Mali, Toronto-based Avion Gold Corporation has gone some way towards its goal of producing half a million ounces of gold a year. COO Andrew Bradfield talks to Gay Sutton about progress so far.
Why start from scratch and reinvent the wheel? That was the thinking of Toronto-based Avion Gold Corporation in early 2008, and the strategy has proven successful. The company’s long-term vision, according to COO Andrew Bradfield, is to become a significant player in the gold mining sector, producing half a million ounces of gold a year. Now, just two years after acquiring its first concession, the company owns five gold bearing mineral properties, four in Mali and one in the neighbouring country of Burkina Faso. Mineral resources currently stand at 3.3 million ounces and that is likely to increase significantly if the results of recent exploration are anything to go by. Some 75 per cent of exploration drillings have intersected gold; new mine development sites have been identified; and resources across all five properties are progressively being evaluated upwards.
Avion’s first acquisition, however, was critical to this success. With the entire world as a shop window, Avion set out to find a property that had previously been in production, and would therefore have site infrastructure in place. Tabakoto and Segala in Mali appeared to be a perfect match. In early 2008 they were lying dormant, but their previous owners had been producing 101,000 ounces of gold from them over a 20 month period. “We saw this as a great opportunity. It was a huge time-saver overtaking a grassroots property from basic exploration into production,” explains Bradfield.
Avion acquired an 80 per cent stake in the two properties in May 2008—the remaining 20 per cent being retained by the Mali government. “Our strategy at that time was to undertake exploration, firm up the mine plan and get the properties back into production quickly.”
A large programme of exploration was initiated at Segala and Tabakoto in 2008, and continued through 2009, which increased the measured, indicated and inferred resources from just under one million ounces to 2.6 million ounces.
Based on the exploration findings, the mine plan was to convert the existing and planned open pit mines on both properties into underground mines. “Our new resource model showed that the open pit potential—particularly at Tabakoto—was shallow and that the real future of these deposits was underground,” says Bradfield.
Meanwhile, the strategy for getting the plant up and running began with a productivity improvement campaign. Using a core of staff who had worked for the previous company, Avion focused on studying and removing bottlenecks at the processing plant, improving both the recovery rate and tonnage throughput. In parallel with this, work was done to increase capacity of the tailings dam, and the hunt began for a mining contractor. “And this proved to be quite a challenge,” says Bradfield.
“We planned to operate the mines as open pits for just two years and then to go underground,” he continues. “Most mining contractors like to work with a mine life of at least five years as they have to purchase equipment and then depreciate it.” Avion, however, struck lucky. A Malian contractor had purchased equipment for a project in Senegal which was then cancelled. “They found themselves with a whole fleet of equipment and no project for it. We hired them, and it’s worked out well for both of us.” Avion’s gold production commenced in February 2009.
It has not always been that easy, and much has been learned along the way. “One of the first things we came to terms with was the rate at which paperwork moves through various government ministries,” says Bradfield. “We therefore employ an ex-ministry person whose sole job is to keep in touch with the ministries and make sure our paperwork and applications are progressing through the departments.”
2010, however, has been a period of expansion for Avion. “Our short-term objective is to double the existing plant capacity at Tabakoto from 2,000 tonnes per day to 4,000 tonnes per day to meet the needs of our expansion programme,” explains Bradfield. Around $50 million is being invested in an extension to the Tabakoto plant, and the installation of a new SAG mill and ball mill to double the current capacity. Construction is due to commence in 2011 and the new plant should be up and running in 2012.
Meanwhile, the company has continued to focus on its long term vision by engaging in an aggressive programme of acquisition. In January 2010 the company acquired Kenieba—a property lying adjacent to Tabakoto—from Great Quest Metals. That was followed by the acquisition of Axmin’s Kofi concession lying some 50 kilometres away, and then in July the deal was completed for Hounde, in neighbouring Burkina Faso.
This year has also been remarkable for the success of Avion’s exploration. “We have an extensive $12 million exploration programme underway on all our properties, including the most recent one in Burkina Faso,” Bradfield says. “Our total resources to date stand at 3.3 million ounces. But with some rigs still drilling and a considerable number of assays still outstanding, there is more to come. ”
Currently around 75 per cent of drill holes have intersected gold and many have the potential for development. “Dioulafoundou, for example, is very close to the process plant and has yielded some fantastic results, with grades up to an average of six grams per tonne in the largest of the open pit zones,” he reveals. “And it’s very rapidly shaping up to be an open pit mine with the potential to go underground.” Development of the site has already begun, permits have been acquired and the site is fenced off and ready for mining.
“Our plan for the rest of 2010 is to complete this round of drilling by August, analyse the results and set out new mine plans by the end of the year.” In the long term, the programme of exploration will undoubtedly continue, year on year. The company is also looking to make further acquisitions in the region of West Africa, building on the experience and knowledge gained over the past two years and utilising the upgraded infrastructure at Tabakoto. With significant successes under its belt, Avion has certainly gone some way towards achieving its vision of producing half a million ounces of gold a year.www.aviongoldcorp.com
