Mali frees Resolute executives after $160 million deal, AFP reports
The three executives, including CEO Terry Holohan, were freed from detention on Wednesday.
The West African mining industry has seen significant fundraising activity since October last year, driven by higher metal prices and the need to meet a growing global demand for metals needed for electric vehicles and renewable energy.
For Capital (LON: CAPD), a mining service provider that has spent the last two years expanding into West Africa, lack of exploration spend, flat drilling activity and record levels of financing have created a prime scenario for companies to expand in the area.
The world’s second biggest gold-producing market zone, after China, is attracting a growing number of players, such as Barrick, IAMGOLD and Endeavour Mining, which recently acquired Teranga Gold.
Capital believes activity in the region is just taking off, as companies look to replace mine production and discover new sources of key metals amid talks of a new a commodity supercycle.
“As with any rapid increase in activity, a mismatch in demand and supply of exploration, delineation and production drilling rigs has the potential to put the mining and exploration industry in the region under significant pressure,” Capital said in a White Paper published Tuesday.
New mining codes drawn up by various countries to attract and secure foreign investment have favoured a gold boom in West Africa that is extending to the rest of the continent, including Egypt.
According to the London-listed mining supplier, West Africa saw the third largest inflow of exploration expenditure globally in 2020, behind Australia and Canada, with over $470 million invested.
The region’s exploration activity has been fuelled by the comparative lack of modern exploration campaigns used in developed markets such as Australia and North America, Capital said. Yet the region benefitted from being the world leader in exploration success, with over 50 million ounces of gold reserves discovered between 2009 and 2019, dwarfing its nearest rivals, Canada (36 million ounces) and Ecuador (24 million ounces).
The increasing need for investment towards the discovery of new orebodies and the expansion of existing resources must be paired with available, capable suppliers of mining services and equipment
Capital anticipates an increasing need for investment towards the discovery of new orebodies and the expansion of existing resources. The firm believes this time around, companies will see themselves pushed to accelerate exploration and expand producing assets than in any of the previous three supercycles of the last century.
The supplier notes the average life of mines in the gold industry have halved in the last decade, which makes the need for new discoveries greater than ever.
Miners in West Africa, the supplier concludes, face the challenge of being able to implement their ambitious exploration programs amid restrictions brought on by covid-19 and the availability of the sufficient mining services resources to meet that demand.
Capital, which generated $135 million in revenue in 2020 and net profits of $24.8 million, has drilling, mining, maintenance and geochemical laboratory projects in Burkina Faso, Cameroon, Egypt, Guinea, Mali, Mauritania, Nigeria, Saudi Arabia, Tanzania and Côte d’Ivoire.
