Aureus Mining celebrates first gold pour from New Liberty Mine in Liberia
At a time when many miners, fazed by depressed gold prices, were stepping back from production, Aureus Mining audaciously embarked on constructing a new gold mine in West Africa. In this exclusive Q&A Aureus Mining’s CEO David Reading explains how the company navigated its way through a regional epidemic and local skills shortages to launch Liberia’s first gold mine against the odds.
Stratum International: You took the brave step building the first ever gold mine in Liberia at a time when gold prices were deeply depressed and the Ebola crisis was escalating. What drove that decision?
David Reading: Aureus were fortunate in that we got our Bank Funding just before the equities market bottomed out. The gold price slumped and the Ebola epidemic hit West Africa and Liberia just six months after Aureus began construction at the New Liberty site.
While other mines suspended operations, we chose to stick to our construction schedule. The dilemma faced by senior management was whether we should stop and potentially bankrupt the company, or carry on with the build with the potential of putting our people at risk.
We introduced strict health protocols and procedures to safeguard our people from infection, and because of that, we made it through successfully with no infections.
For many mining companies already struggling against low commodity prices, Ebola was the final straw. The difference was that we had a gold project that we knew could make money, even when times were hard.
We are strong believers that by starting the project in a downturn, it positions the company well to reap the rewards in a subsequent upturn.
SI: What preventative measures did you put in place to deal with the threat of Ebola?
DR: We effectively isolated the site and had regular role calls where all staff members would have their temperatures measured with no-touch thermometers. We introduced wash stations around site and at all access points so anyone coming on site would have to wash their hands and be temperature screened before they were permitted entry.
We chartered a private plane on a fortnightly basis to move people into and out of the country safely and minimised non-essential travel within Liberia and beyond.
All the processes we put in place were audited by the United States Centre for Disease Control and Prevention and we rolled some of these process out into our local villages to help protect them too.
SI: On the successfully pouring of first gold when you reflect back what made you successful despite the challenging conditions.
DR: Our success is testament to our team on the ground. It’s the people on the ground who survived and excelled throughout the Ebola crisis, and it’s them, in conjunction with our contractors DRA Mineral Projects, Group5 and MonuRent who ensured the project was built as quickly and as successfully as possible.
SI: Liberia President Ellen Johnson Sirleaf has called for a period of reconstruction in the country. What role do you think Aureus can play in that recovery period?
As well as providing employment and training opportunities, as Aureus develops and grows in Liberia it will continue to pay taxes and royalties to the government. And as a part of our mineral development agreement we’ll continue to fund community development projects.
The mine also generates business opportunities for other local businesses and suppliers. For example we have recently awarded a fuel contract worth US$100m over the life of the project to a Liberian owned and managed fuel supplier, this not only provides secondary employment opportunities across the country but also more revenue feeds back into the local economy.
We not only generate employment at the Project. As a part of our Social Licence, our Community Development Plan has led to the creation of a number of community cooperatives which aim to become self-sustaining and will provide employment and training to the local community even once the mine has been exhausted.
These cooperatives include a brickmaking and woodworking cooperative, both of which were formed to help provide materials for the village relocation and the building of the mine workers’ accommodation.
We run a farming cooperative, where we train local people in the art of subsistence farming and we buy their vegetable products for consumption on the mine. There’s also a tailoring cooperative, which produces our safety gear.
We’ve established local adult education classes and other health and safety programmes. We’ve also built a large school in the village relocation area and pay salaries for school teachers across our licence area.
SI :The IMF placed the Liberian economy 181st out of 184, despite an abundance of natural and human resources. A Government Commission report blamed ‘a lack of effective human capital’ in the country. Is than an issue for you and if so what steps have you put in place to deal with it?
DR: During the construction phase of the project we had a number of international contractors on site who took a large portion of their workforce from the local community and provided training and certification to increase their employability in the future.
We have many training programs including high-tech mining equipment simulators that we use to train local operators in a safe environment before they graduate to driving the heavy mining equipment under supervision from experience operators. We also favor local women as mining truck operators as they are more gentle on the equipment.
Beyond that there are the cooperatives I described which are helping to develop local skills in farming, brickmaking and more. So I believe we’re making a very positive contribution to improving the skills and prospects of the local community.
SI: What’s next for Aureus Mining?
DR: Our objectives for New Liberty are to achieve commercial, profitable gold production by the end of 2015, and to sustain a production rate of 120,000 ounces per year throughout 2016.
The intention is for this mine to be a starter kit for Aureus. With the New Liberty Mine now up and running, we can dedicate more time to other projects. We already have a development and construction team in place for our second gold mine in Liberia, the Ndablama Project.
Ndablama is located about 40 kilometres northeast of New Liberty, in the northern block of our 478-square kilometre Bea Mountain mining licence. Both Ndablama and the nearby Leopard Rock target a 13-kilometre-long gold corridor, which has been confirmed through reconnaissance drilling, trenching and pitting.
Only one kilometre of this corridor has been subjected to detailed drilling so far, but is yielded stunning results. The Ndablama resource currently stands at more than 900,000 ounces at 1.7 grams of gold per tonne, or 800,000 ounces at two grams per tonne, and those ounces will only increase as Aureus undertakes more drilling along the corridor, which we plan to commence in early 2016.
SI: Exciting times ahead. We wish you good luck with all your projects.