Asante Gold Corp. (CVE:ASE) president and CEO Douglas MacQuarrie says he is “very bullish on gold” a day after he acquired another 1 million Asante shares for $250,000 - a show of confidence in the junior gold explorer.
Since January 2, the company's shares have risen more than 18 per cent, lately trading around 22.5 cents.
MacQuarrie told Proactiveinvestors that with currency devaluation “rampant in all the old world triad economic powers” - namely the U.S, Britain and Japan – he believes there is no hope for any currency, other than gold for the foreseeable future.
Speaking to Proactive from Ghana, where he is currently assessing core from Asante's recent drilling, MacQuarrie says he thinks the best and safest leverage on gold are Canadian-listed, “generally currently undervalued” equities.
“The sweetest spot for a gold equity is a tight junior with experienced management and board control; in gold royalty - near term cash flow sector; and with high risk/high reward shots at major exploration hits. That's Asante.”
The Vancouver-based gold exploration company said that with the most recent investment, MacQuarrie owns, directly or indirectly, about 4.47 million shares, 250,000 share purchase warrants and 300,000 stock options, representing roughly 22.77 per cent of Asante’s stock, on a partially diluted basis.
Asante is currently exploring the Fahiakoba Concession located in the centre of Ghana's Golden Triangle between Perseus Mining's (TSE:PRU) (ASX:PRU) 280,000 ounce-per-year Edikan gold mine, and AngloGold Ashanti's (NYSE:AU) 315,000 ounce-per-year Obuasi gold mine.
Last September, the company said it collected final assays from a soil auger program on its Fahiakoba mining concession. Auger holes were drilled to depths of seven metres to test for blind gold mineralization within weathered bedrock below widespread alluvial cover.
Anomalous gold values ranged from 25 to 650 parts per billion (ppb), with background levels of 10 ppb gold or less. The assays were part of a 1,200 auger-hole soil geochemical drill program designed to outline additional drill targets.
Asante also stands to benefit from a deal it reached in November to buy the 1 per cent net smelter return (NSR) royalty Goknet Mining Company holds on PMI Gold's (CVE:PMV) Obotan gold project in Ghana.
The consideration for the royalty is $22.5 million, consisting of 45 million shares in Asante stock, at a deemed value of 50 cents per share.
“I am looking forward to having our shareholder meeting to approve the royalty acquisition - and moving Asante forward,” says MacQuarrie, who is also the managing director of Goknet.
MIA Investments is a private company owned by the MacQuarrie Family Trust which owns a substantial number of shares in both Asante and Goknet.
PMI Gold has previously announced that the Obotan project has a post-tax net present value of US$387 million, assuming a US$1,300 per ounce gold price, and a 5 per cent discount rate. It also has a projected post-tax internal rate of return (IRR) of 28 per cent, and a capital payback period of just under 3 years.
Start of construction is targeted for the first quarter of next year, for first gold production beginning in 2014, conditional on approvals and financing arrangements.
Average production is slated for 221,500 ounces of gold per year for the first five years, with total production estimated at 2.26 million recovered gold ounces over the 11.5 year mine life. Project revenue over the life of the mine is forecast at a whopping US$2.9 billion using a $1,300 an ounce gold price, and at US$3.61 billion using the higher price of the yellow metal.
Average cash operating costs are anticipated at US$626 per ounce, and the capital cost estimate for Obotan is US$296.6 million, including a pre-strip mining cost of US$82.2 million.