Akobo Minerals addresses operational challenges and advances towards production
OSLO, 2 May 2024: Akobo Minerals AB (Euronext and Frankfurt: AKOBO) (OTCQX:AKOBF)
Akobo Minerals, a leading gold exploration and mining company based in Scandinavia with operations in Ethiopia, today provided an operational update highlighting important progress made in solving recent challenges with nationwide fuel supply disruptions and new customs procedures, finally enabling full site activity. Production start-up is as such delayed to July/August, but with the latest mine plan showing a significant revenue potential of 20 MUSD in the first few months of full production. The company informed about strategic initiatives started to evaluate ways of increasing efficiency in production and further reduce operational risk, in addition to strengthening local management capacity.
Key highlights
- Successful restructuring of debt obligations: Debt obligations, with respect to the gold bond financing, restructured with Monetary Metals. All former convertible debt converted to equity, resulting in only long-term debt to Monetary Metals remaining
- Successful funding and strategic evaluation: Funding secured and strategic discussions and evaluations underway with key industry players to mitigate risks and improve production efficiency to capture the significant short-term potential seen in the updated mine plan
- Strategic hiring: Seasoned local management consultant Wondwossen Zeleke with experience in Ethiopian mining and oil industry, including 15 years of leadership at Lundin's Africa Oil in Ethiopia and highly relevant experience from the Midroc Legadembi gold mine, joins the team
- Fuel supply agreement Fuel supply agreement signed with Ethiopian National Oil Company for direct sourcing and improved reliability; awaiting final license from Ethiopian Petroleum and Energy Authority
- Sourcing and logistics agreements: Collaboration with Leeder Industrial and Airland Logistics builds supply chain resilience. Organisational changes have allowed for an increased focus on finding local suppliers that can meet price and performance requirements
- Updated mine plan: The updated mine plan shows significant enhancements, including a 9 MUSD EBITDA improvement in the first 12 months of mining, and a revenue potential of 20mUSD (approx. 10.000 oz) the first few months of full production
- Beneficial gold price trends: Favourable gold price trends have significantly increased the value of the Segele resource compared to previous financial estimates
Operational update
The unforeseen nationwide diesel shortages and customs changes for duty free imports significantly impacted operations in recent months. Contingency plans were made, but the rapidly evolving situation proved more challenging than anticipated. With government support, these issues have been resolved for now.
The commissioning of the main plant has begun in some areas, with plans being made for Universal Power's arrival to commission generators. The remaining electrical cables are ready for connection, with progress being made on finalising diesel infrastructure and TSF membrane.
Production start-up timing is still uncertain but expected pushed to July/August. Efforts continue to finalize the processing plant and access the ore body. The arrival of critical mining equipment after a prolonged customs delay enables full ramp up of mining activities at site. The company has actively reduced site activity to minimize cash burn rate in the delay period.
As production increases and positive cash flow is achieved, Akobo Minerals will refocus on exploration to maximize project value.
For more information
Jørgen Evjen, CEO, Akobo Minerals
Mob: (+47) 92 80 40 14
Mail: [email protected]
LinkedIn: www.linkedin.com/company/akobominerals
About Akobo Minerals
Akobo Minerals is a Scandinavian-based gold exploration and boutique mining company, currently holding an exploration license covering 182 km2 and a mining license covering 16 km2 in the Gambela region and Dima Woreda, Ethiopia. The company has established itself as the leading gold exploration company in Ethiopia through more than 13 years of on-the-ground activity, which has now been enhanced further with the development of its Segele mine.
Akobo Minerals’ Segele mine has an Inferred and Indicated Mineral Resource of 68,000 ounces, yielding a world-class gold grade of 22.7 g/ton. Still open to depth, the gold mineralised zone continues to expand and will have a positive impact on future resource estimates and the life expectancy of the mine. The exploration license holds numerous promising exploration resource-building prospects in both the vicinity of Segele and in the wider license area.
Akobo Minerals has an excellent relationship with local communities all the way up to national authorities and the company places environment and social governance (ESG) at the heart of its activities – as demonstrated by a planned, industry-leading, extended shared value program.
Akobo Minerals has built a strong local foothold based on the principles of sound ethics, transparency and communication, and is ready to take on new opportunities and ventures as they arise. The company is uniquely positioned to become a major player in the future development of the very promising Ethiopian mining industry. The company is headquartered in Oslo and is publicly listed on the Euronext Growth Oslo Exchange and the Frankfurt Stock Exchange under the ticker symbol AKOBO. For US investors, Akobo Minerals AB (OTCQX: AKOBF) is traded on the OTCQX Best Market, adhering to high financial standards, best practice corporate governance, and compliance with U.S. securities laws. Additionally, the company has a professional third-party sponsor introduction, and investors can access current financial disclosures and Real-Time Level 2 quotes for the company on www.otcmarkets.com.
Akobo Minerals places great emphasis on meeting and exceeding industry standards, fully complying with all aspects of the JORC code, 2012. For detailed information on their adherence to this code, please refer to https://www.jorc.org/. Akobo Minerals' unwavering commitment to ethical practices, community engagement, and environmental responsibility positions them as a formidable force in the evolving landscape of the Ethiopian mining sector.
