In 2014, Tietto Minerals first took notice of an area in Abujar, Côte d’Ivoire, the land showing prospective signs of mineralisation through some unorthodox activity. Today, after an incredibly fast turn-around, this same land holds an active gold mine site that has been developed and constructed by Tietto Minerals and the companies it called in from scratch, and it is nearing completion. We caught up with Caigan Wang, Managing Director, to hear how Tietto achieved this, how the operation is going, and what results the company is looking forward to from its first fully operational site.
Located approximately 30km from the major city of Daloa, the Abujar Gold Project is, according to Tietto Minerals, set to be West Africa’s next major gold mine. Now fully financed, the mine’s current lifetime revenue is predicted to be US$2.87 billion (at a US$1,700/oz gold price), with first gold expected to be fully mined and processed by Q4 this year, and 260,000oz of gold to have been produced by 2023. We asked Caigan about whether Tietto had experienced any difficulty in finding funding – especially given the recent state of the word – but with gold prices as they are, appetites for such investments are hungry.
“For us, the challenge was not finding project financing,” Caigen explained; “The challenge was finding which financer we wanted to work with. If you look at how fast we progressed the project from scratch to where it is now, you will see that we needed to find financial providers who were able to meet our fast mine construction schedule.” Being able to turn offers of finance away, in favour of holding out for the perfect match, is a desirable situation to be in. The company pivoted the development of the project to full equity funding in order to speed up the journey to first production, and to accelerate development in a flexible structure at significantly lower cost. Caigen explained that Tietto had spoken with over a thousand interested potential financial providers, all differing in the type of financial service they offered, how this financing would be structured, and crucially, their time-frames. Finally, Tietto found its perfect pairing in Taurus: “Taurus works very fast too, so we match very well.”
Operating at a CapEx of 30% self-funded, 70% financed, and with the recent acquisition of US$114 million funding this year and AU$85 million the year before that (A$130 million total), the project is now not only fully funded, but also nearing the end of construction. Not only this, its Definitive Feasibility Study was completed recently, in October 2021, with the following results: in total, the site has a Mineral Resource of at least 3.35 million ounces of gold, with Ore Reserves of 1.4 million ounces. The mine is expected to be able to yield more than 200,000 ounces per year for the first six years of production, and investors are expected to receive their first financial return on the project after only its first year of production. All of this makes now an exciting period for Tietto, Taurus and the mine’s investors, and whilst its current mine-life is only officially rules at 11 years, further exploration and data suggests a probable life of over 20 years.
So, where did it all begin? “It was early 2014 when I was introduced to the area,” Caigen told us. “At that time, there were many artisanal miners doing illegal mining activity there, so, frankly speaking, the area’s mineralisation was discovered by the illegal miners.” This was an unusual-seeming, yet extremely informative way to stumble upon a land’s potential! The artisanal miners would not have wasted their time on an area with nothing to yield, and these particular illegal miners were in no small numbers, either: “We had 20 thousand illegal miners there. The pattern of the miners made it quite clear that they were digging along a few kilometers of strike area. So, it wasn’t random – it showed regular patterns. This gives you an indication of the mineralisation structure there. All in all, seeing this made us act quickly.”
With origins like this, the story of the Abujar Gold Project raises the question of its relationship with the local communities. Always an essential element in establishing a responsible mining operation, such relationships are even more important to navigate carefully when the land acquisition for a mine has, in its early stages, put an end to the unlawful activities of this many local artisanal miners. We asked Caigen about Tietto’s relationship with its mine’s local community, and his answers were extremely positive:
“The local community has been very supportive because they see us doing mining in a legally informed manner. Every step that we take, we inform them first. This means they understand that we are not simply digging the gold and leaving nothing to them – they see that this is a properly run operation.” This communication is key: for some locals, their land has been purchased by Tietto Minerals, and for others who maintain ownership and use of their land, it may be adjacent to or nearby to Tietto’s activities. In both cases, transparency and responsibility are key, and in contrast to the disorganised activities before, the people of Abujar are able to experience that Tietto provides all of these. The local community’s acceptance of Tietto is a testament to its success in delivering his, and it isn’t through accident, but the careful effort of a dedicated team. “It’s quite a big team working with the communities. In our CSR department, we have about a half dozen staff working on this area.”
“If there are any damages or potential damages, they are communicated to them and they are compensated.” This communication and compensation are paramount, but it is not simply a case of doing them, but doing them correctly and considerately: “Since 2014, every year, we have two or three community gatherings in which to discuss compensation. We approach these discussions with respect, as we do with the individual cases of compensation.” Caigen went on to explain that, say, if a tree was or may be damaged, the compensation required would be calculated “with respect to their local cultures as well as their economic value.” In other words, what it means to the people, both emotionally and symbolically, as well as its practical place in their way of life, is taken into account as much as monetary factors. This approach required an understanding of the local community and its culture, and is also – if done correctly – a far better way to earn trust from the people it is addressing and reaching out to. It shows respect and a willingness to listen which, in turn, inspires trust.
“The way I see it,” Caigen shared with us, “A mining company is only one part of a larger chain. From the Ministry of Mining and the Department of Commerce through to the local communities, our investors and our shareholders, we are only a part of this chain. So, we make sure that we are not only looking out for the interests of our shareholders. Of course, we definitely want to maximise the shareholders’ investment return, but we also make sure that we pay sufficient attention to other stakeholders – particularly the local communities.” This care and attention for the affected locals is both viewed in the short-term and long-term: “Gold resources are not renewable. When the mineral is mined out, you’ve damaged the land, so what are you doing to do? So, we consider their interests as a critical part of our business as well.”
As well as clear communication, bonds of support have been built between Tietto and the local communities through employment: as is usually the case, a new mining project means many vacancies, and except in cases where particular qualifications are required, Tietto makes sure to hire the vast majority of its team locally. “We also have registers for the local people to express their interest in working with us, so when a vacancy comes up, they are the first on our list to be employed.”
Trust has also been earnt through the process via which Tietto Minerals approached and completed the Land Acquisition stage of its project development. ” The land acquisition process we have just gone through was very well supervised by a specialised team. That entire process was finished a few weeks ago, in a very culturally sound way.” The way this process was navigated by Tietto was, Caigen believes, a first for the country of Cote d’Ivoire – when purchasing the land, the company set up a method that supported and enabled the area’s landowners in the management of the funds they would receive. Some of the funds, they would have immediate access to, another portion was available for withdrawal monthly over a period of 180 months, and the final portion would be made available to them once they presented a viable business plan of how they intended to earn money in the future – i.e., by starting a chicken farm. This process protected locals from immediately accessing and potentially wasting or losing their funds before they had a viable next step in place, and also empowered them in assisting them in thinking about how they would move onwards without their land and, eventually, without a potential job in mining.
The Abujar Gold Project is certainly the main focus for Tietto Minerals’ efforts at the moment – the first production mine for the company to have developed from scratch, it will continue to hold much of Tietto’s attention as those first gold yields come in. However, it is not Tietto’s only project – like any good mining company knows, when playing the long game of this industry, revenue must come from multiple sources – especially when the market can fluctuate as it does. To this end, the company is also constructing a CRL processing plant, which it predicts will be completed at the end of this year, at roughly the same time as the Abujar mine. As well as this, the company has been undergoing what Caigen described as an “aggressive resource growth”, investing in equipment such and diamond core rigs that allow not only faster exploration and extraction in their current property, but also mean that, should they acquire a new site, exploration can begin quickly here as well. “That’s what we’re doing now. So, in short, we’re running in two lines – we’re building the mine, and at the same time, we’re aggressively growing the resource.”
Tietto is already actively scouting its surrounding area for a second potential project. “We are not really looking for someone to buy us, so it is natural to look for future projects. If a good opportunity comes, it would be good to seize it and reposition ourselves as a mine developer. From our experience of building this project from scratch within the company, we can hopefully repeat the process.”
With established experience in how to execute a full development project, and the resources in place to be able to swoop into action, Tietto is in the perfect position to expand its portfolio. In the meantime, however, this year is already an exciting time – one in which the fruits of its labours from the past eight years will finally come to bear. Like any company that knows how to keep moving forwards, it is already looking to future projects even as it prepares to reap these rewards, but it is those rewards themselves that will be exciting to see come in at the end of this year, bringing good news not only for Tietto and their investors, but also the local people employed and supported by the company and the continued outreach it has in place.