Africa is a major gold producer, producing up to 30% of global production. South Africa was the leading gold producer for many decades until the Chinese recently took over. The industry is relatively well developed here, mining costs are high and opportunities rare for new ventures.
Other areas however, especially Western Africa, offer many opportunities for the discovery and development of new mines. Tanzania and Mali are rapidly becoming Africa's newest gold producers with several mines being commissioned or in the final feasibility stages while Ghana is also a major global gold producer.
Gold mine production centers on underground and open pit operations in Achaean age greenstone belts in Ghana, Tanzania, Burkina Faso, the Ivory Coast and Zimbabwe. Exploration efforts centered on West as well as East Africa are focused on surface-weathered gold-bearing lateritic and saprolitic rock, which is very suitable for relatively economical surface mining methods.
Virgin Gold, through its joint ventures with local mining companies, has considerable exposure in this part of the world where mining costs are relatively very low. In some places here, gold can still be produced at a cost of less than USD200/oz, whereas the average global production cost for the past few years has been in the range of USD400/oz and above.
Virgin Gold is also currently involved with local mining companies to explore a number of possible mining sites in the African continent with the option for development and production in a few years time. In the African continent, it is vital that we demonstrate our corporate responsibility leadership, especially with regards to environmental issues and developing the community where we plan to operate.