Two of the world's biggest mining names are cornering the West African gold market. Who's next?

News.com.au

11-05-2025

Another strategic move by Lundin and Zijin has market watchers wondering which West African gold stock could be the next target
Turaco and Many Peaks the latest ASX gold stocks showing value proposition in Côte d'Ivoire
Cocoa exporting giant has become the hottest gold jurisdiction in the fertile region
Two of the world's biggest mining names have tightened their grip on the next generation of West African gold developments, using a string of strategic investments to build a soft empire in the gold exploration hotspots of Côte d'Ivoire and Guinea.
And it has experts, explorers and market analysts asking the question – who's next?
The latest move from Lundin (family fortune +US$7bn) and China's Zijin (market cap US$64bn) has seen the Swedish mining dynasty partner with TSX-listed Montage Gold Corp and Zhaojin Capital – a subsidiary Chinese State-owned gold miner in which Zijin holds a 20% stake – to acquire a collective 28% stake in a $35.6m private placement in Boundiali gold project owner Aurum Resources (ASX:AUE).
Montage, owner of the Kone gold project in Côte d'Ivoire, is in turn owned 19.9% by Lundin and 9.9% by Zijin.
This is where it gets tasty.
Zijin moved into Montage in July last year, where Lundin was already the largest shareholder, supporting a C$180m placement and providing C$125m in debt finance alongside metals streamer Wheaton Precious Metals (a $625m package) to underpin the development of the +300,000ozpa mine.
From that point on, Lundin and Zijin have maintained what appear to be close ties.
Through Montage they've taken positions in TSX-listed Sanu Gold and more recently African Gold (ASX:A1G), the owner of the 452,000oz Didievi project in Côte d'Ivoire.
Lundin and Zijin have also accumulated a combined 10% stake in Predictive Discovery (ASX:PDI), the owner of the 5.5Moz Bankan gold project in Guinea, touted as a potential top-20 African gold mine. Their $69m investment early this year put the cat well and truly among the pigeons after ASX-listed Perseus Mining (ASX:PRU) had planted its flag as the developer's largest shareholder last year.
It also comes after Zhaojin bought out Tietto Minerals, the previously ASX-listed owner of the Abujar mine in Côte d'Ivoire in a $768m cash deal.
Experts say Lundin and Zijin's move to corner the market for West African gold developments shows how quickly Côte d'Ivoire – better known for its cocoa exports – and Guinea have risen among the world's top destinations to explore for and mine the precious metal.
"Ghana was the place where a lot of new gold mines were being opened up 20 or 30 years ago and then it was Burkina Faso where there were 10 new gold mines opened up in the last 15-odd years," junior stock expert John Forwood, CIO of the Lowell Resources Fund (ASX:LRT), told Stockhead.
"Those places have become harder to do business in and I think Côte d'Ivoire is very well endowed geologically with a lot a lot of productive Birimian greenstone.
" But also, it's gone from being a very unstable jurisdiction to a very stable jurisdiction."
Who's next?
There are two big questions for investors now.
Firstly, will any of these strategic chess moves be converted into full scale takeovers, with premiums attached?
Secondly, who else could be on Lundin and Zijin's radar?
Forwood said the well-heeled partners in crime had been 'following' Lowell's investments in the arena.
"Sanu, which is Canadian in Guinea, Predictive Discovery, African Gold and now Aurum, we've only got one listed West African gold company that they haven't gone into which is Desoto Resources (ASX:DES)," he said.
Desoto is the new vehicle of PDI founder Paul Roberts and holds 14 projects in Guinea's Sigiuiri Basin, where AngloGold Ashanti owns the +200,000ozpa Siguiri mine.
"That could be next cab off the rank, although it's very early days there," Forwood added.
Among the largest undeveloped resources in Côte d'Ivoire is Turaco Gold's (ASX:TCG) Afema, where the junior recently grew its resource over 40% t0 3.55Moz. Located in the country's southeast, that included 50.9Mt at 1g/t for 1.6Moz at the Woulo Woulo deposit and 9.1Mt at 610,000oz at the higher grade Jonction.
It's now worth $406m. But at the even earlier stage, with far more leverage at a market cap of $46m, is Many Peaks Minerals (ASX:MPK).
Its Ferké project is an old Predictive Discovery site (before settling on Bankan, the company was a prolific prospect generator), and its Ouarigue prospect is showing all the hallmarks of a potential company maker of its own.
"It's exciting for us," MD Travis Schwertfeger said of the manic corporate activity in Côte d'Ivoire.
"It's probably us and Turaco who are the last two standing projects with development potential that haven't been pulled into a (major's orbit) over the last couple of years.
"I think it gives us a lot of leverage."
More activity in African gold rush
On top of Lundin and Zijin's manoeuvring, Resolute Mining (ASX:RSG) this month announced a deal to acquire two projects in Côte d'Ivoire from AngloGold Ashanti for US$150m, including the advanced Doropo project, with RSG sending some tenements near AngloGold's Siguiri gold mine in Guinea the other way.
It allows Resolute to diversify from Mali, where it was forced to strike a deal with the ruling military junta after CEO Terry Holohan was detained last year.
With authoritarian and unpredictable governments in place in Mali and neighbouring Burkina Faso, both of which have seen coups in recent years, Cote d'Ivoire has become the West African jurisdiction of choice for gold miners.
An election later this year notwithstanding (controversy has reared its head after a citizenship ruling precluded the candidacy of former Credit Suisse CEO Tjidane Thiam), it delivers the same greenstone belts with a fraction of the sovereign risk.
Forwood says its government is also becoming more development friendly, opening forest reserves with similar rocks to the region's major gold mines to exploration.
At the same time, valuations continue run lower than similar companies in Western jurisdictions like WA.
Despite hosting 1.59Moz of gold at its Boundiali deposit and impressive drill hits to be plugged into a future resource upgrade, along with a timeline to a DFS in 2026, Aurum's shares have only lifted 18% in the past year.
A similarly positioned gold stock in WA, Astral Resources (ASX:AAR), is up 100% in the same period, and the gold spot price is up 41% to a near record US$3335/oz.
"Astral and Aurum are a similar order of magnitude, probably similar grade of just over a gram (a tonne). Astral arguably have got a head start in terms of development," Forwood said.
"But Aurum are talking about having a DFS done by mid next year, which is probably not that far behind if at all on Astral."
Astral is trading at around a $220m market cap, with Aurum at about half that level, a valuation gap that points to why Lundin and Zijin are so favourable to West African explorers.
Forwood adds that major changes in China's financial architecture is encouraging its State-owned miners to seek growth, with Chinese official, institutional and retail buying a major reason why gold prices have been surging in recent years.
"There was news couple of weeks ago that the 10 largest pension funds in China are going to invest 1% of their assets in gold and that would be massive. That would be akin to 30% of global production if they did that," he said. Chinese insurance companies have also been allowed to invest in gold.
"One of the key conclusions to draw from this is China is trying to back its currency with gold to present a credible alternate reserve currency to the US dollar," Forwood mused.
" Zhaojin and Zijin and other companies are getting tacit support from the Chinese government to grow their gold production in places like West Africa.
"We're certainly seeing waning influence from France in its former West African colonies, so the Chinese are putting their foot on these opportunities to source gold from jurisdictions which are ... agnostic towards China."
Higher grades
Africa also has a less mature gold industry, which means discovery rates have been far higher in recent years.
According to Crux Investor, 95Moz of gold resources have been found in West Africa since 2004, compared to 61Moz in Canada and 29Moz in Australia.
"West Africa as a region has been the fastest growing gold development region for a long time," Many Peaks' Schwertfeger said.
"A lot of those ounces were coming out of Mali and Burkina Faso in previous years, but now Côte d'Ivoire is really starting to come into its own and Guinea."
Previously on the board of Perseus takeover prey Exore Resources alongside Turaco's Justin Tremain, Schwertfeger says Many Peak's Ferké has also demonstrated high grade potential beyond that typically seen in Côte d'Ivoire.
A standout drill hit announced to the market in March clocked in at 45m at 8.58g/t gold from 104m.
"There's a lot of profitable mines there, but typically running between one and one and a half grammes per tonne," he said.
"Typically there are lower grade gold deposits in the systems in Côte d'Ivoire and we're seeing a bit of a standout higher grade deposit that I think gives potential for much higher margins."
At Stockhead, we tell it like it is. While Many Peaks Minerals is a Stockhead advertiser, it did not sponsor this article.