West Africa, recognized for its significant gold resources, is witnessing increased interest from mining companies, particularly in regions like Liberia. With a favorable geology, a growing body of knowledge, and straightforward permitting processes, West Africa has attracted gold miners, leading to substantial economic growth over the last two decades. Exploration company Pasofino Gold (OTC: EFRGF) notes that the region has expanded more than fivefold during this period.
Ancient rock formations and greenstone belts, similar to those in South Africa, Australia, and Canada, can be found throughout West Africa. Governments in the region have implemented standards and policies to ensure responsible mining practices and support local communities. According to the United States Agency for International Development (USAID), the region is ripe for business. One of the most promising countries in West Africa is Liberia, described by Pasofino Gold as “the last untapped gold frontier” due to its unexplored potential and favorable economic environment.
Founded in the early 19th century, Liberia has a business-friendly government and receives one of the highest levels of direct foreign investment in West Africa. The World Bank reports that net investment inflows represented 24% of Liberia’s 2022 GDP, with Pasofino Gold estimating that more than $18 billion has entered the country in recent years. This makes Liberia a significant focus for investors.
The World Bank predicts Liberian GDP will grow by 5.5% through 2024 and by nearly 6% in 2025 and 2026, with mining playing a substantial role in this growth. Research by Africa Mining iQ indicates that most of the mineral wealth in the region remains undeveloped, suggesting that Liberia’s importance in the global mineral economy will increase.
Two of the richest gold-bearing rock types, Archaean and Birimian, are found in Liberia. The Birimian geological region is among the largest gold-producing areas in the world. Additionally, the Liberian government is pro-mining, contributing about 10% to Liberia’s GDP, and prioritizes incentivizing exports to finance food imports.
Mining companies work closely with local governments and communities to minimize environmental impact and support local artisanal and small-scale mining communities. Pasofino Gold, which owns the Dugbe Gold Project in Liberia, has conducted environmental and social impact assessments as part of its Mineral Development Agreement (MDA) with the government. This agreement includes training, infrastructure development, and social services for local communities, facilitated through comprehensive engagement with key government agencies.
Once the Dugbe project becomes fully operational, the Liberian government will receive a 10% carried interest in the mine. Such arrangements help the government recoup investments in public infrastructure and services, demonstrating the cooperative landscape created to encourage foreign investment in the mining sector.
Pasofino Gold’s feasibility study of the Dugbe project, conducted when gold was priced at approximately $1,780 an ounce, estimated the mine's output value at around $690 million. With gold now trading closer to $2,400 per ounce, the potential value of the Dugbe mine's output could reach nearly $1.8 billion.
Pasofino’s MDA with the Liberian government, initially established with a 25-year term, can be extended to optimize output from the Dugbe mine. Pasofino continues to develop its assets in the region and recently added Emre Kayışoğlu to its Board of Directors. Supported by its joint venture partner and majority shareholder, Hummingbird Resources plc (OTC: HUMRF), Pasofino aims to optimize its definitive feasibility study this year and has identified several opportunities to maximize the value of the Dugbe mine while reducing overall capital expenses. These efforts are expected to yield long-term benefits for both Pasofino and the people of Liberia.
