TORONTO (miningweekly.com) – West Africa-focused aspirant midtier gold producer Asanko Gold has inked a binding power purchase agreement (PPA) with independent power producer Genser Energy Ghana to supply all the power required for Phase 1 of the $295-million Asanko gold mine, which was scheduled for first production in the first quarter of 2016.

Under the agreement, Genser would build and operate a 19.2 MW liquid fuel power plant next to the Asanko mine site and supply 17 MW of nominal power to Phase 1 on a fixed-price, life-of-mine contract.

The initial contracted rates for the first two years (2016 and 2017) were slightly lower than the rates published in the Phase 1 definitive project plan in November last year. In 2018 and 2019, the contracted tariffs decrease in each year, providing a benefit to the long-term operating cost profile of the mine.

Asanko was also installing a 30 km, 161 kV power line to connect to the national grid, which would also supply the power required for the proposed Phase 2 expansion project. Under the PPA, Genser would have the ability to use the power line to sell excess power into the grid or to supply power using the grid from its coal-fired power plant at Chirano, which was undergoing an expansion.

The power line was on track to be complete in the third quarter. Bush clearing and ground preparation had been completed and foundation work for the towers as well as the medium-voltage substation at the project site was well advanced.

"We have chosen Genser as our preferred power supplier because of their established presence in Ghana, their record and their capability to meet our long-term requirements,” Asanko president and CEO Peter Breese stated.

The company added that signing the contract was a critical step in ensuring that cost effective, reliable and stable power would be supplied for Phase 1 of the Asanko project.

Permitting and construction of the 19.2 MW plant would start immediately, with power expected to be available in the fourth quarter, ahead of commissioning Phase 1 early next year.