Australia's Resolute Mining will start commercial gold production at its Syama mine in Mali in July, the firm's general manager in the West African country said on Tuesday.
Syama, which has cost $189 million so far, is forecast to produce 250,000 ounces of gold per year when running at full capacity, which at current world prices would be worth more than $220 million.
We will start producing gold in April or May, but there will be a period of bedding in, and we think we will be in constant production from the start of July, Philippe Aupy said.
Syama, judged insufficiently profitable when gold prices were low, was placed on care and maintenance by former owner Randgold Resources in 2001. Resolute bought it in 2004 and began redeveloping it in June 2006.
We are almost ready, Aupy told Reuters in an interview. As of March 31, 99.7 percent of the rehabilitation work had been done.
Gold is benefiting from the global financial downturn as many investors seek shelter in what they see as the safety of the yellow metal, and some fund managers say shares in gold miners are a good buying opportunity.
Spot bullion traded around $885 per ounce on Tuesday, down from its February high of $1,000, but still almost three times its average in the early years of the decade.
The project will last 15 years at annual production of 250,000 ounces, but for the first four years we will produce 180,000 ounces per year, Aupy said.
Mali is one of sub-Saharan Africa's biggest gold producers, and the precious metal is a major contributor to its economy.
Last month, its prime minister said Mali would earn $240 million from gold in 2009, up 20 percent on last year, when gold revenues accounted for 70 percent of export earnings. Other mining firms active there include AngloGold Ashanti and Randgold Resources.
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