The AGC’s Two Kilogram Model

Dr. Paul Schure

Artisanal Gold Council & University of Victoria

May 2015

(2kgM)

2

AGC Project Locations

Environmentally Sound, Socially

Responsible, Formalized ASGM

sector

Better Practices

Policy and Governance

Markets

AGC Activities

Guides

Mercury Free Installations

The 2 Kilogram model (2KgM) • A Financing Model in line with core mission of the

AGC to improve the:

- environment

- health

- economic wellbeing of ASGM communities.

• In essence a loan (lease) of AGC to ASM mine

• May generate a sustainable revenue stream for the AGC’s core budgetary needs and for expanding ASGM improvement programs

Introducing the 2kgM

• Find committed buyer of AGC mercury-free developed processing plant

• If need be, finish formalization process of the mine • In BF many semi-legal mines

• Buy and Install processing plant

• Repay AGC through gold recovered through processing plant

• Train miners during construction and repayment period

2KgM Core

For miners • Components that miners easily understand and

learn – concepts they are already familiar with

• Little up-front capital • Commitment fee: Shipping & insurance

• AGC help with navigating regulatory environment • Licensing, developing markets, OECD DD

• Gold mill and sorting tables allow for: • increased gold recovery

• reduced or zero mercury use

Why does it work?

The commitment fee

Pilot Mercury Free System, Senegal, 2014

For the AGC: • Organizes the ASGM sector & Replicable and

expandable through quick cost recovery

• Minamata Compliant

• Goes beyond just the ‘low hanging fruit’ that are often targeted through traditional development projects or certification schemes.

• May ultimately provide stable revenue stream for the AGC that is reinvested in further improving the ASGM sector

Why does it work?

Typical costs • Equipment $30,000-$40,000 USD

• Overhead, installation and training $40,000

• Total approximately $80,000 USD = … • 2 kg gold at current prices

• Ideally: costs go down as volume picks up

Why does it work?

• Maximizes gold recovery (increasing land productivity and overall lowering the environmental footprint per unit of gold produced)

• Tails are consistent and lack of mercury contamination - ideal for further processing bringing total gold recovery to 90% or greater.

• Creates a waste management system to international standards

2kgM: Further Details

• No proprietary technology / open access

• Optimized based on mining conditions

• Typically one processing module treats between 2000 – 4000 kg/day • Modules are like lego blocks, more can be added and

they can have different sizes.

• Through our knowledge about the mine: • Supply Chain Transparency Compliance

• Possible trading opportunity = market development

2KgM: Further Details

• Model works:

• Currently 2 systems are operating in Burkina Faso

• Senegal plant almost ready to run

• Nicaragua: agreement, working on paper work

• Many other operators in Burkina are interested. Honduras will start in 4 months.

2kgM: Status

Burkina Faso (Pilot) Plant

Jaw Crusher Shake Table

Chilean Mill

Sluices Generator

Tailings Pond

Senegal Plant

Pilot Mercury Free System, Senegal, 2014

Complementarity with trading activity? • gold buying at competitive price • 80-90% of spot price, plus taxes (2-5%) - currently unpaid in

most places. • Transparent, legal supply chains to international buyers • Revenue stream for AGC core funding?

• Which is the magic number? • Fleets of say 20 nearby units

• Efficiency gains: regulatory approval, shipment costs, replacements parts, incentives of locals to specialise in maintenance

• End goal: get a sustainable numbers of plants?

• Other mining environments: we have the expertise

Extensions

• 500,000 for first pilot system

• 100,000 for second system

• 80,000 for additional systems – depending

• We need a working capital pool of ~2-3 million to install fleets of 20 systems, repetitively

2kgM: Cost to Accelerate

Thank you

19

First Mercury Free Production