West Africa mining operation for sale

Looking for a placer gold mine opportunity? Not afraid to travel abroad? Ross Novak of Fairbanks, Alaska, has the perfect opportunity to take over his working placer gold mine with hard rock mineralization outcrops also on site, in West Africa.

Four years ago, Novak took the plunge and started up a placer gold mine in the northern part of Benin, a small but politically stable country in West Africa nestled between Nigeria and Togo. Just as gold prices hit their two-decade lows, he made his move to Africa from mining in Eureka, Alaska, about 125 road miles northwest of Fairbanks on the Elliott Highway. While Novak was negotiating freight rates for a 40-foot shipping container that transported a self-designed wash plant and an excavator from Alaska to West Africa, gold was selling for $260 an ounce.

"Some people predicted it would be a dismal failure," Novak said, during a trip back to Fairbanks in early March.

"We just bootstrapped the operation. That's probably the worst part of the experience. If I had it to do over again, I would be better capitalized." The gamble paid off, despite struggles and a "pretty steep learning curve" Novak encountered during his first year in northern Benin, an operation with about 400 square miles of ground about 20 miles from Natitingou. He was able to first work on some virgin ground, a side creek of the Perma River, which had a "good grade" of about 0.76 grams of gold per cubic meter of ground.

"There's no stripping, so the expenses are low," he said. He has since moved into the main creek, which had previously been mined. But gold remains on the sides of the creek, and the quality is high. His bright yellow gold assays at 93 percent, he said, while the grade of gold he mined in Eureka assayed much lower, about 78 percent.

"In Africa, there's no permafrost, no frozen ground to deal with," he said. "We could work as long as we want on this ground. It's a pretty large block with a lot of creeks to work on."

Sailboat savings account building

Novak's operation is more than meeting its monthly expenses of $10,000 to $12,000, and the initial investment has been paid back. Now, his sailboat savings account is starting to build and Novak is ready for a change of pace.

"I'd like to sell or quit. It's been a long project," Novak said. "Four years of mining in Africa is equal to a lot of mining seasons in Alaska."

He has considered looking for a mine manager, but it's hard to find the right combination of experience, travel savvy and availability. Most people with the mining experience don't want to live abroad, especially in West Africa, he said. As a result, Novak recently listed the operation for sale with a Fairbanks realtor, while continuing to work at the mine. One of his concerns about shutting down the mine is the effect on his staff of 10. "I treat my guys good, and they treat me good," he said.

Labor force includes 'sleepers'

Statistics about Benin report an average wage of $300 to $400 a year. Novak pays his equipment operators $200 per month, his welders $125 per month and laborers $100 per month. Crews work seven days a week, 12 hours a day, during the mining season. He provides one month of paid vacation a year, and also health coverage.

Work typically slows June through August, the rainy season. "We shut down to restock, and resupply," Novak said.

He also employs older men called guardians to sleep near the mining equipment at night. "It's a long way from the house, so it's cheap insurance," he said. One such guardian, after receiving a $5 a month raise, took a new wife, his fourth. Locals in Benin were initially amazed that Novak didn't have multiple wives. It took time, he said, to convince them that he did have one wife back in Alaska, and that he did not desire another in Africa.

In fact, he can thank his wife Dana Novak, a chemical engineer and an active member of the Alaska Miners Association, for the opportunity to mine in West Africa. Dana heard a presentation by a geologist who worked in South Africa and put her husband in touch with him. That ultimately led to the Benin opportunity and to Novak's formation of his own operating company, Goldstar Mining.

Traffic, travel dangerous part

While Benin's neighboring countries in West Africa are dangerous and full of unrest and violence, that's not a concern for Novak: "It's a democratically elected government. The three elections during the last 15 years have been peaceful. Benin is just not a place you go for vacation."

Wildlife viewing opportunities are "zero," he added. "We might see a rabbit once a month. If it's not behind a wire, it's dead."

The danger in his operation is driving in the coastal city of Cotonou, some 300 miles south of his mine. Driving laws from the West are not followed and fatal accidents are not uncommon, he said. His interpreter doubles as a chauffeur during those trips. Novak said he is also somewhat secretive about his departures from the mine, as he sometimes travels with gold to sell.

Packed in zip-lock bags, the gold shows up as "solid black" on the X-ray machines at airport security. Typically, security screeners will open the bag and ask what he's carrying. One U.S. screener thought it was birdseed.

Mineralization in quartz

During the interview with Mining News in March, Novak showed the remnants of such a zip-lock bag. The gold did resemble birdseed in its size and coloration. He also showed rock samples from his property in Benin, one a beautiful crystallized quartz and gold specimen. Another quartz rock, taken from a hard rock resource on the property, also contained visible gold, apparent even in subdued restaurant lighting.

Locals dig out such rock from his property and, pounding them by hand, free the gold. Novak then buys it from them, paying a set price of $290 per ounce. The independent "hard rock miners" have formed their own group, complete with a president.

"I've been buying about one ounce a day from them," he said. In the past, locals dug a tunnel into the ground about 200 feet deep. Novak was asked by local governmental authorities to close the tunnel with a blast for security reasons. Shortly afterwards, locals had re-opened the hole to access the rich rock. "The quartz vein is at surface, and has assayed as high as two to seven and one-half ounces per ton, but a lot of it is half-ounce," Novak said. "To me, it's just yellow rocks."