Canada-based Asanko Gold has commenced early works construction activities to advance Phase 1 of its Asanko gold mine in Ghana.

In a statement released on Tuesday, Asanko Gold said commencement of the programme followed Board approval of an early works budget of approximately $16 million. A full investment decision by the Board is planned for Q3 2014.

Asanko completed its acquisition of PMI Gold in February this year, providing the foundations for creating a mid-tier gold mining company. It subsequently combined PMI’s Obotan mine with its own Esaase project to form Asanko gold mine. At the time, Asanko Gold said the process of integrating PMI into Asanko was well under way, and likely to be completed in Q2 2014.

According to Asanko Gold, the early works programme is designed to advance key activities that will enable the company to maintain its project schedule. Its target for first gold is Q1 2016, with Phase 1 producing 200 000 ounces a year in 2016.

Asanko gold mine will ultimately be designed as a single processing facility built in phases, with ore sourced from multiple pits across the project concessions. Current pits include Nkran and Esaase, which collectively contain an estimated 7.5 million ounces of gold as measured and indicated mineral resources.

The critical activities forming part of the early works programme include advancing engineering to a sufficient level to allow for construction to begin in Q3 2014. It also includes starting bulk earthworks on the proposed 3Mtpa carbon-in-leach (CIL) processing plant site, and re-routing an existing power line which runs across the proposed plant site.

Other tasks include completing road works to upgrade an existing 11 km long haul road running between the Nkran pit, the proposed processing plant site and the Abore pit. The programme will also involve establishing temporary construction camp accommodation and upgrading site utilities, as well as upgrading the site’s communications systems.

Asanko’s President and CEO Peter Breese said the company decided to advance certain engineering items ahead of completing its updated mine plan and restructuring its project financing, to ensure the project remains on schedule.

“We expect to complete both the updated mine plan and the project financing documentation this quarter in preparation for an investment decision in early Q3 2014,” he added.