East African Mining News Unearthing Mining Opportunities in East Africa
Related Articles
Scandinavia-based gold producer Akobo Minerals has delivered its strongest operational performance since underground mining commenced at its flaghip Segele asset in southwestern Ethiopia, posting record gold output, surging core earnings, and accelerated debt reduction.
For the second quarter ended June 30, gold production reached a record 37 kg (approximately 1,190 ounces) at a recovered grade of 38.5 g/t. The extraordinarily high yield places Segele among the world’s highest-grade underground gold mines currently in operation. The result brought cumulative gold doré output since startup to 134 kg, rebounding sharply after temporary operational disruptions earlier in the quarter were resolved in June.
On the financial front, preliminary management accounts show revenue hitting SKr57.3 million ($6.1 million), which yielded EBITDA of SKr40.7 million ($4.3 million) for the three-month period. Cash reserves stood at SKr31.5 million ($3.4 million) at quarter-end, buoyed by robust operational cash flows.
The company leveraged its record cash generation to significantly deleverage its balance sheet. During the second quarter, Akobo repaid $3.4 million to primary lender Monetary Metals, which has funded development at Segele since November 2022.
“Our record quarter demonstrates the exceptional quality of the Segele deposit and the underlying economics of our high-grade mining model,” said Jørgen Evjen, Chief Executive Officer of Akobo Minerals. “The operational momentum established in June allowed us to generate robust EBITDA and return substantial capital to our funding partners while maintaining a resilient cash cushion to reinvest in mine development.”
That momentum carried directly into the third quarter ended September 30, with Akobo producing an additional 35 kg of gold doré, pushing lifetime production from Segele to 169 kg. Continued operational cash flow enabled a further $3.0 million repayment to Monetary Metals in September, taking total principal debt repayments for the year to $7.0 million.
To optimize its capital structure as production scales, Akobo appointed corporate finance firm Verdant Capital as its exclusive financial adviser to manage the refinancing of existing debt facilities, with formal market launch preparations now underway. Concurrently, the company is finalizing onboarding with a London Bullion Market Association (LBMA)-approved refinery as it prepares for its initial commercial gold export shipments.
“With significant debt already retired and export logistics nearing completion, Akobo is transitioning from a development-stage operator into a high-margin gold producer positioned for long-term growth,” Evjen added.
