The battle of the “Agyapa Royalties” deal keep resurfacing everyday and from the way things are going is not going to end soon as Kofi Bentil a Senior Vice President and Policy Analyst with Imani Ghana, voted among the top think tanks in Africa and one of the leading Think Tanks in Ghana has replied Gabby Okyere Darko a memeber of the New Patriotic Party (N.P.P)
This is the full statement made by Kofi Bentil on his Facebook page on August 31,2020. Please read below.
After I shared with you Bright’s ballpark model, which is the simplest way to compress all the analysis without losing much by way of accuracy (if you have another model, please share), you disputed one factor in the analysis: i.e. how much gold on average will Ghana be producing every year during the period the agreement is in force, for which royalties once due us would now go to Agyapa.
You indicated that you believe only royalties from the gold produced in the large mines will be sent to Agyapa.
A careful perusal of the agreement will show that it does NOT cover large mines only. There is nothing whatsoever in the agreement to suggest such a conclusion.
Indeed the agreement covers leases – 48 of them.
A lease may cover more than one mine or multiple leases may cover a single mine. So your figure of 2.9m Ounces, which is tied to the production of the large mines today is not supported by the agreement per se. This is your own supposition.
Based on the numbers, that figure is too low to reflect the true royalties that will be due today and far lower when we consider anticipated growth in production that will come when the prospecting leases, also assigned to Agyapa in the agreement, come on stream in a few years.
The best way to do this analysis is to take the leases one and by one in schedules 1 and 2 of the Assignment Agreement and link them to company production disclosures.
We have done that, corroborated by ACEP, and concluded that the agreement covers 95% of production output TODAY. That means royalties from 4.6 million ounces of gold per year will go to Agyapa if the process was to start now. But we also have to take into account that the agreement assigns royalties from a whole bunch of prospective leases that are yet to start producing, so we also have to account for growth in that 4.6m ounces number over the life of the agreement. That is why we settled on 4.9m. But we are happy to hear alternative views.
It is also important to note that upcoming mines like Namdini alone has more than 6.7 million ounces of indicated reserves. Which are mostly proven and therefore sure to increase output even further.
Hence, the argument that only royalties from 2.9m ounces of gold shall go to Agyapa is just indefensible it is way more than that! The agreement clearly covers more.
We need to compare notes in the interest of the country, my brother. Thanks