Blue Gold Limited announced Wednesday that it has secured an additional 65 million dollars in committed funding to restart the Bogoso and Prestea gold mine, bringing total committed capital to 140 million dollars. The announcement comes as the Nasdaq (NASDAQ:BGL) listed company pursues international arbitration against Ghana’s government over a disputed mining lease termination.
The new funding from an unnamed institutional investor is structured as a secured loan exclusively for financing the restart of the 5.1 million ounce mine located in Ghana’s Western Region. These funds remain held in escrow with lawyers, conditional on resolution of the ongoing lease dispute with Ghana’s government.
Chief Executive Officer Andrew Cavaghan stated the funding demonstrates the company’s capacity to invest and bring the mine back to full production. He indicated Blue Gold is prepared to withdraw litigation if the lease dispute receives immediate resolution, emphasizing confidence in reaching either arbitration victory or negotiated settlement.
The previous Ghanaian administration terminated the Bogoso and Prestea mining lease in September 2024, which Blue Gold characterizes as wrongful action preventing investment of secured restart funds. The company immediately challenged the legality and initiated international arbitration proceedings seeking one billion dollars in damages for what it describes as state enabled expropriation.
Ghana’s former Minister of Lands and Natural Resources Samuel Abu Jinapor terminated the lease effective September 3, 2024, citing recommendations from the Minerals Commission and Attorney General. The ministry stated that Future Global Resources (FGR) Bogoso Prestea Limited, the previous operator, failed to meet specific conditions including payment of outstanding worker salaries and demonstration of financial resources within stipulated timeframes.
Blue Gold had acquired the struggling operation from FGR with restructuring plans supported by a 150 million dollar bond issuance listed on Nasdaq and an 80 million dollar additional facility. The company submitted its restructuring proposal January 30, 2024, receiving conditional approval in April after demonstrating substantial financial backing including documentation showing over 100 million dollars in daily liquidity.
Operations briefly restarted in August 2024 following a care and maintenance period since December 2023. Underground mining activities and dewatering commenced, with teams preparing processing plants for gold production when the lease termination halted all activity. Blue Gold maintains it met all financing conditions before operations could fully resume.
Controversy intensified when the Minerals Commission subsequently recommended reassigning the lease to Heath Goldfields Limited, a newly incorporated local company established February 6, 2024, with stated capital of 10,000 Ghana cedis. Former Minister Jinapor approved the reassignment to Heath Goldfields on November 12, 2024, citing technical and financial capacity, then issued contradictory instructions November 20 suspending all processes related to granting the mine to any company.
More than 400 former workers have protested against Heath Goldfields, citing unpaid benefits and alleged breaches of commitments made during the transition. The Ghana Mine Workers Union had previously demanded FGR’s lease termination due to poor working conditions, debt obligations, and lack of investment capacity, but workers now express concerns about the manner in which the reassignment occurred.
The total committed capital comprises a 75 million dollar equity line of credit that remains undrawn and the newly announced 65 million dollar secured loan. Both financing arrangements provide flexibility but leave execution contingent on legal and political outcomes, creating uncertainty around planned restart timelines.
Blue Gold’s strategy extends beyond traditional mining operations to include plans for tokenizing gold production through its recently launched Digital Division. The company aims to create what it describes as the world’s first global gold backed currency, integrating blockchain technology with physical gold output.
The Bogoso and Prestea mines represent Ghana’s fourth largest gold resource and rank among the country’s oldest operations. Once owned by Golden Star Resources, the assets have faced operational challenges in recent years following ownership changes and declining production levels that accumulated over 200 million dollars in losses under FGR management.
Industry analysts indicate the government’s handling of this matter carries broader implications for investor confidence in Ghana’s mining sector, a key driver of economic activity. The dispute raises questions about regulatory consistency and transparency in resource governance, particularly given the timeline of events surrounding the lease reassignment.
Resolution of the lease dispute would trigger renewed mining activity in the Bogoso Prestea corridor, potentially creating hundreds of local jobs and reviving economic activity in one of Ghana’s major gold belts. However, execution remains contingent on either successful arbitration or negotiated settlement between Blue Gold and Ghana’s current administration.
The situation represents a test case for how Ghana manages mining sector disputes amid increasing global scrutiny of environmental, social, and governance practices in natural resource extraction. International observers are monitoring developments closely as they could influence future investment decisions in Ghana’s mining industry.
Source: newsghana.com.gh
