Fiscal Regime – key aspects:

• Government carried interest - the government is given 10% carried interest in the rights and obligations of mineral operations in Ghana.

• Mineral royalty - subject to any fiscal stability agreement, mineral royalty is payable at 5% of the total revenue earned from mining operations.

• Corporate income tax – mining companies are subject to tax at the rate of 35%, whereas mining support service providers are subject to tax at the rate of 25%.

• Capital allowance – mining companies are granted capital allowance at the rate of 20% on a straight line basis on mining assets.

• Carry forward of losses – mining companies, as priority sector companies, are allowed to carry forward tax losses for a period of five years. However, mining support service providers are allowed to carry forward tax losses for three years.

• Annual rental fees – the fees are prescribed by the Minerals Commission in accordance with the provisions of the Minerals and Mining (Ground Rent) Regulations, 2018 (L.I. 2357)

• Annual mineral right fee – the fees are prescribed by the Minerals Commission in accordance with the provisions of the Minerals and Mining (Licensing) Regulations, 2012 (L.I. 2176)

• National fiscal stabilization levy (NFSL) – NFSL is payable by mining support service providers at the rate of 5% of profit before tax up to 2024 year of assessment.

• Exemption from import duty – mining companies are exempted from import duty on plant, machinery and equipment exclusively imported for mining operations to the extent that they are listed on the Mining List.

• VAT – a refund application can be made for VAT incurred on purchases. Refunds will be made after the Ghana Revenue has confirmed the amount of refund.

• Stability agreements – Government of Ghana has entered into stability agreements with some mining companies. These stability agreements are mainly meant to protect the holder of a mineral right from the negative impact of changes in laws in Ghana for a specified period of time.

Source: Prepared by George Ankomah, Lead Tax Partner and Energy, Resource & Industrials (ER&I) Leader , Deloitte Ghana

Performance of the Mining Industry in 2020

(Ghana Chamber of Mines):

• Gold output by the large-scale mining sector decreased by 4.8% from 2.98 million oz in 2019 to 2.87 million oz in 2020

• The aggregate volume of gold produced by Ghana decreased from 4.57 million oz in 2019 to 4.02 million oz in 2020 (including both large scale and small scale producers)

• Purchase and export of gold by the Licensed Gold Exporting Companies nosedived by 26%

• The volume of manganese produced by the Ghana Manganese Company (the country’s only producer) descended from 5.38 million tonnes in 2019 to 2.35 million tonnes in 2020


“When you take a bird’s eye view, Ghana is truly a very exciting place and a relatively easy place to do business. That said, there are a few challenges we need to be straightforward about: On the ground, inflation rates feel higher than on paper, and the macro-economic picture is not rosy. Also, investors should be aware that things can take time in Ghana. One particularly problematic area is land acquisition, especially in the mining or agriculture sectors. Land acquisition requires special assessments and expert advice, in particular because Ghana operates a traditional, communal land tenure system on top of the common law system. Ghana is seeing a rapid digitalization uptake, which is ultimately great news for the future, but it can be painful until the right developments and transitions are realized.”

NanaAma Botchway, Managing Partner, N. Dowuona & Company

“Mining has always been a bedrock of Ghana’s economy, representing over 40% of the total exports value and playing a fundamental role in job creation. In remote areas without another major source of employment, mining can account for about 90% of local jobs.”

George Arhin, Partner and PwC West Africa Mining Leader


The Black Volta Gold Project, developed Ibaera Capital

“We acquired Azumah Resources and its flagship Black Volta project in 2020, investing over US$40 million to bring the project to a construction-ready phase. Since last year, we completed a DFS and gained the government’s approval for the commencement of construction. Black Volta is evaluated to produce 148,000 oz/y at a grade of 1.78 g/t Au for a life of mine of 11 years.

The mineralization lends itself to simple, mostly open-pit mining. The project also presents excellent economics, with a very attractive AISC of US$905/oz and an after-tax NPV of US$370 million. The capital cost is just under US$200 million paid back in 1.7 years at a post-tax IRR of 44%.

We think this is one of the best near-production gold assets in Africa and many companies have already expressed interest in partnering with us to build. Our target is to have the funding committed by the end of this year to move into construction.”

James Wallbank, Managing Partner, Ibaera Capital

The Enchi Gold Project, developed by Newcore Gold

“The updated PEA outlined an open pit mine and heap leach operation with very strong economics, including an after-tax NPV5% of C$212 million at a gold price of US$1,650/oz, with an after-tax IRR of 42%. These results are driven by a low upfront capital requirement of C$97 million. We also completed an update Inferred Mineral Resource Estimate of 70.4 million tonnes grading 0.62 g/t gold containing 1.4 million ounces gold.

Our PEA and resource update only included 20,000 m out of our largest-ever, 90,000 m drill program. We have drilled a total of 50,000 m already and we are on track to drill an additional 40,000 m over the next 6 to 9 months. All four of our gold deposits are open along strike and at depth, so we will continue to drill along strike, which we view as low-risk exploration. For the first time, we will also start drilling below 150 m.”

Luke Alexander, President & CEO, Newcore Gold