Ghana gold mine to cost $38mln - Red Back

SYDNEY, April 29 (Reuters) - Australia's Red Back Mining NL, said on Tuesday a study shows it will cost $38 million to develop its Chirano gold mine in Ghana using second-hand equipment once a government mining licence is granted. The figure is based on a feasibility study commissioned by the company, which also indicates the lode could yield 130,000 ounces of gold a year for six-and-a-half years at an average cost of $211 an ounce.

Australian Stock Exchange-listed Red Back, which holds 95 percent of the rights to mine the deposit located in a forest preserve in southwestern Ghana, has already acquired used milling equipment in Australia, which it plans to ship to the West African nation.

"These alternative development scenarios could see the already robust economics of the Chirano project further improved," Red Back Managing Director Ross Ashton said.

Red Back is among a handful of gold miners Ghana hopes to lure with new mining laws that include opening up previously protected forests.

Mining contributes about 45 percent of Ghana's foreign exchange earnings and the country already is Africa's second largest gold producer after South Africa.

Ghana's government recently announced it would grant mining leases in its forest preserves to Red Back, Ashanti , Newmont Mining Corp and Satellite/Bogosu Gold.

Red Back was expecting its license by the end of this year, allowing it to start mining gold in 2004, Ashton said.

The company was also considering listing its shares in either Canada or Britain to help raise mine development funds, Ashton said.