Jan. 9 (Bloomberg) -- Axmin Inc., a Canadian gold explorer, delayed plans to open a mine in the Central African Republic by at least a year as rebel fighters started a push toward the capital, Bangui.
Progress in securing financing for the Passendro Gold project near Bambari, about 280 kilometers (174 miles) northeast of Bangui, stalled after the insurgents overran the site last month, said Chief Executive Officer George Roach. The government and rebels are scheduled to hold peace talks Jan. 10 in Gabon.
“This is a setback of probably at least a year,” Roach said by phone. “It’s going to take time, knowing the country and the region, to get proper safety and stability; it’s going to take time to re-establish investor confidence in the country and it’s going to take time for banks to be prepared to lend.”
An alliance of insurgent groups, known as Seleka, began an offensive in the Central African nation last month and on Jan. 7 moved to within 12 kilometers of Demara, the last major town on the road to Bangui. A multinational force from neighboring Congo Republic, France and Gabon has been deployed in the country, which is about the size of Texas. South Africa also sent troops.
Seleka says it began its rebellion after President Francois Bozize, 66, failed to honor the terms of a 2008 peace deal. The United Nations Security Council in a Jan. 3 statement expressed concern that the rebels were advancing and said the situation couldn’t be resolved militarily.
Axmin has invested C$95 million ($96 million) in the gold project, which began development in the late 1990s, Roach said.
“The state is aware of the fact that our camp has been attacked, that we can’t occupy the camp,” which is a 1,200-square-kilometer site that has been staffed with as many as 50 workers, Roach said Jan. 7 from London. “There’s no one who can give us protection in that area and under those circumstances we can’t enter the region.”
Axmin had expected the Passendro mine to produce more than 200,000 ounces of gold in its first year, Roach said. In August, the company reported progress in obtaining $100 million of project financing arranged by Standard Bank Group Ltd.
Shares in Axmin have dropped 84 percent since February on the Toronto Stock Exchange. No shares have changed hands today.
As well as gold, the Central African Republic also mines rough diamonds and was ranked 12th among the top producers of the gems in 2010, according to a U.S. Geological Survey report. Axmin was granted a 25-year license to develop Passendro that year. The nation also has undeveloped deposits of copper, uranium and iron, the report shows.
Areva SA, a French developer of nuclear reactors, started removing employees from its Bakouma uranium mine in the Central African Republic after an attack last year, Patricia Marie, a company spokeswoman, said yesterday. The Paris-based company closed the site following declines in uranium prices and now has only three subcontracted people in Bangui, she said.
At Passendro, just one local worker remained in the camp with communication equipment and generators as the rebels approached, Roach said. He wasn’t harmed, according to the CEO.
“I did not anticipate this because frankly, historically the state militia has been quite good in providing security, but in this instance were unable to do so,” he said.
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