What have been the main developments at Lycopodium over the past year?

Lycopodium is busier than ever, particularly in Africa, where we have 10 projects, in addition to about 10 other feasibility studies underway. We are working on Newmont’s Ahafo North in Ghana, now in the late stage of design and early stages of site work; in Burkina Faso, we are close to completing the construction of Orezone’s Bomboré project. In Côte d’Ivoire, we are busy with the Séguéla gold project, operated by Fortuna Silver Mines, and also just kicking off the Lafigué project for Endeavour. In Senegal, we are again working with Endeavour on the Sabodala-Massawa complex, while in Mali, Lycopodium was contracted by Leo Lithium to deliver the Goulamina lithium project. In Botswana, we are working with Sandfire on the Motheo project, and in Namibia with QKR on Navachab, as well as Paladin Energy on the Langer Heinrich restart project. In Egypt, we are working on Centamin’s Sukari project. 

How is Lycopodium managing higher inflationary pressures?

There’s no question that cost escalation will be testing project economics, which ultimately does impact the market, but demand for most commodities is strong. While all the projects I have just mentioned are on their way to becoming operational, projects at pre-feasibility or definitive feasibility are more decisively exposed to cost pressures; for these, inflation could influence the verdict of investors and developers to move forward.

As a business, we must be mindful of cost pressure risks, and only take on responsibilities that we can reasonably manage. For example, there is significant upward pressure on labor costs, which represent our biggest expenditure. Therefore, we can either allow some element of labor cost escalation or contract in such a way that our labor cost increases can be flowed through to the project, especially for longer projects. The other key element we must be very conscious of is capital cost risks – for which we need to make allowances for expected increases in the price of fabricated products, equipment, or the construction work.

What are the main challenges to further expansion in Africa?

The availability of experienced people remains the biggest expansion bottleneck, not just in Africa, but around the world. More specific to Africa is the challenge of security, with the situation continuing to deteriorate in much of West Africa but also in East Africa. For example, Lycopodium is currently working on a tender for a project in Ethiopia, and security is our biggest concern. When we expand to new jurisdictions, like we have done with Orca Gold on Block 14 in Sudan, we must be very careful and do thorough due diligence. Lastly, the supply chain remains particularly challenging. The chip shortage is well-publicised, but what is less known is that this crunch affects not just car makers like BMW, but also the process logic controllers or variable speed drives, among other things, used in mining plants; without these components, project schedules are impacted.

How do you approach a project with a high security risk?

A company like ours is nimble, able to mobilise quickly because our assets consist mostly of people. This also means our biggest risk is sending our people to a site. First and foremost, we do not send people to a red security area. Then, when we do send someone to an area with an orange security profile, we make sure they are escorted by a specialist security company. We cannot lose sight of the fact that we are engineers, not soldiers, and when the risks are too high, we do not hesitate to step out.

Could you share with our audience Lycopodium’s social commitments?

Our support of the communities in which we live and work is focused on social development and education endeavours. We provide in-kind and financial support to charitable causes all over the world, particularly supporting opportunities for the training and education of the next generation.

Do you have a final message?

I see tremendous opportunities for growth moving forward, and we are flourishing in Africa. We want to continue the good work, grow organically, steadily, and service new jurisdictions, which is what we have been doing quite naturally.