Gold jewellery. Kenya has enough gold deposits to support commercial mining. /Reuters
Kenya has enough gold deposits to support commercial mining, a UK firm that has been exploring Western Kenya says, adding glitter to the country’s long held ambition of joining the rest of sub-Saharan Africa in the minerals exports business.
Goldplat, the UK firm that led a consortium of foreign companies in the Western Kenya project says it will roll out a mining plan as soon as it gets a mining licence from Kenyan authorities.
The announcement made through the mining portal, Mining Weekly, did not disclose the size of the find nor the location but the Department of Mines and Geology estimates that the Western Kenya belt that borders Tanzania (dubbed Migori belt) could produce up to 34 tonnes of gold per annum.
“GMR (Gold Mineral Resources Ltd) is not permitted to make commercial gold sales from the project until its exploration licence is converted to a mining licence. An application has been submitted to the authorities and an outcome is expected soon,” Goldplat says in the current edition of Mining Weekly.
Award of a mining licence to Goldplat, listed at the London Stock Exchange (LSE) through its subsidiary GMR should elevate gold trading to the mainstream economy pushing Kenya into the business of commercial gold harvesting.
Western Kenya produces an estimated 2,000 kg of gold per annum, which is mainly handled by small scale traders who sell their metal to middlemen and a huge fraction of it is not captured by the national data since.
The coming on board of a major mining company offers the country an opportunity to boost its foreign exchange earnings from the commodity, rev up employment in the mining sector and diversify Western Kenya’s economy that currently relies on the underperfoming tobacco and sugar farming.
The project is particularly expected to stir up activity around Migori and Trans Mara districts that are among the poorest regions in the country. Official data shows that Kenya earned Sh592 million from trading 0.3 tonnes of gold last year, but with the capacity of 34 tonnes in Migori alone, the country earn close to Sh67 billion from trading gold.
“That level of output could make gold one of the country’s top forex earners and make Kenya a middle-level gold producer, with the Migori belt alone having the capacity to produce 1.2 million ounces,” says an investor brief from Canadian mining company Kansai Mining Corporation, which also has interests in Kenya.
Goldplat Plc is listed in the alternative investment segment of the London Stock Exchange (LSE) and has mining projects in South Africa and Ghana. It produces precious metals like gold, silver, and platinum in the continent.
In Kenya, Goldplat’s stakes are at Lolgorien, where it owns a 50 per cent stake in a joint venture with Oslo and Swedish-NGM listed International Gold Exploration AB. The joint venture company is registered in Kenya as Kilimapesa Gold.
The Kenyan-registered company has a license to explore the gold potential of the 213 sq km Migori gold belt and is seeking to expand into Tanzania and Uganda.
Kilimapesa Gold’s Lolgorien gold project is situated in South Western Kenya within the Migori Achaean Greenstone Belt.
“We are close to completing the acquisition of the remaining 50 per cent of Kilimapesa Gold, which will see Goldplat wholly own the project,” said Goldplat CEO Demetri Manolis.
He noted that Goldplat had refurbished the Kilimapesa Hill gold-mining project’s plant at a cost of £120,000 this year. This had included the installation of a new mill motor, a crushing unit and an additional gravity circuit and thickener, as well as the replacement of the electrical recirculation circuit and the refurbishment of the assay laboratory, he added in a statement to shareholders.
The firm also claims that it has forged “excellent relationships” with the local community and local artisan miners. The firm also continues to develop other four exploration targets at Kilimapesa namely Olepoipoi, Meghor, Teng Teng and Red Ray, as well as investigating other known high-grade areas with surface mining potential in order to increase the life of mine.
Chairman Brian Moritz commented: “Our objective of becoming a mid-tier miner is under way with Kilimapesa Gold moving towards profitable production and other projects under review. The current favourable gold price environment is enhancing our value and we are in a strong position for growth.”
Gold prices have defied the slowing global economy to traded at slightly above the $1,000 an ounce mark in recent months as investors look at a the commodity as a classic hedge against inflation, falling current and asset classes such as equities.
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