London-listed gold explorer Acacia raises Kenya budget to Sh1.2bn

London-listed gold explorer Acacia Mining has increased its 2017 exploration budget for Kenya by a fifth as the firm gears up to announce its first discovery by March.

Acacia, which owns mines in western Kenya, said it would spend $12 million (Sh1.2 billion) next year up from the $10 million (Sh1 billion) spent this year scouring for gold deposits.

The company plans to use a total of Sh2.5 billion next year to increase drilling for new mines in Kenya, Mali, Tanzania and Burkina Faso. It also plans to double expenditure for drilling around existing mines to Sh1 billion.

“We have increased the budget for the project…which is primarily designed to scope out the size of the existing shoots and to infill gaps between holes in order to increase the scale and confidence of the resource as we move through the year,” Acacia said in a statement.

“We also plan to test further potential shoots within the Liranda corridor along strike to the east. Further to this, we will undertake regional programmes across the broader 1,600 square kilometre licence area.”

The firm, which is also listed on the Dar es Salaam Stock Exchange, expects to announce its maiden discovery of about 28,000 kilogrammes of the precious metal in the first quarter of next year from its Liranda Corridor project.

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Acacia, which owns three mines in Tanzania, in September wholly acquired the two licences it holds in western Kenya from Lonmin which previously held a 49 per cent stake in a deal valued at $5 million (Sh505 million).

The company’s projected gold find from the Liranda corridor project in Kenya will come as a windfall for Acacia at a time prices for the metal are rising in the global market.

British firm Goldplat was granted Kenya’s first ever gold mining permit in November 2011 and is already exporting the prized mineral from Kilimapesa mines in Trans Mara County.

The imminent mining of gold by Acacia is likely to stir interest from international firms to strike a piece of Kenya’s mineral wealth, which includes gold, coal, iron ore, manganese and rare earth minerals.

Data from the Ministry of Environment and Mineral Resources shows that there is reasonable potential for gold in Kakamega, Vihiga, Migori, Transmara, Bondo, Siaya, Pokot and Turkana as well as minor indications of the mineral in Nandi County.

The value of gold exports grew 41 per cent to Sh978.7 million in the year 2015 buoyed by high prices in the international market and the weakening of the local unit, according to the latest Economic Survey.