Another UK gold firm raises Kenya deposit estimates

UK gold miner African Barrick Gold has raised its estimate of deposits of the precious metal in its Western Kenya block, just weeks after another British firm, Red Rock Resources, raised funds from the London exchange to finance its prospecting activity in the area.

African Barrick Gold announced the improved prospects through a statement on Wednesday following soil sampling and drilling of its two joint venture properties, the Advance Gold JV Properties and the West Kenya JV Properties, with a total of 15,656 soil samples collected from the two sites.

“On the Advance Gold JV Properties, we have completed the drilling of 325 Aircore holes for 12,494 metres with results received for 192 holes. Over 20 per cent of the holes assayed to date have returned significant intercepts of greater than 0.1 grammes of gold per tonne.

The extensive soil sampling and the Aircore drilling programme have formed the bulk of our planned exploration programme in Kenya and these very promising initial results have reaffirmed our belief in the prospectivety of the land package,” said African Barrick Gold.

The company expects more results in the first quarter of this year from additional holes.

Its statement came just weeks after Red Rock Resources announced that it had raised half a million pounds through a corporate bond sale to finance further exploration for gold in its Western Kenya block.

READ: British firm raises cash for Migori gold exploration

Red Rock is prospecting for gold through Mid Migori Mining Company Ltd, a local firm which owns the special prospecting licences for an area of approximately 300 square kilometres.

The company said in the statement that it is confident of striking gold in Migori.

“Based on the technical and economic parameters, the results demonstrate good economic potential and support project advancement to scoping study level,” said the firm in its annual report.

African Barrick Gold has been mapping and collecting soil samples across sites in Western Kenya since October 2012, when it acquired the Kenyan unit of Australia-based rival Aviva Corporation which held a number of prospecting licenses in Nyanza and Western in a joint venture.

READ: Africa Barrick to start drilling gold prospect sites in western

The prospects of viable gold deposits by Africa Barrick will come as a shot in the arm of the local gold mining sector, in the wake of the June 2013 move by London-listed Goldplat Plc to suspend mining operations in Western Kenya.

Goldplat reduced its operations in the Kilimapesa gold mine in Migori to a care and maintenance programme, citing “constraints” in the face of falling gold prices in the international markets.

Kilimapesa became the first project to receive a gold mining licence in Kenya two-and-a-half years ago when then Environment minister, the late John Michuki, granted it a 21-year lease.

The company had estimated gold ore reserves at the site to be more than 8.2 million tonnes.

Needing to produce 10,000 ounces of gold (283.4 kgs) annually for the venture to be profitable, the company only managed an output equal to half of the target.

The Economic Survey 2013 indicates that Kenya exported gold worth Sh13.92 billion in 2012, nearly twice Sh5.65 billion earned in 2011.

Prospects in Kenya’s mining sector have grown in recent years following the discovery of substantial reserves on valuable minerals such as gold, oil and rare earth minerals, raising expectations of significant foreign income.

Australian mining company Base Resources is set to start shipment of titanium from its Kwale mines, expected to generate at least Sh60 billion in cash surplus over a 13-year lifespan.

The titanium mines are expected to net Kenya at least Sh19 billion in royalties and tax revenue over the lifespan of the Kwale mine, as per Base Resources’ estimates.