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UK firm discovers gold worth Sh171 billion in Kakamega

NEWS
By Macharia Kamau | February 28th 2017
Residents admire an ore believed to hold gold particles at Rosterman area in Kakamega

A UK firm has announced the discovery of high-grade gold at its mines in Kakamega County.

Acacia Mining said yesterday that it had discovered an estimated resource of 1.31 million ounces of gold at its mines in the Liranda Corridor in Kakamega, whose grade, Acacia added, is one of the highest in Africa.

Mining Cabinet Secretary Dan Kazungu estimates the discovery could be valued at Sh171 billion ($1.65 billion).

The firm, however, said the scale of the find is small and it would need to undertake more tests and drill more exploratory wells. This is with the aim of increasing the resources to upwards of two million ounces, which would make the mines economically viable. It added that it is too early to assign a value to the find.

Acacia said it had found an Inferred Mineral Resource Estimate of 1.31 million ounces of gold at a grade of 12.1 grammes per tonne on the Liranda Corridor within the company’s West Kenya Project.

“This is one of the highest grade projects in Africa today, and we believe that this initial resource is a first step in the delineation of a multi-million ounce high-grade corridor,” said Brad Gordon, the firm’s CEO, in a statement yesterday.

“The discovery of 1.3 million ounces of gold is an encouraging start to what we hope will ultimately be the discovery of a multi-million ounce gold camp, but 1.3 million ounces on its own is small. For the project to be economically viable, we would need the deposit to be at least two million ounces to three million ounces.”

The Kenya Chamber of Mines termed the grade of 12.1 grammes per tonne as “very good” and comparable to gold from major mines in Africa and the world.

Lojomon Biwott, the chairman of the Kenya Chamber of Mines, said gold mined in Kenya has a grade of about five grammes per tonne of gold on average. The global average is eight grams per tonne.

Significant increase

Mr Kazungu said the ministry is in the process of implementing the Mining Act (2016), which would create an enabling environment for the growth of the mining industry

“We are taking significant steps to establish a robust legislative framework to support our developing mining industry,” he said.

Acacia said it plans to spend Sh1.2 billion ($12 million) this year on exploration on the West Kenya project. The majority of this money will be spent on a 45,000-metre drilling programme on the Liranda Corridor. Over four years, the company has spent Sh3.1 billion ($29.5 million) in the Western Kenya mines.

“We expect the drilling to continue on the Acacia prospect for at least a further 12 months, and are targeting a significant increase in the resource to two million ounces prior to the end of 2017,” said Mr Gordon.

The firm has licences to prospect for gold in Kakamega, Vihiga, Siaya and Kisumu. Its other operations are in Tanzania, Mali and Burkina Faso. It is listed on the London Stock Exchange, with a secondary listing on the Dar es Salaam Stock Exchange.

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