Monday, September 8, 2014

Renaissance dam reservoir may cover gold deposits

Ethiopian Reporter

Nyota Minerals seeks permit to extract deposits

  The artificial lake that will be created as a result of the construction of the Grand Ethiopian Renaissance Dam (GERD) in the Benishangul Gumuz  Regional State will cover gold deposits, it was learnt.

A senior geologist at the Ministry of Mines told The Reporter that there are alluvial (placer) gold deposits around the Grand Ethiopian Renaissance Dam. Artisanal miners have been panning placer gold in the region for the past many years. The expert said it would be wise for the government to extract the gold before finalizing the construction of the dam and start holding water. “Once the dam is built and water is stored in the reservoir this it will cover the placer gold deposits,” the expert said. “Once it is covered by water recovering the gold will not be economically feasible.”

The expert went on to say that since there are placer gold deposits in the area it is wise to allow small-scale gold producers extract the deposits as soon as possible. “It can generate a significant amount of foreign currency.”

This week Nyota Minerals, a British gold exploration and development company engaged in gold exploration projects in western Ethiopia, announced that it is seeking a permit from the Ethiopian Ministry of Mines to mine alluvial gold deposit adjacent to the Blue Nile River.   

In an operational update released on Thursday Nyota said discussions with the Ministry of Mines are continuing regarding the potential for Nyota's wholly-owned subsidiary, Towchester, to mine and treat the alluvial river gravel deposits adjacent to the Abay River (Blue Nile) that bisects the Northern Block licenses. Nyota said these gravels are known to be gold-bearing and are being hand-dug and panned for gold by local people at a number of localities within the licenses. “The areas will, within a few years, be flooded by the Grand Ethiopian Renaissance Dam, a new hydroelectric power dam being constructed on the Blue Nile,” the company said.

Alluvial gold deposits in Ethiopia are usually reserved for exploitation by artisanal miners. However, the company said as the deposits will be flooded, large-scale mechanized mining to maximize potential gold recovery is receiving favorable consideration.

The flooding caused by the dam will not affect the highest priority hard rock gold exploration targets in the company’s Northern Block licenses.

Nyota Minerals has submitted to the Ethiopian Ministry of Mines renewal applications for both of its Northern Block licenses.

The Reporter can confirm that officials of the Ethiopian Ministry of Mines and Nyota are discussing the matter. The Minister of Mines, Tolossa Shagi Moti, told The Reporter that Nyota asked the ministry to be given a small-scale alluvial gold production license. “They have asked us and we are reviewing their request. We are holding talks with them. It has not been decided yet,” Tolossa said.

“We are looking on the possibility that they can produce alluvial gold. There are many things that we consider. It can be done with simple technology. But we have to see the country’s mining law, impact on the environment and other related issues, ” the minister said. 

Nyota Minerals Limited is a gold exploration and development company dual listed on the London Stock Exchange and Australian Stock Exchange. Nyota has discovered a large amount of primary gold deposit in Tulu Kapi locality in western Wollega. The gold deposit at Tulu Kapi is estimated at 24.9 tons.  Nyota recently sold its 75 percent share in the Tulu Kapi mine to a company called KEFI Minerals, a London-based mining firm.

Nyota also holds exploration licenses covering regional gold targets in the Northern Blocks (approximately 100km north of Tulu Kapi), which the company believes have the potential to become future standalone projects.

GERD is located 600 km-north west of Addis Ababa, in the region of Benishangul Gumaz along the Blue Nile. At the end of the works, the dam will be the largest dam in Africa: 1,800 m long, 170 m high and with a total volume of 10 million cu.m. The dam will have the capacity to hold 63 billion cu. m. of water on 1800 sq km of land.

A senior official at the GERD project told The Reporter that gold deposits are found around the project. The official said the government is compensating and relocating the people who pan gold in the locality. 

Another mining firm, ASCOM Mining, has discovered a large primary gold reserve the area.