Nearing 2013 production & adding plus-1Moz tonnage en route
DRC gold junior Mineral Invest International MII AB
Throughout the Cape Town-held Mining Indaba proceedings, a raft of reports have emerged, deliberating the merits of mineral exploration in the Democratic Republic of Congo (DRC). Many note the enormity of the Randgold Resources/AngloGold Ashanti Kibali project in the northeast of the country; on track to 2013 year-end production with proven reserves of 27.5 million ounces of gold. Plenty seek to rank the abundance of known natural resources in favour of early-moving country risk. But while many write-ups state that ambitious early-moving juniors will lead the way into the DRC, few let the companies do the talking.
Just 20 kilometres west from Kibali is the 1,442 square kilometre Wanga license area home to Stockholm-headquartered near-surface gold explorer and developer Mineral Invest International MII AB (STO: MII) (“Mineral Invest”). This junior has focused on the highly prospective Kilo-Moto gold belt in the northeast of the DRC and is on track to commence near-term gold production from tailings in 2013 while delineating resources of at least 1.5 million ounces (JORC or NI43-101 compliant) for the year thereafter. As an established country player and joint venture partner of DRC mining house Office des Mines d’Or de Kilo-Moto (“SOKIMO”) (Mineral Invest: 65 per cent / SOKIMO: 35 per cent), Mineral Invest’s story already represents what it takes to be an aggressive junior gold explorer and developer in the DRC, and the next chapter will take the team swiftly onto producer status as it continues adding to its resource inventory.
“This is a great opportunity and our local team has done a tremendous job in positioning our company very well in the DRC,” says CEO Jonas Eriksson.
“It’s an extremely rich resource area—one of the most gold-rich in the world today—and now well established on the radar,” agrees Industrial Advisor Dr. Barrie Oakes.
“The Kilo-Moto gold belt has been sitting there for years since independence from the Belgians in the 1960s and only Moto Gold Mines had previously chosen to go in there previously. Things changed under the established government, and soon Moto sold out to the Randgold Resources-AngloGold Ashanti joint venture which is almost adjacent to the MII license area.”
The presence of tailings, while by no means the full extent of Wanga’s envisaged production profile in the long-term, has armed Mineral Invest with a range of benefits. In addition generating fast-tracked revenue for the company and for SOKIMO, justifying the setting up of their joint venture alongside an aggressive exploration programme (a move rarely seen by junior miners)these historic tailings today represent the start of an exciting Kibali-neighbouring project in one of the world’s most keenly watched gold belts.
Tackling tailings & ongoing exploration
Describing how Mineral Invest has looked at Kibali in formulating plans for its ground nearby, Eriksson says that the company has focused on tackling its large landholding divided over five licenses by staying focused on exploration, while capitalising on the near-term revenue potential of its tailings.
“We located the tailings at the abandoned Tendao Mine very early on, practically as soon as we got onto the property. That triggered the very early initial campaign that we completed back in late-2009,” he recalls.
“SOKIMO pinpointed the historical tailings area, but they knew little about them from a detailed perspective. Under Barrie’s leadership we initiated thorough investigations, concluding that the tailings offer a good opportunity for generating early cashflow. Being the small company that we are, this was a very interesting possibility for us.”
Field studies are ongoing, today aimed at identifying the best process for production. Works are backed by a rights issue which closed in December and raised capital for two main objectives: To advance the tailings survey and processing plans and to support Mineral Invest’s exploration agreements with SOKIMO, which include delineating at least 1.5 million gold ounces in resources.
For the tailings, a focused sampling programme is underway and small start-up pilot gold production from alluvial deposits at the historic Tendao mine is imminent. These works are part of a separate tailings extraction agreement with SOKIMO (SOKIMO: 35 per cent/Mineral Invest: 65 per cent) and cover a large area over which the tailings are located.
“They include ore not only from the Tendao mine itself, but from a number of satellite deposits they also used as feed ore in for processing,” Oakes explains.
“We’ve traced the tailings for around 1.8 kilometres along the Wanga River valley and they extend for up to around 600 metres across the valley itself. Quite an exceptional volume and area of tailings were produced. According to historical studies they grade at around just under a gram per tonne of gold.”
Although a lower grade resource, the tailings are perfectly amenable to modern processing methods capable of generating reasonable recoveries from the material. Furthermore, from the numerous alluvial gold deposits in the area, historical production targeted a number closest to the Tendao mine but there are many deposits along the river and surrounding tributaries which remain relatively untouched.
“The Tendao mine itself wasn’t fully exploited. Belgian explorers of the colonial 1960s period had begun looking to go underground at the moment when the Durba mine was discovered. The Belgians decided to move all their mining and processing equipment from Tendao to Durba,” Oakes says.
“Historical drilling records indicate additional primary resources were intersected at around 100 metres below the current level of workings. A number of shallow open pits to a depth of about 25 metres were excavated in the weathered crust. They never really exploited the hard rock itself except in shallow pits.”
Around the Tendao mine deposit, Mineral Invest has a bedrock resource, alluvial resources and tailings resources. Another known deposit exists to the north—due to be investigated during the year—and the team’s exploration license bordering the Kilo-Moto gold belt has never seen modern mining and exploration.
“That’s why we are setting up an airborne geophysical survey to identify potential mineralised structures within the license. This will be followed by ground surveys on promising targets” Oakes adds.
Building on its exploration and joint venture agreements with SOKIMO, Mineral Invest is also negotiating taking over the existing open pit CAP mine. These conversations are the latest in a growing trend between the partners; Mineral Invest as a respectable DRC explorer-incoming producer and SOKIMO as a national entity scouting out the ideal project developer to advance these gold-rich tenements.
A Junior with Long-Term Gravitas
In the months to come, Mineral Invest’s decision on the processing of tailings will take shape, as will continued exploration efforts progressing the 1.5 million ounces resource delineation target following the aeromagnetic survey. Underpinning both focuses, Eriksson says, is the company’s belief in the DRC government’s approach to mining.
“The kind of business relationship that we have with SOKIMO is fundamental. What has struck me during our negotiations that led to our exploration license and those that led to us signing the joint venture in September, 2011, was the government’s sophistication,” he says.
“At the end of the day, this is a positive development for the country [aimed at] building economic growth around resources and SOKIMO is a driving force in that regard.”
The presence of Randgold and AngloGold Ashanti carries its own connotations for the DRC. These large gold groups, whose project continues to advance ahead of schedule, are in line to do well by moving into the country ahead of the pack. This proves attractive to their peers, as does the example that Mineral Invest continues to set for would-be junior mining entrants.
“For the big guys, if they aren’t the first mover they are definitely the second. Look at the map. Look who is there and who isn’t and the positioning taking place. There is no longer a question on if they will approach juniors like us, but when. A partner of magnitude and capabilities is always a serious force and one to listen to once they have decided to move in,” Eriksson says.
“We were one of the very few first-movers and we’ve experienced that reluctance where companies won’t move at all, but all of a sudden it seems that the doors are open. People are starting to understand the DRC—the leadership, the strong government support and focus on investment.”
As an early-mover equipped with a large landholding, near-term production and masses of exploration upside to support the delineation of significant gold resources in the years to come, Mineral Invest is in an immensely good position. The sheer potential of the Kilo-Moto gold belt continues to attract multinational gold groups. For a junior the size of Mineral Invest to establish itself with such a highly prospective package of licenses complete with historic production is rare. Kibali’s speedy progress exemplifies the DRC government’s supportive stance on mining—and as Mineral Invest proves its value to the markets through 2013 production and ongoing resource expansion, this emerging gold production story is a gripping one.