Azim Nathoo
27 June 2005
Nairobi — A Canadian company has acquired an option on six exploration permits for copper and nickel in Uganda from a local Ugandan company, Rwenzori Copper and Nickel Ltd.
This comes at a time that copper prices have hit new highs of $1.61 per pound, reflecting dwindling inventories in world markets and and high demand for the product.
Analyst now predict that interest in mineral exploration rights in Uganda is bound to soar.
The Canadian company is listed on the TSX Venture Exchange in Toronto under the trading symbol "VA" (Vangold Resources Ltd).
This is not the first time Vangold has attempted to explore for minerals in Uganda. In the mid 1990s, with joint venture partner, AVIM, a South African mining company, Vangold spent over $2 million exploring for copper and nickel in northwestern Uganda, respectively.
A ball mill, crusher and concentrator used in the extraction gold by Tulawaka Gold Mining Company in north west of Tanzania. An extraction facility at Kasese, in Uganda which can be used for recovering cobalt from pyrite mill tailings is in place.
Entering Vangold's office in the heart of Vancouver's financial district, one notices a picture of President Yoweri Museveni hanging on the wall of Vangold's president and CEO, Dal Brynelsen.
Mr Brynelsen believes that President Museveni has created an environment conducive for foreign investment in Uganda. He says that the new Ugandan Mining Act is set to global standards and is particularly encouraged by the three-year exploration period granted under the licenses.
"This gives us a greater chance to find a significant ore body," comments Mr Brynelsen, the founder of Vangold, who has over 30 years of experience in mining.
In an interview with The EastAfrican, Mr Brynelsen cited the lack of venture capital as one of the major impediments to doing business in Uganda. He pointed out that the best way to attract venture capital was to encourage Western governments to give tax incentives to investors.
The five areas that Vangold has optioned - Dugalea West, Rubo, Kabili, Dwimbi and Dubalea - have a similar geological environment to that of the Kilembe mine, which was operated by Falconbridge Mines from 1950-1972.
In addition, Vangold has optioned a prospect in Southwestern Uganda known as Kafunzo.
"These exploration areas offer attractive targets for identification of economic copper-cobalt within a historic mining district" he said.
He added that some infra-structure was in place at the Kilembe mine, while an extraction facility at Kasese (near Kilembe), which can be used for recovering cobalt from pyrite mill tailings.
Prospecting commenced in 1947 and a major discovery was made in 1950. The mine started operating in 1956.
The proven ore reserves of Kilembe are over six million tones, with the principal economic minerals being copper, cobalt and nickel.
Currently, a Canadian exploration company, Uganda Gold, has entered into a joint venture agreement to explore and develop the mine.
Vangold plans to commence first phase field exploration later this year, once all the technical and geological reports are completed.
Be the first to Write a Comment!
Copyright © 2005 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
