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Ethiopia: MIDROC Strikes Gold Big in Two Reserves
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Addis Fortune (Addis Ababa)
11 February 2008
Posted to the web 11 February 2008
Wudineh Zenebe
Arega Yirdaw (Phd), general manager and CEO of MIDROC Gold, proudly holds confirmation of big revenues to come
MIDROC Gold Mine Plc, one of the subsidiary companies under MIDROC Ethiopia Technology Group, seems to have finally landed a breakthrough gold reserve finding in East Sakaro, Guji Zone of the Oromia Regional State. The reserve, found after four years of intensive exploration, is estimated to contain 17,250Kg of the commodity.
"We are pleased to announce that the mining industry of the country with exemplary competence and reliability is at an important historic juncture," says the press release issued by MIDROC.
The exploration activity was managed and run by MIDROC Gold and a United Kingdom (UK) company, Wardell Armstrong International, who was commissioned to verify the result and present a comprehensive feasibility and environmental impact assessment report.
The January 2008 Wardell Armstrong feasibility revealed that 6,683Kg of the find is proven by exploration, and drilling will take place from 2009 to 2012. The remaining 10,567Kg will need further ongoing optimisation work in order to extract the gold from 2013 to 2017.
MIDROC Gold, the only company involved in industrialised primary gold exploration, was established in the late 1990's by Sheik Mohammed Hussein Ali Al-Amoudi, his wife Sofia Salah Al-Amoudi and the government of Ethiopia with an initial capital of 51.6 million dollars.
Sources told Fortune that the verification of gold in East Sakaro by Wardell Armstrong has left Sheik Mohammed, chairman of MIDROC Ethiopia, overjoyed. Though he was supposedly eager to announce the good news to the public in February 2008, he left for England for business. The opportunity was grabbed by Arega Yirdaw (PhD), who has been serving as the general manager and CEO of the company since 2001 who on February 5, 2008, disclosed the leap forward.
MIDROC Gold was created a few years after National Mining Corporation (NMiC), another subsidiary company of MIDROC Ethiopia, took the 20-year concession of Lege Dembi Gold Mine from the government in March 1998 for 172 million dollars.
The gold mine was transferred from NMiC to MIDROC Gold, which has been managed by Arega.
Another groundbreaking discovery of a 10,743Kg gold reserve was found in Lege Dembi.
The underground work of this exploration started in 2000 and was completed in 2007. The 4.2Km tunnelling work was then excavated allowing Wardell Armstrong to conduct a similar feasibility study.
"Development and exploration of Lega Dembi mine, the first of its kind in the country, is in its final stages and full scale ore extraction is expected to start by the end of 2008," said Arega.
MIDROC started production and exploration on the mine based on the agreement with the Ministry of Mines and Energy (MoME) in March 1998. The gold reserve to be mined in an open pit was estimated at 37,215Kg. An open pit mining life was set at 10 years from 1998 to 2008.
The open pit was re-designed in 1998 and accompanied with further improvements which increased the estimated gold reserve from 37,215Kg to 51,039Kg (37pc). The increase in gold reserve helped extend the planned mining life of the open pit by three years.
The latest finding will enable the mine life to extend by 13 more years with an added gold of 70,000Kg amounting to 1.6 billion dollars.
MIDROC Gold started focused exploration work in 2002 and intensified by obtaining more exploration permits beginning in 2004. Currently, MIDROC Gold is engaged in two other exploration areas. Exploration on the 1,965sqm site in Metekel Zone to the west in the Benishangul Gumuz Regional State started in January 2004.
"We expect even more from MIDROC Gold," says Taye Tafa, head of Metekel Zone.
The second exploration site is in Ulaulo, covering an area of 441sqm and located south of Lege Dembi mine. This exploration kicked off in March 2004.
Alemayehu Tegenu, minister of MoME told Fortune MIDROC's recent achievement is good news for the country as the international price of gold (902 dollars per ounce) has been drastically rising.
"Our interest now is to see them kick off the extraction as soon as they can," said Alemayehu.
The reserve in East Sakaro was first discovered in 1975 by gold prospectors who mined the Sakaro Valley, according to an expert. Sakaro was subsequently visited by two Russian experts; A. Kozarevitha and Makvin. The reserve was confirmed after a geological survey was submitted in the second half of 1979, a time in which visible gold was found northeast of the Sakaro area.
Although Ethiopia's total reserve of gold is yet to be identified; Sakaro as well as areas in Benishangul, Oromia, Tigray and Gambela regional states are believed to include gold deposits.
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Over 20 companies have shown interest to explore gold in Ethiopia.
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