8 March 2014

Ethiopia: Stratex Relinquishes Gold Exploration Due to Low Potential

The British mining company that has been prospecting for gold in the Tigrai and Afar regional states, Stratex International Plc, has relinquished three gold exploration projects. In a statement sent to The Reporter on Thursday, Stratex said that though it has discovered gold deposits in different localities in the Afar and Tigrai regional states, three license areas have been relinquished due to technical reasons.

Stratex relinquished the Tendaho, Berhale and Tigrai license areas. Stratex CEO, Bob Foster, commented, "some projects, including the Tendaho project (Megenta,) have now been relinquished where our ongoing exploration has indicated that the discovery potential is low. Relinquishing such projects is an absolutely critical part of our exploration strategy and ensures that we manage and direct our financial resources to best effect."

According to Stratex, the results of the latest drill campaign on the Tendaho (Megenta) prospect confirmed earlier observations of gold-rich but very narrow veins and zones of silicification but no robust continuous wide mineralized systems were intersected. "Relatively deep drilling was undertaken in the hope of intersecting stronger mineralized zones in more competent basement rocks beneath the young basalts and sediments of the Rift Valley but this did not prove successful. Consequently, the license has now been relinquished," the statement said.

According to the company, vein-type gold mineralization was identified in Berahale but subsequent more-detailed mapping and sampling failed to reveal anything of real significance and the license has been relinquished. Stratex said exploration of the Tigray license lead to the discovery of high-grade gold veins in the Mariam Hill area. However, the company said more detailed mapping indicated that the veins were of limited width and although flat lying, were sufficiently widely spaced apart to mean that they could not be a viable mining target. Consequently this license has also been relinquished.

The Afar Project comprises of the Tendaho license in Ethiopia and the multiple licenses in Djibouti that include the Pandora prospect. Exploration of these licenses was funded by the Thani-Ashanti Alliance and managed by Stratex. The Thani-Ashanti Alliance was a joint venture between Dubai-based Thani Emirates Resources Holdings Ltd and Anglo Gold Ashanti ("AGA.") However, AGA has reduced its exploration activities worldwide and as a result, has withdrawn from the joint venture. Stratex said it is now working closely with Thani as the sole partner to take this project forward and also consider other opportunities in the region.

Despite the ups and downs encountered in the exploration projects, the company remains positive about the potential for a discovery of gold in the northern part of the Ethiopian Rift Valley. The company is awaiting awards of two new licenses in the Rift Valley covering areas where remote sensing studies have indicated good potential for further discoveries. Gold has become Ethiopia's major foreign currency earner next to coffee.

The country earns more than 600 million dollars from mineral exports; gold contributes to 90 percent of the earning. To date, MIDROC Gold is the only company engaged in large-scale mining. MIDROC annually exports four tons of gold, mainly to Switzerland. Recently, the Ministry of Mines granted a large-scale gold mining license to Ezana Mining, a local mining company. National Mining Company, one of the subsidiary companies of MIDROC Ethiopia, has also discovered a large primary gold deposit in the Tigrai and Oromia Regional States. An Egyptian company, ASCOM Mining, discovered gold in the Benishangul Regional State. A British mining company, Nyota Minerals, discovered a high quality gold ore in the Wellega Zone, Tulu Kapi locality. Artisanal miners are also playing a major role in gold export. More than one million people are engaged in artisanal mining. Last year artisanal miners sold 8.3 million tons of placer gold valued at 420 million dollars to the National Bank of Ethiopia.

Copyright © 2014 The Reporter. 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 publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.