Gold rush expected in Western Kenya within 10 yrs years

Rising gold prices in the international markets have intensified prospecting in known gold fields in western Kenya as investors seek new investment streams away from the turbulent currencies market.

Last week, the international price of gold averaged $1,755.5 an ounce and Merrill Lynch, the wealth management division of Bank of America projects global gold prices reach $2,000 an ounce in the next 12 months.

Recently, Australian mining company Aviva Corporation struck high grade gold deposits in Bushiangala, Kimingini, Bukura and Shitole near Kakamega town, as well as copper at Bumbo, all in western Kenya.

Aviva, which is listed on the Australian and Botswana Stock Exchangees, recently raised $6 million to further fund prospecting for gold, copper and zinc in an area covering 2,888 kilometres square in Western Kenya.

Company managing director Lindsay Reed said the named areas lie in a known gold belt and that previous prospecting identified significant potential for gold, now confirmed by the company’s ongoing drilling works.

Kenya is said to be preparing to issue a gold mining lease to Goldplat this week, for the company to exploit large gold deposits in Narok. (READ: Kenya to award first gold mining licence next week )

Surveys by both the Kenya government and private companies have revealed large gold deposits around Migori and Kakamega in western Kenya, which means there is a possibility of large scale mining that could help Kenya diversify its revenue streams, reducing the country’s reliance on horticultural and tea exports, tourism and remittances from abroad, as the country’s top foreign exchange earners. Further, the ongoing turmoil in the Euro Zone — one of Kenya’s biggest trade partners — has eroded the country’s exports earnings.

More than 10 international mining firms have intensified their operations in western Kenya, which mining experts say could experience a real gold rush in the next 10 years. Companies like Josich International who have mining operations in Tanzania and Kenya are among the recent entrants. Others are Africa Queens Mines, a Canadian resource exploratory firm; London-listed Goldplat Plc and Mid Migori Mining Company Ltd, a subsidiary of Red Rock Resources that is also listed on the London Stock Exchange. Already, UK firm Goldplat Plc is mining gold, albeit on a small scale, after discovering large deposits in western Kenya five years ago.

Potential deposits

Estimates from the Ministry of Environment and Natural Resources show that Migori’s gold capacity alone stands at 34 tonnes, whic could earn the country close to $670 million a year.

Earnings from the mineral — currently exploited by artisanal miners — however stood at $230 million in 2010, mainly since the small prospectors lack equipment for commercial mining.

Mr Reed said Bushiangala and Kimingini prospects have potential of 8.29 grammes per tonne (g/t) of gold from 98 metres deep and 12.71g/t from 139 metres respectively. Bukura 0.67g/t gold from 49 metres and 2.23g/t from 53 metres at Shitole.

In July 2010, Aviva and AfriOre International signed a joint venture agreement which allows the former to earn up to 75 per cent of AfriOre’s western Kenya mining project. Aviva is required to spend $3 million over three years on survey to map out potential mining locations. Mr Reed said Aviva will initially earn 51 per cent stake in Ndori and Siaya fields. He said Aviva has three drilling rigs operating in the western Kenya project and out of 88 holes drilled, the company has registered encouraging results from 21 holes which show existence of precious minerals.

The Bumbo base metals project area encountered high grade copper, zinc and silver in the initial drilling, and minerals were found at least five metres from the surface.

Western Kenya has more than 200 recorded artisanal gold prospects, with a recorded production of more than 200,000 ounces of gold.