MINING IN AFRICA — African Minerals sees great potential in continent

The mineral potential of South Africa and Zambia is clearly demonstrated by the numerous, elephant-sized deposits of copper, gold, platinum and diamonds discovered there in the past century.

African Minerals, a private company controlled by Ivanhoe Capital (which, in turn, is controlled by the Friedland family), has developed a strong presence in both countries and is working to expand its holdings.

Eric Friedland, a director of African Minerals, sees tremendous potential in the two countries and predicts that a flood of exploration companies will move into the area over the next few years.

African Minerals’ holdings in South Africa include the Lebowa concessions, which cover roughly 5 million acres in the Northern Transvaal Region.

The area is home to some significant deposits, including De Beers’ nearby Venetia diamond mine, which produces about 5 million carats annually from an open-pit operation, with an average grade of 118.5 carats per 100 tonnes.

African Minerals acquired the exclusive right to explore for diamonds on the Lebowa concessions from the people of the Lebowa Homeland.

Friedland points out that securing such a large ground position was a major coup for the company and would be difficult to duplicate. The concessions are split into two large ground positions and four smaller ones.

Large geophysical project

Last year, African Minerals spent roughly US$1 million on a low-level, airborne, geophysical program over the concessions. It was the second-largest program ever conducted in the country.

The geophysical work outlined more than 1,000 targets, and this year’s program, budgeted at US$2 million, will attempt to determine which of these should be first subjected to drilling.

African Minerals has three crews working on a follow-up ground program of grid sampling over various targets. The program is set up to take 40-kg samples on a 100-by-100-metre grid, with each sample gravity-concentrated to a 10-kg sample on site. The concentrates are then sent off-site to be analyzed for diamond indicator minerals.

Although exploration work will focus on diamonds, Joseph Kajszo, vice-president of exploration, says the potential for base and precious metal mineralization will also be investigated.

Friedland is excited about the overall potential of the Lebowa concessions, where no systematic exploration has been carried out because of the region’s status as a tribal homeland.

The company is also determined to prolong its success in Zambia, which began in 1993 with the acquisition of the Chantete emerald property in the northwestern area of the Kafubu Emerald Field.

African Minerals is mining rough emeralds from a small, underground operation and is putting in place its own gem-stone cutting operations.

Serious Intentions

“We don’t expect this to be a big money-maker,” Friedland concedes, adding that the operation might make $1 million per year in profits.

“The acquisition got us into the country and shows we are serious.” The company subsequently acquired control of exploration licences in northwestern Zambia, where several major mining companies are active. Kajszo says the area is highly prospective for copper, as well as diamonds and precious metals.

The company has also acquired prospecting rights at the southern end of the Zambian Copper Belt, home to some of the richest copper mines in the world.

Preliminary exploration work on its Zambian holdings this year is budgeted at roughly US$1 million.

With a sizable base of grassroots prospects now in place, Friedland is working to acquire a more advanced project.

African Minerals has initiated talks with state-owned Zambia Consolidated Copper Mines (ZCCM) in an effort to acquire some of that company’s extensive, undeveloped copper projects in the Zambian Copper Belt. It is particularly interested in the oxide-copper projects identified by ZCCM.

Following the acquisition of a more advanced project, African Minerals plans to apply for a listing on the Toronto Stock Exchange, which it hopes to receive as early as this summer.