Junior mining companies flock to Zaire

Zaire has suddenly emerged as a popular destination for Canadian mining capital as an increasing number of juniors sign agreements for exploration and development in the Central African country.

Alhough Zaire has long been considered prime hunting ground for gold and base metals, its political environment has discouraged investment — until recently.

“Recent significant improvements, including preparations for free democratic elections in July 1997, have dramatically changed the potential for Western mining companies,” states International Panorama Resource (ILP-V) in its annual report.

One of several companies investigating Zaire, International Panorama has secured the rights to develop a copper-cobalt tailings project in the southern part of the country. Gecamines, the state-owned mining company, retains a 49% interest and a net profits return royalty of 1.5%.

The Kambove and Kakanda tailings, waste products of mining in the late 1940s, contain an estimated 61 million tonnes averaging 0.98% copper and 0.19% cobalt.

This year, the junior expects to complete a US$3-million feasibility study on the project before raising the US$45 million needed to construct two solvent extraction-electrowinning plants. Startup, at a rate of 17,000 tonnes per day, is scheduled for 1999.

Arkansas-based America Mineral Fields (AMZ-V), whose major shareholder is whose major shareholder is Jean-Raymond Boulle of Diamond Fields Resources fame, is also directing its treasury towards Zaire.

The junior recently raised US$30 million to rehabilitate the Kipushi zinc mine in southern Zaire, in partnership with South Africa’s Anglo American.

The parters also plan to explore an area comprising 500,000 sq. km in the southern province of Shaba and submit a bid for the development of Gecamines’ Kolwezi tailings.

Substantial funds are also earmarked for eastern Zaire, where Banro Resource (BNRS-C) expects to launch an exploration drive along the Namoya-Twangiza trend through its 36% interest in Sominki, a Zaire-based company.

Vice-president Michael Nikiforuk says that, in terms of size and mineral occurrences, the Namoya-Twangiza gold belt is similar to the Ashanti belt in Ghana, but that it has undergone only limited surface exploration. The 180-km belt contains 10 known gold occurrences.

Banro has raised $22.7 million for the project and has submitted an exploration proposal to Sominki’s board of directors.

Also, Barrick Gold (ABX-T) confirmed that it, too, is investigating exploration opportunities in Zaire.

But, as is typical of exploration rushes, the race to secure rights to Zaire’s mineral wealth has stirred up a number of disputes.

Banro has launched legal action against Mines d’Or du Zaire, a Belgian company which also has a 36% interest in Sominki (the remaining 28% is held by the Zairean government). Recently, a joint venture between Banro and Mines d’Or du Zaire for the control and management of Sominki was terminated, owing to breaches of agreement by Mines d’Or.

Consolidated Eurocan Ventures (KEU-T) and a consortium led by Cornucopia Resources (CNP-T) are also at odds over who will be granted the right to develop the giant Tenke Fungurume copper-cobalt depsoit in southern Zaire (T.N.M., Aug. 26/96).

Although an agreement between Eurocan and Gecamines was expected to close by the end of August, the controversy had not been settled by presstime.

Nevertheless, Eurocan is proceeding with a $120-million finaincing to develop the Tenke Fungurume, where resources are estimated to exceed 222 million tonnes grading 4.42% copper and 0.33% cobalt.