Juniors undistracted by Zaire’s political woes

Serious political unrest is failing to deter a number of North American juniors from exploring for copper and other minerals in Zaire’s Shaba province.

In an attempt attempt to lock up development rights to the Tenke Fungurume copper-cobalt deposits, Consolidated Eurocan Ventures (KEU-T) has had a negotiating team stationed in the capital city of Kinshasa for several weeks.

Other companies have been competing for this asset, including a consortium involving Cornucopia Resources (CNP-T), Inco (N-T) and Phelps Dodge (PD-N), but Eurocan says it has already reached an agreement with the government and state-owned mining company Gecamines.

Tenke Fungurume has a geological resource exceeding 222 million tonnes, with a grade of 4.42% copper and 0.33% cobalt. Included in the resource is a proven reserve, minable by open-pit methods, of 92.6 million tonnes grading 4.59% copper and 0.36% cobalt. Millions of dollars have been spent developing the project, which, owing to decades of political unrest, as well as complex mineralogy and lack of infrastructure, remains unexploited. The largely oxidized deposit is believed to be amenable to solvent-extraction electrowinning.

International Panorama Resource (ILP-V) is also making progress in the central African country, with plans to develop the Kambove-Kakanda tailings project in Shaba. The company points out that its project is more than 1,000 km away from the border with Rwanda, the site of recent unrest.

South African-based Bateman Minerals & Industrial is producing a full feasibility study for the project, which is 51%-owned and operated by Panorama under a joint-venture agreement with Gecamines. The agreement was approved and signed into law by the Zairian parliament in September.

Reserves of tailings are estimated to exceed 61 million tonnes grading 0.19% cobalt and 0.98% copper, and preliminary metallurgical tests indicate recovery rates of 70% for cobalt and 90% for copper.

The capital cost of constructing a facility capable of processing 5 million tonnes per year is estimated at less than US$190 million. The plant will consist of agitated vat leaching, solvent extraction-electrowinning treatment and a sulphuric acid production facility.

Plant construction is expected to begin in May of next year, with commercial production slated for late 1998.

Panorma President Kenneth MacLeod says feasibility projections indicate capital payback can be achieved in the first year of production. Over a 10-year mine life, the project is expected to generate US$900 million in after-tax profits for the company. “This project is based on an average cobalt price of about US$12 per lb,” MacLeod states. Currently, the price is more than US$20 per lb.

The government of Zaire is expected soon to choose from a list of companies that have bid for the Kolwezi tailings project in Shaba. The project is reported to contain 107 million tonnes grading 1.34% copper and 0.26% cobalt.

Among the interested parties is America Mineral Fields (AMZ-V), which is also involved in an effort to revive the dormant Kipushi zinc mine in Shaba. South Atlantic Resources (SEQ-V) has also filed a bid for this huge project.

Sominki project

Elsewhere in Zaire, Banro Resource (BANR-C) is moving ahead with a US$20-million development program on the Sominki concessions in the Kivu region. The junior controls 10 mining permits and 47 concessions encompassing 10,271 sq. km — a land package in the Namoya-Twangiza trend, a 180-km, north-south-trending gold belt believed to be analogous to the Ashanti gold trend in Ghana.

Among the main assets is the Twangiza deposit, 90 km south of Bukavu. At last report, the deposit hosted proven and probable oxide reserves of 5.5 million tonnes grading 4.3 grams gold. The project also hosts an underground sulphide resource and other known resources, which bring the overall estimate to just over 2 million contained ounces.

The Sominki land package includes the Mobale underground gold mine, southwest of Bukavu, which is currently operating at about 20% of capacity (about 10,000 oz. annually). This property is believed to have potential to produce 100,000 oz. gold annually, and, towards that end, Banro has started an exploration program aimed at expanding and upgrading the operation.

The first-phase program, budgeted at US$9 million, will include a 15-hole drill program at Twangiza (to a depth of 300 metres), as well as upgrades to the mine and mill at Mobale. This initial investment is expected to increase annual production at Mobale to 40,000 oz. gold.

Banro had hoped to start work in mid-November, but the refugee crisis affected the supply and transportation of required material. Current expectations are that these routes will be re-opened early next year, with work to follow shortly thereafter. The company recently named Bernard Van Rooyen, a former executive director of Gold Fields of South Africa, as its new president and chief operating officer.

The government of Zaire has a 28% interest in the Sominki. Banro, which recently bought out the interest of a third partner, now holds the remaining 72% interest.