Modern Mining October 2018

COMMENT

Sudan – the new gold frontier

A lthough we are often told that South Africa’s gold mining in- dustry is pretty much in its death throes, the country is neverthe- less still the biggest gold pro- ducer in Africa with 2017 production hav- ing amounted to around 150 tonnes – which makes it the world’s eighth biggest producer. If I were to ask readers which countries are the second, third and fourth rated gold producers on the continent, they would prob- ably answer that Ghana, whose production is currently running at around 80 tonnes of gold a year, is in second place followed by Mali (approximately 60 tonnes) and Burkina Faso (about 55 tonnes) in third and fourth places respectively. If our readers were to answer like this, they would be wrong. Ghana, in fact, no longer holds the number two spot. Its place in the rankings – if I am to believe the figures I see on the Internet – has been usurped by Sudan, which has tradi- tionally not been seen as a gold-mining country and which has very few commercial-scale gold mines. Indeed, the only one I can think of is the Hassai open-pit gold mine, which was opened in the 1990s. As far as I know, Hassai is still operating although some diligent ‘googling’ fails to shed much light on its current status. Somewhat like Burkina Faso, Sudan has come from nowhere as a gold producer. Ten years ago, its gold output was insubstantial – probably no more than two tonnes a year. Since then the growth has been meteoric but almost entirely fuelled by artisanal miners. The 40-tonne-a-year mark was reached in 2011 and the 100-tonne mark was passed last year, with approximately 105 tonnes being produced. This year is developing into the best year yet, as Sudan’s Minister of Minerals reported in July that production over the first six months of 2018 was around 63 tonnes, which means that the total for the year could easily be 120 tonnes. One might ask why the evidently huge gold resource in Sudan has not attracted more interest from western mining companies. I imagine the answer would be that the country is not perceived as being a particularly stable jurisdiction (one thinks of the unrest in Darfur a few years back and the secession of South Sudan in 2011). Nevertheless, there is at least one western company, Canada’s Orca Gold, listed on the TSX-V and headquartered in Vancouver, which has entered the country in a big way (see also page 8 of this issue), investing significant sums in its Block 14 project, located

in the desert 900 km north of Khartoum. Orca has been in Sudan since 2011 (at that stage the company was still known as Shark Metals) and since then has completed several phases of exploration and development work, including a PEA, a PFS and a revised PEA. Currently a Feasibility Study (FS) is underway and the results are expected in November. The project – which now has an indicated resource of 3,3 Moz – was originally contem- plated as a 3,4 Mt/a operation but the current FS is based on a 6 Mt/a plant throughput. This expansion has been made possible not only by a growth in the size of the resource at Block 14 but also the identification of a major water resource – known as the Area 5 aquifer – able to support this level of production. While a development decision by Orca will obviously have to await the results of the FS, it’s a fair bet that this is a project that is almost certain to go ahead – after all, no one is going to leave more than 3 Moz of gold just sitting in the ground. The Orca management – mainly drawn from the old Red Back Mining which was absorbed by Kinross in 2010 in a massive US$7,1 billion deal – has a good track record in African mining. The CEO is Richard Clark, who was President and CEO of Red Back, while the President is Hugh Stuart, who was VP Exploration for Red Back and oversaw the growth of the company’s gold resources to over 18 Moz. Kevin Ross holds the COO position. He too is a veteran of Red Back and during his tenure with the com- pany as COO directed the development of the Akwaaba Deeps underground mine in Ghana, the Chirano plant expansion, also in Ghana, and the Tasiast plant expansion in Mauritania. Interestingly, Australia’s Resolute Mining – which is currently developing one of the most advanced underground gold operations in the world at its Syama mine in Mali – now has a major stake in Orca with an almost 16 % shareholding. Announcing the C$22 million investment earlier this year, Resolute’s CEO, John Welborn, described Orca as “a first mover in a region which is host to the largest gold rush seen in Africa in centuries.” If current artisanal activity in Sudan contin- ues to grow and if Orca does eventually move into production, it is certainly not impossible that the country could dethrone South Africa from its position as the African continent’s big- gest gold producer. As they say, “Who would

This year is developing into the best year yet, as Sudan’s Minister of Minerals reported in July that production over the first six months of 2018 was around 63 tonnes, which means that the total for the year could easily be 120 tonnes.

have thought?” Arthur Tassell

October 2018  MODERN MINING  3