Shanta Gold Limited, the firm undertaking the lucrative gold prospecting project in Western Kenya, now places the existence of the valuable mineral in the Lihranda corridor at 949,000 ounces.
A study commissioned by the firm brings down the results of previous studies by other firms that had estimated gold deposits in the area to be 1.31 million ounces.
According to the independent study by Bara Consulting Limited, the mineral could be mined for nine years and not the earlier projection of 10 years. But this is still subject to viability.
Barrick Gold Limited, the firm that was previously prospecting for the mineral through its subsidiary Acacia Mining -- before selling it to Shanta Gold Limited in August this year -- had estimated the presence of the valuable mineral at 1.31 million ounces valued at Sh164 billion.
In a statement, Shanta Gold Limited said the study was necessary following the transfer of ownership of the project, noting that this was updating the previous scoping study work that was undertaken by the previous firms.
Out of the 949,000 ounces, the new scoping study shows an average annual gold production is expected to stand at 105,000 ounces should actual mining start after three years.
During the first two years of actual mining, the firm will undertake open pit mining that will be followed by underground mining.
According to the study, economic viability of the project will be determined after undertaking infill drilling and technical studies over the next 24-36 months, a sign that the actual mining could start some time in 2024.
“Moreover, should the economic viability of a mine be confirmed, the scoping study estimates a pre-production capital investment of Sh16.1 billion will be required from Shanta prior to first gold production,” the firm, which also has extensive mining operations in neighbouring Tanzania, says in the statement.
It adds: “Assuming Shanta proceeds with the West Kenya project through to the point of gold production, there are long-term benefits that could arise.”
According to Shanta Gold Limited, the benefits include community development, improved infrastructure, creation of employment, development of skills and training.
Further, royalties accrued through gold production will see 70 per cent go to the national government while 20 per cent will be paid to Kakamega county government and the hosting community takes the remaining 10 per cent.
The statement quotes Shanta Gold Limited CEO Eric Zurrin as saying: “The West Kenya project scoping study has resulted in attractive project economics. As with all scoping studies, there is a significant amount of work to be completed before the assumptions can be confirmed.”
He adds: “The board (of Shanta Gold Limited) is committed to making the investment to confirm the viability of a mine with a construction decision expected within three years.”
Shanta Gold Limited is an East Africa-focused gold producer that is currently undertaking gold mining on the New Luika and Singida projects in Tanzania where it holds exploration licences covering about 1,200 square kilometres.
In Kenya, it is prospecting for gold in Western Kenya in the Lihranda corridor project that runs from Kakamega and Vihiga counties and parts of Kisumu and Siaya counties which it acquired from Barrick Gold Limited in August this year.
The western Kenya project is made up of two greenfield deposits; one at Isulu and the other at Bushiangala, and covers an area of 1,161 square kilometres.
