Canadian Firm Raises Stakes in Search for Gold

Business Daily (Nairobi)

Moses Michira

4 April 2011

Africa Queens Mines, a Canadian resource exploratory firm, has acquired a license to prospect for gold in Western Kenya raising stakes in an industry that has caught the attention of multinational firms keen on exploiting precious metal deposits in the region.

The Canadian firm, through its local subsidiary AQ Kenya Gold, acquired exploration rights previously held by Kenya Discovery – a private firm – to explore for gold in Ugunja.

The company also signed a similar agreement with Abba Mining, another local firm, for its exploration license in Migori District in a revenue sharing arrangement that will see the multinational meet costs of mining.

Africa Queens chairman and chief executive Irwin Olian said the company was in several joint venture negotiations with other partners over exploration licenses covering a number of other “highly prospective” areas.

“We are excited about our prospects for success in Kenya and are looking forward to our field exploration programmes here in 2011,” said Mr Olian, adding: “We are committed to achieving long-term success.”

Africa Queens also has its own prospecting license from the Mines and Geology Department for exploration of an 850 square-kilometre area in West Pokot, where it hopes to find nickel and iron ore in addition to gold.

Though Africa Queens has not revealed its budget for the Kenyan exploration, it said that it is investing about Sh20 million ($200,000) in the preliminary phase of the exploration, in a four-part gold mining venture.

The Canadian firm’s entry comes after Aviva Corporation, listed in both the Australian and Botswana Stock Exchanges, bought exploration license owned by AfriOre International for rights to explore for gold in Western Kenya.

Aviva said the project has significant potential after the discovery of more than 200 known gold occurrences within the license areas while committing to invest over Sh250 million ($3 million) over a three-year period in the venture.

“We have mapped out and costed a scope of work and are confident the $3 million budget will allow us to comfortably comply with the license conditions,” said the firm’s chief executive Lindsay Reed in a statement.

Set up camp

Already, UK firm Goldplat Plc is mining gold, albeit on a small scale, after discovering large deposits in western Kenya five years ago.

The precious stone spans the expansive Migori and Trans Mara counties.

At least a dozen gold exploration firms have set up camp in the country, opening up a prospecting enterprise for Kenyan businessmen hoping to enter into joint ventures in mining.

Mr Moses Njuya, the chief executive of Hy-Q Enterprises, Mr Misheck Nkurunyu, and Mr James Lenges are among businessmen who have invested in gold exploration in Samburu and West Pokot in the North Rift Valley province.

Global price rallies for precious metals have stirred fresh interest in the country’s mining industry.

From a modest Sh2 million per kilogramme at the close of 2008, gold prices have risen sharply to averages of Sh3.6 million per kilogramme.

With the entry of several prospecting firms, the country is set to produce more gold than the Sh2.2 billion worth mined in 2009.

“We have seen a rise in the number of investors seeking prospecting licenses, especially with the discovery of gold and iron ore,” said Mr Moses Masibo, the acting Commissioner of Mines and Geology, in an interview last week.

AllAfrica – All the Time