Exploration and Mining Companies Operating in Eritrea

Development News

BY TESFANEWS

Exploration started in liberated Eritrea in 1996 straight after the promulgation of the Mining Law. The level of participation by foreign companies has increased significantly following the discovery of the high-grade VMS deposit at Bisha.

So far, there are more than 16 mining and exploration companies operating in Eritrea coming from Australia, Bermuda, Canada, China, Libya, the United Arab Emirates, and the UK.

These companies collectively operate 35 projects. It includes some advanced exploration sites (where mineral resources have been established, and, in some cases, where scoping level and feasibility studies are completed) to early-stage prospecting projects (where reconnaissance mapping is being carried out).

The total area covered by exploration and mining activities is nearly 14,000 km2. As a result of exploration during the past ten years, mineral resources have been identified containing over 3M oz gold, 41M oz silver, 1,600M lb copper, and 4,200M lb zinc.

In addition to these resources, the level of interest to secure new ground by existing, as well as newcomers, is increasing.

The Ministry of Energy and Mines classified the companies operating in the country as “Development Stage Companies” and “Exploration Companies

DEVELOPMENT STAGE COMPANIES

The number of companies that have reached the development stage has increased in recent years as investor confidence returns.

1) Bisha Mining Share Co (BMSC)

BMSC is a joint-venture company owned by Eritrea’s National Mining Corp (ENAMCO) and Canada’s Nevsun Resources Ltd. Its main mineral properties include the Bisha property in the west. Bisha contains high-grade gold, copper, and zinc deposit and other satellite deposits.

The Bisha mining license was granted to BMSC in January 2008 after exploration, which started in 2002 and produced a positive feasibility study. The project has already started production of 1,000 oz of gold daily.

2) Colluli Mining Share Company (CMSC)

Colluli has one of the world’s largest solid salt, near-surface high-grade Sulphate of Potash (SOP) reserves of 1.1 billion tonnes or 200 years of mine life.

This open-cut, high-grade potash project is being developed by Colluli Mining Share Company (CMSC), a 50:50 joint venture partnership between Australia’s Danakali and Eritrean National Mining Corporation (ENAMCO).

3) Sunridge Gold Corp

Sunridge Gold is a junior Canadian mineral exploration and development company that holds three contiguous exploration licenses – namely Medrizien, Debarwa, and Adi Nefas. The licenses partially surround Asmara and hence collectively are known as the Asmara project.

4) Chalice Gold/Sub-Sahara Resources

A prospecting license was originally granted in 1998 to Dragon Mining in a locality known as Zara in the northwest. After a one-year regional reconnaissance, the license was converted to an exploration type.

Since then, all operations and management have been assigned to Australia’s Sub-Sahara Resources, which has been actively exploring in Eritrea for the past nine years. The initial properties that Sub-Sahara secured contained the VMS prospects surrounding Asmara but this entire land package was sold to joint-venture partner Sunridge in 2007.

Since then, Sub-Sahara has focused on the Zara project, and was rewarded with a definition of over 1.0M oz of gold at the Koka prospect with an average grade of 6.31g/t gold. During the credit crunch, the company had to halt all operations for almost a year and reduce its employees.

Sub-Sahara was then taken over by Chalice Gold Mines Ltd, which now funds the project completely.

5) NGEx/Sanu Resources Inc

Based on previous exploration works, Sanu continues its exploration activities in the Kerkebet and Mogoraib exploration licenses targeting VMS deposits.

Generally, most of the work Sanu has accomplished is database entry, geological mapping and map compilation, and some follow-up and prospecting works in the Kerkebet and Mogoraib licenses. The most notable achievement is the discovery of the Hambok deposit in the Mogoraib license area immediately southwest of Bisha, along with promising drill intersections in Aradaib at the Kerkebet license area and north of Bisha.

EXPLORATION COMPANIES

The Ministry has received applications covering a total surface of about 30,000 km2. This is a clear indication that Eritrea is becoming an exploration hot spot.

6) Alpha Exploration Ltd

Alpha Exploration, a British Virgin Islands-registered company, engaged in the exploration of the Kerkasha gold and copper project in Eritrea since January 2018 that covers an area of 973km². The license area has the potential for gold & base metal mineralization.

On September 2018, Alpha was granted an Extension Area (55km²) in the northeast of the original Kerkasha Licence that increased the area of the Kerkasha License to 1,028km².

7) Andiamo Exploration Ltd

Andiamo is a UK junior exploration company; still a private company. Andiamo was granted a 723 km2 exploration license in the Haykota area in July 2009, having already identified targets from satellite images and from previous work in the area in 1998 by BRGM/La Source. Andiamo started work on the ground two days after receiving the license.

The area lies immediately southwest, and on strike, with Bisha, and is adjacent to NGEx/Sanu’s Mogoraib exploration license to the north, and to Erilib’s area to the south. It is considered to be highly prospective for shear-hosted gold and for VMS-type mineralization, and already several substantial gossans along an exhalite horizon have yielded encouraging assay values for gold and base metals.

8) Beijing Donia Resources Co

Donia and its affiliate Zhong Chang Mining Co Ltd (also from China) hold multiple licenses, including four for iron ore and three for base metals. Exploration work has included geological mapping, geochemical sampling, trenching, and a magnetic survey. Investigation for iron ore, however, produced poor results, and, after a thorough review of all projects by a new management team, the company decided to relinquish those licenses. The precious- and base-metal prospects have been retained and further exploration is committed.

9) China Africa Huakan Investment Co and Land Energy Group (China) Ltd

Both companies are newly arrived from China and were granted exploration licenses in late 2009.

Huakan holds ground at a locality known as Seroa, northwest of Keren (capital of the Anseba region), historically known for its gold occurrences.

Land Energy, on the other hand, has been issued with an exploration license on a highly prospective area west of Barentu, the capital of the Gash Barka region. The area is contiguous with, and to the east of, Andiamo’s exploration license. The town of Gogne is situated at the center of the license.

Both companies have focused on collecting stream sediment and soil samples from the entire license area. The samples were sent to China for laboratory analysis. Both companies have also applied for more ground in Eritrea. Land Energy has shown interest in potash mineralization alongside South Boulder’s area, and Huakan is looking for two more precious- and base-metal prospects.

10) Eritrea-China Exploration and Mining Share Co (ECEM)

ECEM is a joint venture between a Chinese company and the Eritrean ENAMCO. The principal property of ECEM is the Augaro exploration license, which covers 1,000 km2. The license area is named after the Augaro deposit, recognized as the biggest gold mine during the Italian colonial period.

Previously, the license was briefly held by Anmercosa, the exploration wing of Anglo American plc, and then by Nevsun Resources before it was abandoned. ECEM has conducted detailed geological mapping and drilling in the Augaro exploration license area. Unfortunately, no promising results have been produced and ECEM has opted to bring in Sahar Minerals from Bermuda as a joint-venture partner to take over the exploration of the license area.

11) Eritrea-Libya Mining Share Co (ERILIB)

Eritrea-Libya Mining (Erilib) is a special joint-venture arrangement between Eritrean and Libyan companies formed early in 2009 and issued with two exploration licenses in June 2009. The Nefasit exploration license covers 1,636 km2 and lies east of Asmara at the top of the escarpment. The Fanco-Guluj license is in the west of the country and covers 1,151 km2.

On both properties, Erilib has identified multiple targets based on previous works and extensive regional investigations consisting of geological mapping, geochemical sampling, and geophysical surveys. Follow-up work continues and target areas for drilling are being identified.

12) London Africa Ltd

This is a London-based private company and was granted a prospecting licensee in June last year known as AK1-11. The area covered by this license is 1,555 km2 and lies in the Anseba and Gash Barka regions.

During the one-year prospecting period, London Africa was able to identify multiple targets that warrant further exploration. According to the law, the license has been converted to an exploration one, which will permit London Africa to assess the property, initially for three more years until renewal.

13) Nubian Resources plc/Gippsland Ltd

Recognized as Gippsland by the ministry, the company holds prospecting licenses at the Adobha valley in northern Eritrea. Interesting results from two fast reconnaissance sampling programs, the first one of which was aided by a helicopter, have led the company to generate target areas for further investigations.

The rock types found in the project area are consistent with those expected in a volcanogenic massive sulphide (VMS) environment and are similar to the geological setting of the large Bisha Cu-Pb-ZnAu-Ag deposit 200km along strike to the south. The presence of widespread copper mineralization, combined with some high lead values in bedrock samples, significantly upgrades the prospectivity of Gippsland’s Adobha tenements.

Accordingly, Gippsland applied to convert them to an Exploration Licence and has formally requested more prospecting ground.

These applications have been processed and approved.

14) Sahar Minerals Ltd

Sahar is a Bermuda-based privately held exploration company established in early 2009. After an extensive evaluation process, the company secured two properties in Eritrea in February 2010, namely the Augaro gold-base metal project (held in a JV structure) and the Harab Suit gold-base metal project, which is 100% held in an exploration license area.

Exploration programs have begun on both projects subsequent to the license agreement. The management is looking forward to fast-track drilling on both properties.

15) South Boulder Mines Ltd

South Boulder is an Australian exploration company looking for a potash in the Danakil depression near the border with Ethiopia. The depression and its surroundings are believed to host several evaporate-hosted mineralization types. After the necessary preparatory works, such as upgrading of road and other infrastructure, and establishment of a camp, the company started a drilling program in late June.

This is a significant milestone for South Boulder and represents the first drilling program undertaken on the prospect in 42 years.

16) Thani Eritrea Ltd

Thani Eritrea is a new partner in the exploration ventures of Eritrea, coming from the Emirates and South Africa (through Anglogold Ashanti’s interest in the joint-venture agreement).

It holds 1,863 km2  of exploration ground in two localities, namely Kerkasha in Gash Barka (immediately south of Barentu) and Akordat North in the Anseba region (sandwiched between London Africa and Sanu). Exploration on the ground has not yet started but the company is planning to run airborne geophysics over the entire area.