Scandinavian gold exploration and boutique mining company Akobo Minerals has announced an updated mineral resource estimate (MRE) for its Segele project, in Ethiopia, showing a significant increase of 31% in gold ounces.

The updated MRE put the average grade at 40.6 g/t for indicated mineral resources.

The findings, which were issued by the Australasian arm of mining and exploration consulting firm SRK, signalled improved potential for high-margin gold production, the company reported on April 22.

In March Akobo said initial production at Segele was expected to start by the end of the year, ramping up into 2023. Once fully operational, Akobo estimated the yearly production at Segele to be about 45 000 oz.

The company said this could increase depending on further discoveries and upgrades to the processing plant. The long-term goal was for the discovery of between 1.5-million and 2-million ounces of gold.

Akobo said on April 22 that the newly announced increase in ounces was derived from an increase in the tonnage and better-than-expected average gold grade than previously indicated.

“The indications were that we would see a drop in average gold grade. However, after improvements to the estimation method and after the application of a higher cut-off grade to match the planned underground mining methodologies, the average grade shows a more similar average grade as seen in the previous resource estimate from April 2021,” the company said.

In addition to the increase in the mineral resources, the classification of parts of the mineralisation was upgraded from inferred to indicated, thereby increasing confidence in the figures.

Akobo believes the average grade of 40.6 g/t for indicated mineral resources will have a positive impact on the cash flow potential for the mine operations because this part of the resource was assumed to be accessible in the early stages of mining operations.