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Segele gold project, Ethiopia – update

Gold ore from the Segele project

Photo by Akobo Minerals

10th May 2024

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Segele gold project.

Location
Ethiopia.

Project Owner/s
Scandinavian gold exploration and mining company Akobo Minerals.

Project Description
A scoping study has confirmed the potential economics of the project.

Akobo Minerals is planning to mine the gold mineralisation using methods such as shrinkage stoping. Ore will be brought to surface using an incline shaft.

At peak production, almost 6 000 t a month of rock will be mined and this material will be fed into an industry-standard crushing and gravity circuit, with cyanidation where necessary.

The mine life is estimated at 27 months.

The company plans to buy a plant capable of processing 20 t/h, but will initially operate it at 10 t/h. The mine plant will be a turnkey solution comprising a grinder, concentrator and cyanide leach containers.

Akobo will manage the processing plant, but will appoint a mining contractor to do the mining.

The plant is expected to extract 90% of all gold in the mineralisation; this will be confirmed by ongoing metallurgical testwork.

Potential Job Creation
None stated.

Net Present Value/Internal Rate of Return
None stated.

Capital Expenditure
Total capital expenditure for establishing the mine plant is estimated at $8-million.

Planned Start/End Date
Production startup has been delayed to July or August 2024.

Latest Developments
Akobo Minerals is making progress in resolving the recent challenges of nationwide fuel-supply disruptions and new customs procedures, enabling full site activity at its Segele mine. 

Production startup is, however, still uncertain.

The challenges have significantly impacted on the company’s operations in recent months, the company reported on May 2. Contingency plans were made, but the rapidly evolving situation proved more challenging than anticipated. With government support, however, these issues have been resolved for now.

The commissioning of the main plant has started in some areas, with plans being made for Universal Power’s arrival to commission the generators. The remaining electrical cables are ready for connection, with progress being made on finalising diesel infrastructure and the tailings storage facility membrane.

Efforts continue to finalise the processing plant and access to the orebody.

The arrival of critical mining equipment after a prolonged customs delay will allow for full ramp-up of mining activities. To minimise the cash burn rate in the delay period, the company has actively reduced site activity.

As production increases and positive cash flow is achieved, Akobo has said it will refocus on exploration to maximise project value.

The company has also informed on the strategic initiatives started to evaluate ways of increasing efficiency in production and further reducing operational risk, in addition to strengthening local management capacity.

Debt obligations, with regard to the gold bond financing, have been restructured with gold company Monetary Metals. All former convertible debt has been converted to equity, with only long-term debt to Monetary Metals remaining.

Funding has been secured and strategic discussions and evaluations are under way with key industry players to mitigate risks and improve production efficiency to capture the significant short-term potential outlined in the updated mine plan.

A fuel supply agreement has been signed with the Ethiopian National Oil Company for direct sourcing and improved reliability; Akobo is awaiting the final licence from the Ethiopian Petroleum and Energy Authority.

Collaboration with Leeder Industrial and Airland Logistics is said to build supply chain resilience. 

Key Contracts, Suppliers and Consultants
Peacocke and Simpson (metallurgical testwork); IW Mining (mining contractor) and Solo Resources (processing plant).

Contact Details for Project Information
Akobo Minerals, tel +47 92 80 40 14 or email info@akobominerals.com.

Edited by Creamer Media Reporter

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