Acacia Mining, a UK company that has been exploring Kakamega gold, said it has kick-started a survey to determine the commercial viability of the deposits estimated at 1.1 million ounces gold.
The announcement could be an indication that Acacia Mining could soon be joining Goldplat which mines gold in Migori.
“The updated inferred resource estimate completed for the year-end returned … 1.044 million ounces at Isulu and for Bushiangala 126,600 ounces,” Acacia said of its Kakamega sites in a trading update. “A technical study to determine mineability of these deposits was commenced in Q4 2017.”
The 1.1 million ounces of recoverable deposits could be worth Sh146.5 billion according to today’s price of Sh133,262.37 per ounce.
The survey comes after the firm spent $12.2 million exploring western Kenya in the year ended December. The previous year, the firm spent $10.5 million exploring the region.
Gold Exports From Kenya
Increased production of gold could diversify Kenya’s exports, which will, in turn, be used to fund the expenditure. Exporting gold could also strengthen the shilling against the dollar.
However, gold exports have been slow so far. Kilimapesa Gold, Goldplat’s subsidiary, sold gold worth Sh374 million in the half-year ended December 2018. Kilimapesa’s output increased 2.2 times from 1,190 ounces in 2016 to 2,681 ounces last year. Additionally, the firm’s gold sales increased 2.4 times from 1,093 ounces to 2,720 ounces to hit Sh374 million.
The royalty rate paid to the government is unknown. However, miners of other commodities have been paying royalties in the low single digits.