Africa’s Third Largest Source for Gold Exploration

The West-African nation of Mali is as mineral-rich as it is unexplored, with a wealth of gold resources beneath its surface only just being discovered.

The third-largest gold producer in Africa, Mali has seven projects currently in operation, and there is plenty of room for growth as only six of the country’s 133 potentially gold-rich regions have been mapped out to date.

In 2017, the World Bank described Mali’s economic performance as being “strong, with robust growth and, more recently, [showing] an apparent drop in poverty rates overall.” Crediting the agriculture and services sectors, Mali experienced an estimated growth rate of nearly six percent in 2016. Growth is expected to stay at a robust five percent over the medium term, with added support from the resource sector.

Transforming Mali into a premier destination for foreign investment has been a top priority for legislators. In an interview with Mining Technology, Bady Baldé, the regional director for Francophone Africa at EITI, called Mali’s emphasis on attracting foreign investment a strong foundation on which to build on. He emphasized that the world had taken notice of Mali’s commitment towards transparency and its favorability toward mining companies.

Mining in Mali: A brief history

Gold’s importance to Mali has always been paramount. In the 8th century, both the nation’s gold and salt mines were highly sought-after by Europeans and the Arab world. Rudimentary extraction of the region’s gold stores also gave rise to the Mali Empire between 1230 and 1600, although these were depleted before Mali was subjected to colonial rule in the 19th century.

Now, as exploration companies return to the region, BMI Research has reported that Mali is set to experience some of the fastest mining industry value growth rates within Sub-Saharan Africa. This is as a result of its large, untapped resources, sizable investment and a climate which is increasingly business-friendly.

A mining-friendly state

The Canadian Global Affairs Institute wrote in 2013 that Mali’s attractive mining codes, low royalty rates and tax holidays were constructed to “stimulate investment” in mining across Africa in the early 1990s, while western nations Mali and Burkina Faso, along with Tanzania in the east, led the charge in courting foreign investment for its resource sector.

A rework of the country’s mining code aimed at reducing extensive regulation is expected in 2018. Although details about the exact nature of the revisions remain unclear, Mali’s Economic Minister, Boubou Cisse said in early 2018 that his government would act unilaterally to enact revisions if a bipartisan agreement could not be reached.

New mining permits have been made available in recent years through an effort to subvert illegal mining in-country. As part of its work to attract foreign investors, Mali’s government has recently cancelled approximately 30 percent of existing mining permits, freeing these up for new and above-board investors, domestic and foreign, to pursue mining operations.

Available resources

The nation’s resource industry is an area of significant economic activity. Total gold production in Mali totaled 46.9 tonnes in 2016 with additional production estimates for 2017 ranging as high as 95 tonnes. Additionally, estimated reserves from the Ministry of Mines for 2017 sat at 822 tonnes of gold.

Mali’s wealth of resources extend beyond gold, however. Found in the same region which contained enough gold to fuel the rise of the Mali Empire, Mali’s south-west contains an estimated 122 million tons of lime. In addition, there are also iron deposits in the west near the country’s borders with Senegal and Guinea, lithium near the region of Kayes and manganese around the town of Ansongo, highlighting the diversity of Mali’s resources.

Potential in the SMFZ

Located in western Mali, the Senegal Mali Fault Zone (SMFZ) is a structural event known for its rich history of gold exploration and production and hosts some of the biggest gold mines in the world. “Part of the reason that the SMFZ is such a prolific producer because it is a larger structure than most,” said Desert Gold (TSXV:DAU, OTC:DAUGF, FKFT:QXR2.F) President Jared Scharf, adding that the structure’s lineage can most likely be traced back to the same time most of the gold belts in west Africa were formed.

The SMFZ has helped catapult Mali into becoming the third largest gold producer in Africa, with approximate total revenue from the region amounting to US$1.2 billion in 2015. Within the SMFZ, the Sadiola and Loulo gold districts “contain some of the largest gold endowments in west Africa outside of the Ashanti belt in Ghana,” according to a 2017 paper by Lebrun et al.

The SMFZ hosts a number of substantial gold discoveries. Comprised of two seperate mining permits, Randgold Resources’ (NASDAQ:GOLD, LSE:RRS) Loulo-Gounkoto complex borders Senegal and was reported to hold total gold reserves of 8.2 million ounces gold in 2017. 500 kilometers northwest of Mali’s capital, Bamako, the Loulo-Gounkoto complex increased its annual production rate by 3 percent over the previous year, having produced 730,372 ounces of gold in 2017. Randgold Resources attributes the increase to improved processing and recovery methods.

Located 140 kilometers to the south are Endeavour Mining’s (TSX:EDV) Tabakoto and Segala mines. Once Endeavour Mining acquired the Tabakoto mine in 2012, the Segala open pit mine was converted into an underground operation. Both mines collectively produced nearly 144,000 ounces of gold in 2017. They also have proven and probable reserves of 1.2 million ounces of gold and inferred resources of 810,000 ounces gold.

Further emphasizing the SMFZ’s exploration potential, IAMGOLD’s (TSX:IMG) and AngloGold Ashanti’s (NYSE:AU) Sadiola and Yatela Mines have reported reserves of 8.1 million and 3.5 million ounces of gold respectively.

Touting three properties on the SMFZ, Desert Gold holds the Segala Ouest and Farabantourou projects, as well as the Djimbala project. Segala Ouest and Farabantourou sit 300 kilometers from Bamako and will soon benefit from incoming infrastructure, namely a new highway connecting them to the capital city. Desert Gold’s Farabantourou and Segala Ouest projects are also well-situated for potential gold discovery. Both projects are found in the Kenieba inlier, a north-northwest trending granite-greenstone belt made up of Birimian volcano-sedimentary formations.

Djimbala is located 220 kilometers from Bamako already has access to hydro-electric power from a nearby dam and water by way of the Niger and Sankarani rivers. The Djimbala project’s underlying geology also forms part of what is known as the Yanfolila Greenstone Belt, a structure consisting of felsic to mafic volcanic rocks and sedimentary rocks essential to the formation of gold deposits.

Due to the projects’ proximity to significant gold-producing operations, Scharf said that he believes “there exists a high probability of new multi-million-ounce discoveries in this region and Desert Gold’s exploration portfolio has a reasonable chance of making such a discovery.”

Takeaway

Concerted exploration is ongoing in the search for Mali’s largely-untapped gold resources. The nation is experiencing robust economic growth, in part from foreign interest in their resource sector, and has demonstrated their interest in attracting further investment with mining-friendly policies. Mali is set to capitalize on its potential for significant gold deposits in the near future.

This article was written according to INN editorial standards to educate investors.