MINING IN AFRICA SPECIAL — Sadiola Hill gold project gets

The gold potential of Mali is attracting widespread interest now that Anglo American of South Africa and a Canadian partner plan to proceed with the US$250-million Sadiola Hill mine project in the landlocked West African nation.

Throughput is projected at 4 million tonnes per year, and construction is expected to start shortly.

Initial production from the oxidized deposit is scheduled to begin toward the end of 1996, and will peak at an annual rate of 350,000 oz. About 400 people will be employed by the mine at full production.

The open-pit operation is expected to produce more than 3.2 million oz. gold during a lifespan of 13 years. Production costs are expected to be low as a result of the low waste-to-ore ratio and favorable metallurgy. The project is adjacent to the village of Sadiola, which is 79 km south of Kayes (the regional capital, situated in Western Mali) and close to the Senegalese border.

Anglo American is operating the project and has also been responsible for arranging financing. The project is held by a Malian company in which Anglo American has a 38% interest. International African Mining Gold (IAMGOLD), a Canadian junior which is seeking a listing on the Toronto Stock Exchange, also holds 38%.

(It should be noted that legal action has been initiated against IAMGOLD by CDN-listed Kinbauri Gold. Kinbauri, which alleges that IAMGOLD unilaterally terminated an agreement to amalgamate, is seeking damages of $10 million.) The deposit is also held 18% by the Malian government, with the remaining 6% owned by the International Finance Corporation (IFC), a division of the World Bank.

The deposit lies within the Kenieba-Kedougou inlier of Birimian rocks which straddle the border between Mali and Senegal. The gold occurs as finely disseminated mineralization hosted in highly altered and weathered meta-sediments of decarbonated marble, silicified metapelties, basic-to-intermediate intrusives and calcite marbles. The estimated grade of the oxide ore is in the region of 2.47 grams gold per tonne. Sadiola Hill will be the third “non-traditional” mine built in Mali. The Russians operated an underground mine in the country in the mid-1980s through to 1991. The second was Syama, an open-pit operation which started in 1990. BHP Minerals operates (and is majority owner of) this mine, which produced 94,481 oz. gold during 1994. A recent US$88.6-million expansion program is expected to increase annual output to 196,000 oz. Minority interests in Syama are held by the Mali government and IFC.

Several North American-based companies — both juniors and majors — are also interested in Mali’s gold potential. TSE-listed Barrick Gold is said to be among them.

Vancouver-based junior Oliver Gold (VSE) has joined South African-based Consolidated Mining to explore the Segala gold prospect, about 15 km north of the village of Kenieba.

Assay results from last year’s drilling returned encouraging results, including 38.7 metres of 2.54 grams, 55 metres of 1.89 grams and 33.67 metres of 4.72 grams.

“We were pleasantly surprised by the magnitude of the mineralization,” says Oliver director Ronald Netolitzky, who noted that competition for projects has increased in the country, particularly from majors. “This interest is also spreading into (neighboring) Senegal.”

Oliver and its partner are planning a major drilling and exploration program for 1995.

Toronto-based Jonpol Explorations (TSE) is also active in the country. Recent work has identified two areas of anomalous gold mineralization that will be tested by reverse-circulation drilling.

Mali is also considered prospective for the discovery of kimberlites, although gold remains the most important target of explorationists. Most of this work is focused on the Birimian Formation, which hosts gold mineralization in a variety of settings. Historic production was primarily from alluvial deposits.

Eluvial deposits also occur, and were formed as a result of the chemical breakdown of the bedrock by a process of laterization and weathering under tropical conditions. In most cases, the eluvial deposits are under a hard, lateritic crust (or “cuirasse,” as it is known locally).

Most of the important primary gold deposits in Mali are overlain by eluvial deposits; examples include the saprolite overlying the Sadiola deposit, and the oxide ore being mined by BHP at Syama.

Primary gold mineralization occurs in shear zones, isolated quartz veins or intrusive host rocks as swarms of quartz veins and veinlets forming a stockwork. Primary stratabound mineralization also occurs in the Birimian Formation, associated with slightly metamorphosed sandstone rich in tourmaline, which contains sulphides (mainly pyrite) as well as gold.