Mupane Gold taps into adjacent resources

Staff Writer | Thursday January 26, 2012 00:00

 

According to a public notice issued on Monday, Mupane will soon receive ore from Jim's Luck, a gold-bearing mineral resource area located near Matsiloje.

The development follows Galane Gold's acquisition of both Mupane Mine and the separate but adjacent Northern Lights Exploration Company (NLE) last August.

With Jim's Luck being part of NLE's portfolio, the latest development underlines Galane's ability to successfully pool small and separate gold resources dotted around its holdings to support Mupane Mine's production.

According to the notice, Galane is currently driving an Environmental and Social Impact Assessment (ESIA) study required as part of the application for a mining licence. The study will involve public consultation with villagers from Matsiloje, Matshelagabedi and Motopi. The Canadian firm plans to construct open pit mine operations at Jim's Luck from where ore will be transported to Mupane Mine for treatment.

While the levels of gold resources at Jim's Luck are unclear, it is expected that the new mine will not significantly add to the four other mining lease areas that contribute ore to Mupane.

According to available documents, Jim's Luck is part of five gold projects located within a 190-square kilometre prospecting licence formerly owned by the Northern Lights Exploration Company. Documents describe Jim's Luck as a resource made up of two parallel mineral formations, with one well explored and the other requiring attention.

The other projects, which include Rainbow, Motopi, Tekwane Ni/Pt Project and the Tekwane Gold Project are similarly small in nature, although exploration continues on all of them.

Under Botswana laws, the Canadian firm has until October 2013 to successfully estimate gold resources at each of the projects after which renewal of the prospecting licence will require relinquishment of 50 percent of the ground held.

Galane hopes to bring together resources from all these projects towards boosting ore production and capacity utilisation at Mupane, enabling the company to leverage on the continuing strength of gold prices.

Galane acquired NLE last August for 400,000 Canadian dollars (P2.9 million) as well as the issuance of 3.125 million shares while a further settlement of 8.75 million shares was made dependent on the attainment of several conditions.

The acquisition was done simultaneously with the takeover of Mupane Gold from IAMGOLD.Mupane pumped out an average of 85,000 ounces of gold annually between 2005 and 2008 before dropping to 51,000 and 57,000 ounces in 2009 and 2010 respectively due to declining resources. The mine is generally expected to decommission by 2015, the date by which extraction of its depleted resources will no longer be economically viable.