Haiti hopes gold ore find will spur mining boom

May 12, 2012

Business, International

Haiti hopes gold ore find will spur mining boom
 
 
Martha Mendoza
Associated Press
 
Haiti’s capital is blighted with earthquake rubble. Its countryside is shorn of trees, chopped down for fuel. And yet, Haiti’s land may hold the key to relieving centuries of poverty, disaster and disease: There is gold hidden in its hills — and silver and copper, too. A flurry of exploratory drilling in the past year has found precious metals worth potentially $20 billion deep below the tropical ridges in the country’s northeastern mountains. Now, a mining company is drilling around the clock to determine how to get those metals out.
 
In neighboring Dominican Republic, workers are poised to start mining the other side of this seam later this year in one of the world’s largest gold deposits: 23 million ounces worth about $40 billion.
 
The Haitian government’s annual budget is $1 billion, more than half provided by foreign assistance. The largest single source of foreign investment, $2 billion, came from Haitians working abroad last year. A windfall of locally produced wealth could pay for roads, schools, clean water and sewage systems for the nation’s 10 million people, most of whom live on as little as $1.25 a day.
 
“If the mining companies are honest and if Haiti has a good government, then here is a way for this country to move forward,” said Bureau of Mines Director Dieuseul Anglade.
 
In a parking lot outside Anglade’s marble-floored office, more than 100 families have been living in tents since the earthquake. “The gold in the mountains belongs to the people of Haiti,” he said, gesturing out his window. “And they need it.”
 
Haiti’s geological vulnerability is also its promise. Massive tectonic plates squeeze the island with horrifying consequences, but deep cracks between them form convenient veins for gold, silver and copper pushed up from the hot innards of the planet. Prospectors from California to Chile know earthquake faults often have, quite literally, a golden lining.
 
Until now, few Haitians have known about this buried treasure. Mining camps are unmarked, and the work is being done miles up dirt roads near remote villages, on the opposite side of the country from the capital. But U.S. and Canadian investors have spent more than $30 million in recent years on everything from exploratory drilling to camps for workers, new roads, offices and laboratory studies of samples. Actual mining could be under way in five years.
“When I first heard whispers of this I said, ‘Gold mines? There could be gold mines in Haiti?'” said Michel Lamarre, a Haitian engineer whose firm, SOMINE, is leading the exploration. “I truly believe this is our answer to taking care of ourselves instead of constantly living on donations.”
 
On a rugged, steep Haitian ridge far above the Atlantic, brilliant boulders coated with blue-green oxidized copper jut from the hills, while colorful pebbles litter the soil, strong indicators that precious metals lie below.
“Just look down,” said geologist John Watkins. “Where there’s smoke, there’s fire.”
 
Nearby, 8-year-old Whiskey Pierre and his barefoot buddies stared at a team of sweat-drenched men driving a narrow, shrieking diamond bit 900 feet into the ground.
 
“That is a drill!” shouted Whiskey, bouncing on his toes. “The man drill to get gold!”
 
The workers periodically pulled up samples and knocked them into boxes. The first 40 feet yielded loose rocks and gravel. About 160 feet down, cylinders of rock came back peppered with gold. At 1,000 feet down, rocks were heavily streaked with copper.
 
Geologists extrapolating from depth and strike reports estimate at least 1 million ounces of gold at two sites. In April, prospectors found the first significant silver ever reported in Haiti: between 20 million and 30 million ounces. And in the end, it may be copper that is the most lucrative: geologists suspect that more than 1 million tons lay in just one of many areas under exploration.
 
The prices of precious metals have been volatile in recent years, with copper selling for about $8,000 per ton, silver at $30 an ounce, and gold at $1,600 per ounce.
 
“Ultimately, I think mining is going to dwarf anything else in Haiti,” says Michael Fulp, an Albuquerque, N.M.-based geologist who visited the drill sites. “Usually you’ve got about a one-in-1,000 chance of making a mine from the exploratory stage, but those odds are much better in Haiti because of the lack of any previous modern-day exploration and very, very promising samples.”
 
Gold was last gathered in Haiti in the 1500s, after Christopher Columbus ran the Santa Maria onto a Haitian reef. Spaniards enslaved the Arawak Indians to dig for gold, killing them off with harsh conditions and infectious diseases. When the Spaniards learned of even more lucrative deposits in Mexico, they moved on.
 
In the 1970s, United Nations geologists documented significant pockets of gold and copper, but foreigners weren’t willing to risk their cash in a country where corruption and instability has long discouraged outside investment.
Ironically, it was only after the catastrophic 2010 earthquake that investors saw real opportunity. Fifteen days after a seismic jolt brought down much of Port-au- Prince, a Canadian exploration firm acquired all of the shares of the only Haitian firm holding full permits for a promising chunk of land in the northeast.
 
“Investors want to get in at the bottom,” said Dan Hachey, president of Majescor Resources, the Canadian company, “and I figured after that earthquake, Haiti was as low as it could get.”
 
Hachey was also betting that the $10 billion in foreign assistance promised for earthquake recovery would force change and accountability.
 
“The eyes of the world will not allow the government to fool around,” he said.
 
Three firms are considering mining in Haiti, but so far only SOMINE has full concessions to take the metals out of the mountains. Those permits, for 50 square kilometers (31 square miles), were negotiated in 1996 under President Rene Preval and require the firm to hire Haitians whenever possible.
 
In exchange for minimal permit fees, SOMINE committed to spend $2.25 million in the first two years. In addition, it will pay $1.8 million after a feasibility study, according to the contract.
 
Bottom line: Haitians should get $1 out of every $2 of profits, compared with about $1 out of $3 that most countries get from mining firms.
 
Discoveries of rich resources, whether diamonds, oil or gold, often prompt great economic booms but come with great risk of environmental, health and social problems. Chile, one of the wealthiest nations in Latin America, is the world’s largest copper exporter, deriving a third of its income from the metal. Peru, with one of the fastest growing economies in the world, has privatized most of its mines in recent years, and now gets about 20 percent of its total revenues from the industry.
 
Though the contractual terms are generous for Haiti, there is plenty to be cautious about. Haiti’s government is repeatedly rated as one of the most corrupt in the world. The mines would ostensibly be regulated by government officials responsible for enforcing environmental, mining and corporate laws, but at this point those officials don’t exist and there are neither plans nor budgets to hire them.
 
Further, open pit mines, common around the world, are crater-like holes made up of a series of massive terraced steps that drop thousands of feet into the ground. When the resources are exhausted, usually after about 25 years, the pits can be refilled or converted into reservoirs. In many cases, the mines leave serious problems — environmental contamination, displaced communities and mountaintops torn asunder.
 
From Papua New Guinea to the Philippines to Brazil, mining accidents have allowed tons of waste to be spilled into rivers and lakes, creating environmental disasters.
 
“In low-income countries, the dangers are substantial,” said UCLA political science professor Michael Ross. “The great irony of mineral wealth is that those countries that most desperately need infusions of mineral revenue — low-income countries with weak governments — are also least likely to manage these resources wisely, for the benefit of the country.
 
Already, the hundreds of jobs, the new roads and the community investment in a country where two out of three people have no formal employment is much appreciated.
 
Stone cutter Joseph Bernard, 47, says that before he got a job slicing rock samples, his family was going hungry. They had one cow. Their peanut and bean fields had gone to dust after months without rain.
 
Today, his wife has launched a business selling seeds, and his son and two daughters have started school.
“I found a job, but many didn’t,” he said, wiping a trickle of sweat from his deeply lined cheeks after a recent shift. “If more companies come, more people will work.”
 
In a sleepy exploration camp at sunset, Hachey and his competitor, Daven Mashburn of Newmont Mining Corp., met to talk business over bottles of Haiti’s Prestige beer, bumping fists in the low-germ “cholera handshake” that has replaced the traditional palm grip after last year’s deadly epidemic.
 
The men talked labor — Newmont got 10,000 applications for 100 jobs when one project started up last month. They talked logistics — core samples are sliced in half, bagged, and flown to Santiago, Chile, where it takes 21 days to find out how much gold, silver or copper they contain. They talked hurricanes, cholera, political unrest and, yes, the earthquake — Mashburn spent four hours buried under piles of rock in Port-au- Prince, eventually pulled out with fractures from head to toe.
 
But mostly they talked about gold.
 
“Of all the places we work in the world,” said Mashburn, whose company has operations in eight countries on five continents, “it would be really most satisfying to have success here. Haiti has great mineral wealth, and they surely could use it.”
 _____________________________________________________
 
Gold in Haiti
 
 
Children watch workers drill for gold, copper and silver in Trou Du Nord, Haiti, on April 10, 2012
 
 
_____________________________________________________
 

Has gold made Ghana wealthy or has it made the United Kingdom wealthier?
 
In 2010 it was reported that African countries typically collect between 30% and 35% in corporate taxes from the mining industry. Ghana only collects 25% of the mining corporations’ profits in corporate taxes. But, many corporations had manipulated their profits in Ghana so they appear lower than they really were, sometimes even making them so low that they are exempted from paying any corporation tax at all.
 
Ghana earned $1.5 billion through gold exports during the first quarter of 2012.
 
 
Ghana is Africa’s 2nd biggest producer of gold, and hosts more estimated reserves than such prolific gold producing nations as Peru and Papua New Guinea. The top producing nations of gold in the world are South Africa and the United States.
 
The Gold Coast Crown colony was formally named in 1874 by the British. The British desire to control the Gold Coast, now Ghana, was mainly motivated by the wish to control trade in gold. So much gold had been found in what is now Ghana. The British followed the Portuguese who were the first Europeans to visit the area and named it Costa d’Ouro or Gold Coast. The Portuguese, Dutch, British, French, Germans, Danes, and Swedes all built forts and castles along the coast of what is now Ghana.
 
The Ashanti/Asantes were known for their gold. The king of all Ashanti/Asante is the Asantehene is traditionally enthroned on the Golden Stool which was said to embody the spirit of the Ashanti/Asante nation.
On March 6, 1957, Ghana became the first sub-Saharan African nation to achieve independence from the United Kingdom.
 
Otumfuo Osei Tutu II, Asantehene
 
 
 
 
 
 _____________________________________________________
 
Ghana’s Mining and Exploration Opportunities
 
By Dave Brown
International Business Times
 
Mining and Exploration Opportunities
Ghana’s largest mine is Tarkwa, located in south-western Ghana, about 300 kilometers west of the capital city Accra, and operated by Gold Fields Ltd. (NYSE:GFI).
 
Gold Fields Ltd. project consists of 6 open pits, 2 heap leach facilities and a carbon-in-leach (CIL) plant. Tarkwa has a Mineral Resource of 15.3 million gold ounces and a Mineral Reserve of 9.9 million ounces. During the most recent fiscal year Tarkwa produced 720,700 ounces of gold and for the 12 months to end-June 2011 the expectation is to produce between 720,000 and 760,000 ounces of gold. Gold Fields also owns the Damang mine with a Mineral Resource of 4.7 million gold ounces and a Mineral Reserve of 2.1 million ounces.
 
Newmont Mining Corporation’s (TSE:NMC) (NYSE:NEM) Ahafo mine produced 531,470 ounces of gold in 2009, an increase from 524,000 a year earlier.  The mine is located approximately 300 kilometers northwest of Accra and currently consists of 3 open pits and has expansion potential with reserves contained across 17 pits.  With its origins as a greenfield operation beginning production in 2006 it produced its 1 millionth ounce in 2008.  The company also has an exploration stage project, Akyem, in the Brim North Eastern region of Ghana located 180 kilometers northwest of Accra.
AngloGold Ashanti ‘s (NYSE:AU) Obuasi operation produced 383,000 ounces last year. AngloGold Ashanti expects its Obuasi mine to produce around 400,000 ounces of gold per year by 2012.  The company also owns the Iduapriem mine, which produces an average 190,000 ounces of gold per year.
Bibiani gold mine, owned by Noble Mineral Resources (ASX:NMG), is located in western Ghana, 250 kilometres north-west of Accra. The open-pit mine, which was commissioned in 1998, is in the Sefwi-Bibiani belt, and contains more than 17 million ounces of gold. The Sefwi-Bibiani belt is considered to be the second most significant gold belt in Ghana after the Ashanti Belt to the east. Noble Resources plans a $9 million drilling program over the next three years.
 
Golden Star Resources (TSE:GSC) has two operating mines in Ghana and poured its 2 millionth ounce of gold from its Bogoso/Pretea and Wassa mines last year. The Bogoso/Pretea project, in which Golden Star has a 90 percent interest (The government of Ghana owns the remaining 10 percent), consists of approximately 85 kilometers of mining and exploration concessions along the Ashanti trend in south-west Ghana. Bogoso/Presteas’s forecast for 2010 is production of 200,000 ounces. The Wassa gold mine (also 90 percent owned by Golden Star), is located in the southwestern region of Ghana approximately 35 kilometers east of Bogoso/Prestea. Last year mining operations at Hwini-Butre commenced and provided even higher grade ore relative to the Wassa mill.
 
Keegan Resources (TSE:KGN) has two premier gold assets in Ghana. Keegan’s flagship property is the Esaase gold deposit. Updated resource calculations indicate a 2.025 million ounce indicated and 1.451 million ounce inferred resources  averaging 1.5 grams per tonne and 1.6 grams per tonne, respectively. The company reports that development studies are currently underway that will enable the project to be brought to production stage. Keegan is also exploring a second project, the Asumura gold property, located along one of Ghana’s largest and most productive gold structures.
 
Adamus Resources Limited (ASX:ADU) is focused on advancing the Nzema gold project  which consists of a contiguous block of tenements and options covering approximately 665 square kilometers. Adamus’ area hosts both the Salman and Anwia deposits.  The company reports that current project estimates indicate a minimum life of 10 years and average production potential of 100,000 ounces of gold per year.
 
Castle Minerals Limited (ASX:CDT) is a gold exploration company focused on 6 main projects and is the largest landholder among mineral explorers with over 12,000 square kilometers. It made 2 greenfield gold discoveries in 2008, Akoko and Julie West, and defined an initial gold resource in 2009. The Akoko Project consists of 2 granted prospecting licenses and is located 10 kilometers east of Adamus Resources’ Salman gold project. Each of the projects is considered prospective for gold mineralization except for Opon Mansi, which hosts an iron ore deposit. The Opon Mansi Project is located 260 kilometers west of Accra, centered about 40 kilometers north of Tarkwa.
 
Perseus Mining Limited (ASX:PRU) is engaged in gold exploration and development in Ghana with additional exposure to prospects in Cote d’Ivoire. The Central Ashanti Gold Project is located on the Ayanfuri and Nanankaw mining leases. Two 15-year mining leases covering a total area of 93 square kilometers were granted last December and more recently in June.  A definitive feasibility study suggests the company could be producing 450,000 ounces per year by 2013, costing an average cost of approximately $450 per ounce, with earliest first production beginning next fall.
____________________________________
 
 
 
Gold Fields Limited is a South African gold mining firm formed in 1998 with the amalgamation of the gold assets of Gold Fields of South Africa Limited and Gencor Limited. The company is headquartered in Johannesburg, South Africa.
Newmont Mining Corporation is headquartered in Denver, Colorado, USA
 
Golden Star Resources Ltd is a gold mining company, whose principal operating properties are located in Ghana, West Africa. The company is headquartered in Littleton, Colorado.
 
Keegan Resource Inc. corporate strategy is to acquire, discover and develop world class gold deposits in Ghana, West Africa in an efficient, cost effective and technically sound manner so as to provide maximum benefit to its shareholders. Keegan Resource Inc. is headquartered in Vancouver, British Columbia, Canada
 

Adamus Resources Limited, a subsidiary of Endeavour Mining Corporation with headquarters in George Town, Grand Cayman, British West Indies /United Kingdom

Castle Minerals Limited is an Australian gold exploration company with 6 project areas covering more than 12,000km² in Ghana West Africa. Castle Minerals is headquartered in Perth, Western Australia.

Perseus Mining Limited  is an Australian gold exploration company with its headquarters in Balcatta, Western Australia.

AngloGold Ashanti Limited is headquartered in Johannesburg, South Africa

The Ashanti Goldfields Corporation was the first African company to appear on Wall Street. In 2004, it merged with AngloGold to create the world’s second-largest gold producer, AngloGold Ashanti company. AngloGold was a gold mining company based in South Africa and majority-owned by the Anglo American group. Anglo American is a British multinational mining company headquartered in London, United Kingdom.

 

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