“Acacia Mining plans to showcase its progress so far on the West Kenya Project and demonstrate that there is no substitute for systematic grassroots exploration, technical understanding and lateral thinking in order to deliver exploration success”
1) Let’s start with some background on Acacia Mining as a company. There is a proud tradition and history here.
Acacia Mining is a UK public company with its headquarters in London. We are listed on the Main Market of the London Stock Exchange under the symbol ACA and have a secondary listing on the Dar es Salaam Stock Exchange in Tanzania.
We have been operating in Tanzania for over a decade and during that time have produced over 8 million ounces of gold from our combination of open pit and underground mines, making us the leading gold producer in Tanzania and one of the largest producers in Africa.
We have three producing mines, all located in north-west Tanzania, together with several exploration projects at various stages of development, including exploration land holdings in the highly prospective greenstone belts in Western Kenya, Burkina Faso and Mali.
2) What has been a highlight in terms of projects for the company thus far?
As the majority of Acacia’s history has been in Tanzania we are clearly very proud of the turnaround of the three mines that we operate. Over the last three years we have launched a new strategy which involved re-engineering each of the mines to ensure they generate positive cash flows. This turnaround is now largely complete. As part of this revised strategy we also made the decision to move beyond just Tanzania and our first step was to start to explore in Kenya. This was a logical first step due to the proximity to our existing operations, similar geology and we already run some of our supply chain through the country. In the time we have been in Kenya we have made real progress in unlocking the potential of our projects and are excited by what the future may bring.
3) Which projects that you are involved in are you most excited about at the moment?
We are excited by the potential of the Liranda Corridor, which sits within our West Kenya Project near Kakamega. Prior to us being involved in the project, there had been some positive exploration results near surface at one of the prospects, Bushiangala, but as a result of our systematic approach to exploration, we have identified a further five targets within the corridor. One of these, the Acacia prospect has progressed well and continues to show high grade mineralisation in drill holes. Once we had identified this, we decided to drill deep holes early on to see if the systems mirrored well known systems in the Eastern Goldfields of Western Australia and the deeper drilling proved to be a success. We have now identified three shoots of mineralisation, and we are targeting drilling to determine if each shoot is approximately 400m along strike and extending down to 500-700m, with further depth potential. Our ambition is to declare an initial inferred resource on the project in early 2017 as we move the project forward. If we are successful in identifying enough resources we would be looking at this project being an underground operation mining multiple gold zones and processing at a central facility.
4) How promising is the mining industry in Kenya? What is your vision?
The mining industry in Kenya is currently small and it will take time to grow, but given the right conditions to do so there is good potential for this. We would like to be a significant part of that growth and we hope to be able to do this through successful exploration at our project which ultimately could lead to the construction of Kenya’s first large scale gold mine in the years to come. Little is known about the resource potential of Kenya due to the lack of historical exploration by junior companies in the past 20 years, when countries like Tanzania, Mali, Burkina and Ghana were attracting international investment. So, Kenya has some catching up to do, and in order to attract investors, both local and international, into Kenya for the exploration of minerals it is essential that the right policy and regulations are in place so that investors understand the playing field. Kenya has made a lot of changes in recent times with a new Mining Act and new Mining Regulations being debated. It is critical that the government and industry players work together to set up stable and transparent mining and fiscal systems that attract and retain high risk investment into exploration for minerals in order to make new discoveries and build new mines.
5) What in your view are the main challenges?
As the mining industry in the country is still young in Kenya there are two main challenges, regulation and then access to employees with experience in mining in the country.
With respect to regulation, the new Mining Act is a good start, but there still needs to be work to ensure that if we were to progress towards building a mine, the regulatory environment for likes of permitting, tax, royalties and employment is stable and practical to ensure that all of our stakeholders benefit from the investments.
Assuming regulation is acceptable, as Kenya doesn’t have a commercial gold mining industry to date there isn’t a large pool of experienced mining professionals in the country as there would be in countries with long histories of mining, like South Africa or Ghana, and so we would have to work hard to ensure that we find the right people in Kenya and train them up over time to ensure that our operations would be successful and run ultimately by Kenyans.
6) How important is the updated Mining Act in your opinion?
The new Mining Act is critically important as it provides a basis for Acacia to continue to invest in the country. Without stable regulation and taxation it is nearly impossible for companies to be able to commit the scale of capital required in order to build a mine and to get a return on their investment for their shareholders.
Additionally, there is still work to done on current regulations being proposed and there are issues within the new Mining Act that need to be clarified such as – Local Equity Participation, royalty structures, stabilisation agreements and what constitutes a strategic deposit. The uncertainty around issues like these reduces the appeal of Kenya for potential mining investors and make current investors nervous.
7) What will be your message at Kenya Mining Forum?
At the Forum we plan to showcase our progress so far on our West Kenya Project and demonstrate that there is no substitute for systematic grassroots exploration, technical understanding and lateral thinking in order to deliver exploration success. We will also highlight the need for the stable and commercial regulatory frameworks within Kenya to enable projects to move from exploration through to development and ultimately to production and create a successful and sustainable mining industry in the country.
8) What are you most looking forward to at the event?
Spending time with the other delegates, Ministers and Government officials to further build our relationships in the country as we look to progress our projects and increase our presence in the country. Sharing experiences with Kenyan other delegates of successful and not so successful projects and learning from the Ministers and Government officials and other players (community and environment) what the expectations are.