In the media

Looking for Sahara’s gold

Brendan Ryan [miningmx.com]

14 March 2008

MAURITANIA is not a name that springs swiftly to mind as a mining destination and that, according to mining entrepreneur Loucas Pouroulis, is one of the reasons he’s investing there.

“I could have gone into Tanzania looking for gold but everybody is in there already. Mauritania is unknown. It’s a country that’s just opening up – and that excites me. Despite what you may read in the papers, it’s very safe and the people are very friendly,” he told Miningmx.

Currently, Mauritania isn’t getting a good press. Four French tourists were murdered just before Christmas in the south of the country, while international concerns are rising about a possible growing al-Qaeda presence there.

The Paris to Dakar Rally was cancelled this year due to threats to the safety of drivers/motorcyclists, who would have spent several days racing through remote regions of the country, whose geography is dominated by the Sahara Desert. Various Western governments have issued travel warnings to their citizens advising caution when visiting Mauritania.

An admittedly brief visit to Mauritania backed up Pouroulis’s comments about the hospitality of its people. I felt completely safe wandering through a crowded fish market and fishing port on the beach at the capital Nouakchott. The main problem was to avoid getting caught up in the numerous soccer games under way on the beach.

Though obviously a very poor country, yet there were no beggars hassling you except for a couple hanging around the airport. However, the standard of driving is another story. The golden rule of the road appears to be that there are no rules.

Rumour – denied vehemently by my guide – is that you don’t have to have a driving licence. Mere possession of a vehicle is apparently sufficient to allow you on to the roads. The only irritation I experienced were the numerous roadblocks set up by both the police and army, although my guide was able to negotiate his way swiftly through all of them.

Pouroulis has formed exploration company TransAfrika Resources – due to list on the JSE in June – to look for gold in three countries: the Democratic Republic of Congo (DRC), Rwanda and Mauritania.

The gold potential of the DRC is well known and attracting increasing attention. However, Rwanda is relatively unexplored in terms of gold – and Mauritania more so.

One of the key indicators that geologists look for in the early stages of an exploration programme is the presence of “artisanal” mining – either in progress or evidence of sites where it’s taken place in the past. Artisanal mining involves small-scale exploitation of surface and shallow deposits by groups of workers. There are artisanal workings on TransAfrika’s holdings in the DRC and Rwanda but none in Mauritania.

TransAfrika is one of three exploration and resources companies that Pouroulis has founded in the wake of his success developing the Eland Platinum mine near Brits in North West Province, which he sold to Xstrata last year for R7.5bn.

The other two are Keaton Energy – it controls various coal projects in South Africa –and Tharisa Resources, which is about to develop a platinum and chrome mine near Rustenburg. Tharisa is also looking to build a 600,000 t/year ferrochrome smelter, but that’s dependent on the availability of power from Eskom.

Mauritania’s economy is dominated by the export of iron ore, which is mined in the north of the country by state-controlled SNIM, although junior mining companies such as Australian-listed Sphere Investments are now starting to move in.

First Quantum Minerals – listed on the Toronto and London stock exchanges – has also developed the Guelb Moghrein mine, which was forecast to produce 30,000 t of copper in concentrate and 65,000 oz of gold in 2007.

Pouroulis first approached the Mauritanian government early in 2007. What attracted him was the largely unexplored mineral potential and the fact that Mauritania had “a clear mineral rights law”. Over the past year TransAfrika carried out studies using satellite imagery to determine where it wanted to apply for exploration permits. It now holds permits covering 30 000sq km of ground, where it will search for gold, copper, iron ore and uranium.

TransAfrika’s geologists started field work at the beginning of February. The main problem they have reported is the length of time taken getting to the sites; in part due to the terrain but mainly because of the hospitality of the local villagers.

Says Pouroulis: “TransAfrika is a gold exploration company but we had to take the permits for the other commodities as well to get what we wanted. Should we find a viable uranium or iron ore project, it will be separated from TransAfrika and placed in another vehicle. TransAfrika shareholders will be compensated.”

TransAfrika is currently raising up to US$69m through the issue of shares at US$1/share to private investors. It intends raising a further $30m linked to the listing of the company on the JSE. Pouroulis says that will be enough to fund the first three to four years of exploration and evaluation work.

In reply to the question: “Why are you doing this after the killing you made with Eland Platinum?” Pouroulis replied: “I don’t need the money. I’m doing this because I love creating something out of nothing, which is what will happen in Mauritania if we find and develop a mine. It’s a pleasure for me to operate in a country like this.”

* Ryan visited Mauritania courtesy of TransAfrika Resources.