Spotlight Round-up

14th January 2022

 

 

Spotlight recently brought you a broad-brush overview of the mineral potential of Nigeria, and it now seems that some of the world’s biggest miners are sitting up and taking notice of this under-explored jurisdiction.  Olamilekan Adegbite, the Nigerian minister of mines and steel development, said at a conference in Riyadh this week that Barrick Gold had expressed interest in coming to Nigeria, and that the government had spoken with Rio Tinto about the possibility of it doing the same.  He also announced that the government planned to auction mining rights for copper, gold, lithium and limestone later in the year.  No doubt such behind-the-scenes talks happen frequently between cash-strapped governments and large corporations, and it doesn’t mean anything will necessarily come of them, but the mining giants could now enter Nigeria with an example of how to get the job done.

Minister of mines and steel development, Olamilekan Adegbite
Image via the Daily Nigerian

Mineral exploitation in Africa’s most populous nation was barely scraping 0.1% of GDP before the first commercial production of gold by Thor Explorations (TSXv & AIM:THX) at its Segilola project in October last year.  This was despite potentially significant reserves of gold, zinc, lead, gemstones and iron in the country, as well as the distinctive “coltan” deposit type containing niobium and tantalum.  These resources have been essentially ignored, except by artisanal miners, since the discovery of oil in the 1950s.  Oil could be extracted more easily and for generally greater profits than hard-rock resources, so recent investment in exploration and production in Nigeria has almost exclusively focussed on the black stuff, apart from some interest in equally polluting but industrially useful low-sulpher coal deposits.  The country’s political history also hasn’t helped with mining investment; the civil war of the 1960s chased out virtually all of the foreign mining experts, leaving nobody with the knowledge to identify and develop non-oil resources.

The oil industry in Nigeria is dirty in several senses.
Image via the Financial Times

There’s tremendous untapped potential in hard rock minerals in Nigeria, and, with sufficient guidance and oversight, it’s possible to imagine a scenario where the country could position itself as an ethical source of coltan, in contrast to some other African producers.  Of course, most notable of these is the DR Congo, where coltan is on the long list of conflict minerals extracted under brutal conditions.  Coltan deposits could be a huge economic benefit to a relatively poor country heading into the 21st century; both niobium and tantalum are crucial for modern necessities including an enormous variety of consumer and industrial electronics, as well as lenses and aviation alloys.

Coltan, a black ore mineral containing specialised but crucial metals niobium and tantalum.
Image via Klett.de

Led by Thor, the country’s gold resources could also be an important asset delivering private wealth and public funds.  It’s gold that has attracted the most attention so far, and gold that has finally induced a foreign company to stump up the cash to build a mine.  Thor’s Segilola mine lies in the Western Gold Province (WGP), a phenomenally under-explored region containing greenstone belts of the kind that are known to host major gold deposits around the world.  If the WGP can live up to even part of its apparent potential, that could be a major boon for a developing economy.

Casting the leaching tank at Thor's newly operational Segilola gold project.
Image via Thor Explorations

However, there are plenty of challenges in the way of these goals; nepotism, bureaucratic tangles, endemic corruption and inter-ethnic power struggles have characterised Nigerian politics for decades, and to one extent or another it has been these issues that have killed off mining ventures in the past.  Adding to these concerns, gold smuggling is a problem that costs the economy an alleged $9 billion per year, with most illicit gold ending up in Dubai: an underground trade route that I discussed here.  In addition to his comments mentioned above, Minister Adegbite said this week that the Nigerian government was in discussion with the UAE to combat this practice, and I wish them the best luck in the world with that, because they’ll need it.  More alarmingly, in September last year, deputy minister for mining development Uche Ogah called for the death penalty for gold smugglers.  While gold smuggling undoubtedly hurts African economies, that’s a ridiculous over-reaction that could make potential investors even more nervous about the human rights credentials of the government.

Recent years have, overall, been somewhat calmer in terms of ethnic and electoral violence in Nigeria, and there are certainly genuine efforts across all levels of government to combat corruption.  These are good preliminary signs, but if the market wants easy and ethical access to Nigerian minerals, there will have to be major improvements in all facets of governance in the country, and unfortunately the international support that will be required for that does not seem to be forthcoming.  But still, with a world trying to move away from globally detrimental resources like oil, it seems now is the perfect time for adventurous companies like Thor to blaze the trail for miners big and small to investigate and ultimately produce resources in an utterly neglected mining region.

Around the Traps

We always listen The Critical Investor’s thoughts carefully, so we were very interested to see their stock picks for 2022 this week.  There’s a good mix of companies of various market caps from across a range of resource sectors, and as always the analysis is considered and well-explained.  These stocks will certainly be worth watching in 2022.

What an exciting week for Mountain Boy Minerals (TSXv:MTB, OTCQB:MBYMF, FRA:M9U), who are starting the year well by announcing the discovery of three new targets, including the high-grade MJ target, at their polymetallic BA project in the Golden Triangle of British Columbia.  The 500 m MJ trend remains open for extension, and it produced a real stunner of a sample grading 5.6 kg/t silver (that’s right, kilograms), 1.4 g/t Au, 16.7% Pb, 4.0% Zn and 2.4% Cu.  MJ and the two other new targets will be the subject of work during the 2022 field season.

The spectacular BA project in the Golden Triangle.
Image via Mountain Boy Minerals

Mammoth Resources (TSXv:MTH) has added and additional drill contractor at their 100%-owned Tenoriba project in Mexico to bolster the efforts of the company already onsite.  The second group started in mid-December, and their arrival will enable quicker exploration covered by an additional drill permit for 182 more holes that Mammoth announced it had received on 2nd December last year.  The new permit also allows drilling of the entire 6 km trend of surface Au-Ag mineralisation that the company has identified on the property.

The rapid expansion of Goldplay Mining’s (TSXv:AUC, OTCQB:AUCCF, FRA:9FY) portfolio of gold and copper projects is already paying off, with their newest acquisition, Big Frank in British Columbia, returning some great numbers this week.  There are multiple targets on the property, and highlights from the 2021 season include a grab sample with 16.0 g/t Au and 1,162 g/t Ag from a new zone, and another with 37.3 g/t Au, 174 g/t Ag and 4.3% Cu from a target associated with an EM anomaly.

A fantastic moment for Contact Gold (TSXv:C, OTCQB:CGOLF), who have announced their maiden mineral resource estimate on the Pony Creek gold project in Nevada.  The Carlin-style deposit has been assessed at 433,000 total inferred pit ounces at an average grade of 0.52 g/t, with numerous mineralised zones not counted in the estimate still under exploration and open for expansion.

Contact Gold's Pony Creek project has seen some nice results this week.
Image via Contact Gold

Chakana Copper (TSXv:PERU, OTCQB:CHKKF, FRA:1ZX) has similarly huge news: an initial inferred resource for seven breccia pipes at their Soledad copper-gold project in Peru.  Open pit extractable numbers add up to 1.9 million tonnes grading 1.29 g/t Au, 37.1 g/t Ag and 0.65% Cu, with underground extractable resources at 4.8 million tonnes grading 0.72 g/t Au, 61 g/t Ag and 0.97% Cu.  There’s also abundant room to increase the resource at depth and from the many other breccia pipes in the area.

Spectacular high-grade breccia from Chakana's Soledad project.
Image via Chakana Copper

Mawson Gold (TSX:MAW, FRA:MXR, PINK:MWSNF) is embarking on a 8,000 m regional drill programme at its Rajapalot gold-cobalt project in Finland with the goal of expanding the target beyond the current 1 Moz AuEq Inferred Mineral Resource.  One rig is onsite with another arriving next week, and CEO Ivan Fairhill says the company is “flush with high-priority targets” at the project.

Capitan Mining (TSXv:CAPT) has announced some nice RC drill results from its Capitan Hill gold deposit in Mexico, as well as the purchase of royalties for the project, leaving it royalty-free.  Drilling highlights include 35.1 m of 0.42 g/t AuEq of oxide gold mineralisation and the extension of the mineralised zone by 170 m down-dip.

Fireweed Zinc (TSXv:FWZ,OTCQB:FWEDF) has some fabulous results from drilling at the Macmillan Pass project in the Yukon, with 11.7 m (true width) returning 6.9% Zn, 5.0% Pb and 48.7 g/t Ag and even higher grades over a shorter interval.  These numbers come from the Tom East deposit, which is still open for expansion.

The Tom deposit area at Fireweed's Macmillan Pass project.
Image via Fireweed Zinc

We’ll wrap up the bonanza of drilling results this week with some more nice ones from Prospech (ASX:PRS), who announced the final results from the first modern drilling program at their Anton Au-Ag target in Slovakzia.  The numbers look promising, with a particular highlight of 0.7 m grading 4.45 g/t Au and 301 g/t Ag from hole VADD005.

That’s it from me this week, I hope you all have a relaxing or action-packed weekend, as you prefer!

- Jane Lockwood

Jane Lockwood

View posts by Jane Lockwood
Jane Lockwood is an Australian geoscientist living and working in Germany. She holds a Master's of Earth Science (Advanced) from the Australian National University and has spent several years reporting on the junior mining industry for Spotlight Mining, as well as conducting social media management for junior mining companies.