Hunting the elephant.

Author:Ross, Priscilla

South African mining houses, previously limited to exploring in their own backyard, are now prowling all over the continent in the hunt for lucrative mining 'elephants'.

Africa has become the primary exploration focus of most South African mining companies. This statement seems almost platitudinous without recent historical hindsight. Until Nelson Mandela was swept to power on the populist vote in 1994, South African mining houses were confined largely to exploring in their own backyards for mineral prospects, but now there is increasingly an adventurous tendency to reach out to the wider world.

For example, a wholly owned subsidiary of Iscor, the South African steel and mining company, Oribi Resources, recently bought an equity stake of C$3m in the Canadian company Western Pacific Gold Inc., as well as warrants which, if exercised, would raise the investment to C$16m over four years. Western Pacific Gold has had considerable exploration success in the Solomon Islands, and is drilling polymetallic prospects in Papua New Guinea. The Iscor investment will beef up Western Pacific Gold's exploration budget and put the drilling schedules into the fast track.

In Tanzania, Iscor has a joint venture with Ormonde Mining, on the Mrangi property in the Musoma-Mara Greenstone Belt of northern Tanzania.

Anglo American Corporation of South Africa Exploration Tanzania has bought 200,000 shares in Afrika Mashariki Gold Mines (AMGM) for US$7.5m. AMGM intends to develop the Nyabirama and Nyabigena deposits in the North Mara project area, where a total of 1m ounces of gold has been outlined by exploration drilling.

In March 1997, a Canadian junior company, Mountain Province Mining (MPM), announced a joint venture with Monopros, a wholly owned subsidiary of De Beers of South Africa, in the Canadian north west territories. In September 1997, MPM said it had been notified by its contractor, Monopros, that De Beers estimated that the AK-5034 diamond pipe had a potential revenue stream of US$82.50 per tonne or $55 per carat. Diamond mining experts believe that the discovery of a further two more deposits similar to the AK-5034 pipe will justify the full commercial development of a diamond mine by the joint venture partners. So the offshore ventures of African mining houses and their partners are meeting with some solid success.

Rule of thumb

The question is -- what are all these mining companies in such hot pursuit of across the length and breadth of Africa and in...

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