Small scale gold mining
It has been observed that small-scale mining has a high potential to create beneficial effects in less developed economies.
This is because only small-scale mine development can utilize small mineralization, absorb low skilled labour in rural areas and efficiently use scarce capital. Other important characteristics of small-scale mineral development include:
- Modest infrastructural requirements,
- Opportunities for indigenous entrepreneurship development,
- Conservation of scarce, high skilled manpower,
- Low investment costs and
- Short implementation period.
The small-scale operation is being advocated because this is perhaps the only viable means by which Nigeria’s numerous free-milling gold occurrences can be won without adversely affecting the environment.
As the World Bank and Mackenzie pointed out, the importance which man has attached to gold since time immemorial is still there and since no better substitute has been found, the metal will continue to occupy its pride of place for a long time to come.
Considering the accruable benefits of such enterprises and the likely ripple effect on the socio-economic life of Nigerians, it is important that Government support those who are willing to venture into this area, especially indigenous mining professionals and other knowledgeable investors.
In Nigeria, there are a number of gold occurrences which can be extracted on a small-scale basis, considering the importance of gold in international trade.
It is possible to, with less than 2million Naira, select and thoroughly explore an alluvial or eluvial gold terrain to arrive at vital information needed for a decision to mine out the commodity. Moreover, it is quite possible to start a small gold mining venture with less than 10million Naira.
This author has been involved in the investigation of several gold properties in some parts of the country. This write up, which is a direct result of his investigations, has been prepared to illustrate how that with a little investment, one can start a small-scale gold mining business.
Gold has traditionally been used as a monetary standard. The commodity is used in jewelry, dentistry, for medals, etc.
Uses of Gold
Very recently, gold has found its way into the electronic industry where it is used in the manufacture of very high reliability contacts and bonding wires.
The President of Placer Dome Inc., a world-renowned gold mining company, in 1998 said “Gold is more than a commodity, for unlike copper, zinc or nickel, gold; whether held by Central Banks or private citizens; whether held as bars, coins or jewelry, is liquid and is money”
Occurrences of Gold in Nigeria
Several publications attest to the large scale occurrence of gold in Nigeria. Russ for instance points out that large parts of the north-west harbour the metal in alluvial and eluvial settings as well as in lodes.
Recent works by Chukwu and Garba have corroborated the results of previous findings and emerged with more. Garba suggested that the genesis of gold in the country may be linked to two-fault systems called ANKA and KALANGAI; both of which traverse the western half of the country’s landmass.
The work has also shown that all areas straddling the two faults contain potential spots where gold can be found. This is aptly illustrated by the Nigerian Minerals map of 1995.
Exploration for Gold
Mineral exploration generally starts with an examination of remotely sensed data and air photographs covering large areas to delineate structural and lithologic features that may be important in the localization of the mineral.
Field checks are then organized to produce geologic maps of the areas covered and in the process; selections are made of particular stretches of land which require detailed investigations for particular types of minerals.
In the case of gold which can sometimes be very elusive, an extensive panning program covering several kilometers of stream channels that drain a particular area may have to be embarked upon.
Geophysical and geochemical methods have also been used in the search for the commodity in some parts of the world.
Very importantly, however, it has earlier been realized that gold mineralization in Nigeria occurs as disseminations in amphibolites and schists as well as in quartz veins occupying fractures or shear zones.
With the amount of knowledge that has now accumulated on gold in Nigeria, one can say that there may be no need for a virgin work in trying to establish the easy-to-win alluvial occurrences in the country but rather, detailed examinations of already known sites to establish qualities and quantities that may eventually be won there from.
There is also room for more discoveries if simple panning techniques are used in areas not previously known to be prolific with the metal.
An important aspect of mineral exploration is the estimation of the reserves of a mineral being sought from an area.
The estimated reserves give an idea of the quantity of the commodity obtainable from working the resource and therefore its economic worth.
Thus the knowledge of the reserves, the cost of mining the mineral of interest and the monetary value of these reserves are very important in making a decision on mining the mineral.
To be able to give a reasonable estimate of reserves, the gold-bearing material has to be drilled or pitted. The materials collected have to be treated by fire-assaying if the particles are extremely fine or simply by sluicing, if the particles are coarse and free-milling as is the case in alluvial terrains.
Calculations are then made of the quantities of the economic materials in the chosen area to arrive at reserves estimates.
Assuming a piece of mineralized land of about 100 hectares underlain by gold-bearing alluvium or eluvium has been delineated, it is possible to thoroughly explore such an area to give an idea of its gold grade and reserves down to about 5 meters below the surface at a cost of less than ₦5 million.
The main exploratory activities that need to be undertaken include the following:
- Digging of pits in a gridded pattern at an average cost of about ₦300 per meter for say about 250 pits. This will cost about ₦375, 000.00.
- Fabrication of a sluice box based on the observed characteristics of the gold particles, like grain size variation and particle shapes. Experience has shown that with about ₦100, 000.00, one can fabricate and deploy a sluice box complete with accessories to even remote locations.
- Sluicing of the materials from the pits at a rate of about ₦500.00 per ton along with provision of sluicing water. Assuming all the materials from a 1 metre diameter and 5 metre deep pit has to be sluiced; the proposed 250 pits will require ₦350, 000.0O only.
- Miscellaneous expenses including local transportation, property rights acquisition, geologic mapping etc, may gulp up to about ₦500, 000.00.
Gains of Exploration
Variable amounts of gold can be won during exploration depending on how rich a gold-bearing terrain could be.
For instance, if the material has a grade of say just 2 grammes per tonne, at a conservative recovery rate of only 50% by sluicing, 10 tonnes would produce 10 grammes of gold. If the grade is higher, the gains would be correspondingly higher.
Thus, if an Exclusive Prospecting License (EPL) is carefully selected and explored, it is possible to recover the amount expended and to even make profit before the commencement of mining proper.
An Exploration Case Study
Very recently, the author has been involved in the exploration of a small gold property. The aim of the investigation was to determine the economic feasibility of mining out the gold which was found to be associated with alluvium.
Location and Geography of the Area
The area is situated in the Federal Capital Territory (FCT).
The area is underlain by granitic gneises, migmatites and amphibolites which have been intruded by aplite. Segregations of quartz as well as ramification of amphibolite by quartz stringers are common features of the amphibolite in the area. In some places, the aplite shows a gneissic structure.
A fracture-filling quartz-galena vein up to 30 metres long and some 5 metres wide outcrops about 800 metres south-west of the village. Some 2 kilometres north of this area, small galena stringers can be seen ramifying through the gneissose aplite.
Pitting, Trenching and Gold Recovery
Pitting, Trenching and recovery of gold were organized to cover a span of land in which alluvium has accumulated.
A total of 88 pits were dug to penetrate the soily overburden and then the pebbly gold-bearing alluvium which directly overlies the migmatic basement.
On the stream channel which was dry during the time of investigation, trenches were dug at intervals of 100 meters from the lower to the upper reaches within the EPL until the pebbly gold-bearing layer bottoms.
The materials dug out from the pits as well as from the trenches were sluiced with the help of a 5-metre long and 40 centimetre wide sluice box fabricated from galvanized iron sheets and fitted with an improvised trommel screen. The materials were hauled by men using head pans and the sluicing water fetched from a nearby pond.
The pitting and trenching programmes showed that the gold-bearing layer has an average thickness of about 1 metre and is exposed only on the stream channel bed.
The area coverage calculated from extrapolation from the surface is about 25,500m2 and thus a volume of about 25,500m3. The sluicing activity gave an average gold content of the pebbly layer, of about 0.6gramme per tonne.
The particles are mainly flecky and hardly up to 3mm across. A few granular ones up to 0.5mm across were also observed.
From the total volume of the gold-bearing resource investigated, the amount of gold that may be mined is about 40,700 grammes.
However, the easily minable portion is the stretch along the stream channel which has an average width of about 5 metres extending for about 1200 meters. This should produce at least 9,500 grammes.
Having understood the characteristics of gold in an area such as the one discussed above, production can be planned with the following requirements:
- Setting up a mine camp
- Building of an access road,
- Construction an earth dam for water storage,
- Hiring of earth-moving equipment,
- Installation of coarse and fine gold recovery equipment,
- Personnel and overhead costs.
The costs of the individual items listed above cannot be the same every where. Taking the example of the area investigated above with its location close to a secondary link road, the construction of a new road becomes unnecessary.
An earth-moving machine to be used can simply be a heavy duty tractor to loosen the gold-bearing material along the stream channel. As for provision of water, there are a number of deep gullies, which can easily be dammed.
The most important piece of equipment that may have to be purchased is the fine gold concentrating equipment which may be Pressure jigs Gravity concentrators which have capabilities for recovering micron-sized gold particles.
A market survey shows that these types of equipment can be obtained with less than ₦2 million for a unit of 3-5 tonnes per hour capacity. The overhead costs will be for maintenance of the few items of machinery like petrol generators and water pumps needed in the field.
For the area under consideration, the following is a list of requirements that can work the deposit:
Return on Investment
The winning of gold should start within weeks of commencement of field operations.
At a projected daily winning of about 50 grams, worth about 300 dollars or about ₦27, 000.00 per day, or nearly ₦600, 000.00 per month, the following table illustrates the relationship between expenditures and earnings within the first ten months of operations:
Relationship between Expenditure and Earnings:
It can thus be seen that the investor should break-even by the end of the tenth month of operations and thereafter continue to accumulate profits.
Mining business is a capital-intensive investment, which sometimes requires long gestation periods before one can make profits.
This is because money has to be spent in order to establish the presence and quantities of a mineral before a decision can be made on mining it out. This is with the assumption that a market already exists for the commodity.
Government can also help miners recoup expenses, by buying the gold and storing it in the Central Bank as is the practice in other parts of the world.
More often than not, the monies needed for mining may not be immediately available to the promoter of the business and these have to be borrowed.
For financial institutions to grant any assistance for mining however, it has been pointed out that the risks involved must be clearly defined. These are generally summarized under the four ‘P’s- Project, Performance, Price and People.
Written by G. K. Gabako amd first published in Cachemagazine in 2005