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WhyAfrica’s Hawks Eye is on Akobo in Ethiopia

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Drill core at Akobo Minerals’ Segele gold project in the southwest of Ethiopia. Image credit: Akobo Minerals

By Leon Louw founder and editor of WhyAfrica

27 June 2021 – Despite the crisis in Ethiopia’s Tigray region, there are still good opportunities for gold explorers in this vast country. Norwegian based Akobo Minerals has been active in Ethiopia for long enough to understand the upside. WhyAfrica’s Hawks Eye is on Akobo in Ethiopia.

In Northeast Africa, the Nubian Shield stretches from the Sinai Peninsula and Egypt in the north, through Eritrea to Sudan, South Sudan, Somaliland, and Kenya in the south.

In 2014 there were more than 30 exploration and/or mining projects targeting gold, gold-copper, or gold and other base metals in the Nubian Shield. In Ethiopia the Lega Dembi mine, Sakaro mine and the Tulu Kapi project gained significance and still features prominently in an overview of the country’s mining landscape.

Akobo Minerals has been doing exploration work in Ethiopia for more than 10 years, and over the past year or two has made significant progress since the company was granted its first exploration license in Ethiopia in 2010.

A high-risk investment

Akobo’s projects in Ethiopia include the Segele and Joru gold deposits. Akobo might be on to something in a region which could become a significant gold player if the political and security situation improves.

For those investors with a high appetite for risk though, it might be worth a second glance. If the Tigray crisis can be resolved, and the Covid-19 pandemic brought under some form of control, there is no doubt that Ethiopia will resume its pre-Covid-19 growth.

In the long term it might be a good idea to consider investing in gold projects in the region that boasts good management, good deposits and well proven reserves and resources.

Invest in good geology

Akobo is an extensive placer gold region characterised by a Neoproterozoic belt of metamorphic rocks. These rocks constitute the southernmost part of the Western Ethiopian Shield, a southern extension of the Arabian Nubian Shield.

According to a report by Akobo large and small bodies of ultramafic rocks characterise the Akobo area.

“Similar rocks occur along the belt to the north, including at Yubdo, Tulu Kapi, Tulu Dimtu, Baruda and Asosa. Gold is broadly associated with these areas of higher concentrations of ultramafic bodies, having been produced from placer deposits in these western areas of the country since ancient times,” states Akobo Gold.

Exploration permits and logistics  

Akobo Minerals owns 99.97% of the Akobo project through its Norwegian and Ethiopian subsidiaries. The exploration permit for the Akobo Minerals project is held by Etno Mining, a 99.97%-owned subsidiary of Akobo Minerals.

Akobo’s exploration license covers 183km2 in the southwest of Ethiopia. The licence is 10 years old and is renewed on an annual basis.

The project is about 700km by road from Ethiopia’s capital Addis Ababa and 20km from the border with South Sudan.

Long history of gold mining

The history of gold mining in this part of the Nubian Shield dates back millennia when gold was excavated and transported to Egypt for the benefit of the pharaohs.

As mentioned above, a multitude of companies operated in the region since then, with varying measures of success. When Akobo Minerals arrived on site, mining was undertaken by close to 25,000 local artisanal miners digging for gold using rudimentary tools.

According to Akobo’s latest annual report, Segele and Joru are considered exciting prospects for gold. However, these projects are quite different.

Segele is small, with high concentration of gold, while Joru covers a larger area, with a lower gold content.

Work undertaken by local Ethiopians

All the exploration work at Akobo has been undertaken by local geologists previously involved in the Geological Survey of Ethiopia, which was central in the exploration and discovery of Ethiopia’s successfully operated Lega Dembi gold mine.

An intensive drilling program started at the end of 2019 in Segele, and has so far shown exceptional high-grade gold results, particularly following a new round of drilling which commenced in late 2020.

The results were confirmed by the international recognised analytical laboratory, ALS.

Quality management team and shareholders

Akobo is run by a management team, based in Norway and Sweden, which has a strong track record of corporate management and minerals exploration competence.

This team is supported by a workforce in Ethiopia which at the end of 2020 comprised 30 locals. Akobo’s strategy is to find, train and work with in-country employees, who will work with the small management team in Norway and Sweden, thereby ensuring a low operational cost for the company.

Akobo Minerals is listed on the Euronext NOTC exchange in Oslo in Norway, with a full listing on the Euronext Growth exchange expected later this year.

The company has more than 3500 shareholders, of which 87% of the shares are held by Norwegian investors and 6% by Ethiopian management, while 7% are held by Swedish investors. WhyAfrica’s Hawks Eye is on Akobo in Ethiopia.

Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs.        

WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. To subscribe to WhyAfrica’s free newsletter or digital magazine, and for more news on Africa, visit the website at www.whyafrica.co.za or send a direct message.

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