Description

The Ministry of Mines and Steel Development (MMSD) had identified thirty-four minerals of economic importance in Nigeria across the six regional mining zones. Every state, apart from Bayelsa is said to contain areas of mineral wealth. Within the minerals, Government has highlighted a number of strategic minerals that have the potential to contribute significantly to Nigeria’s economic development. These include barite, gold, bitumen, iron ore, lead/zinc, coal and limestone.

Gold is a chemical element with symbol Au {from Latin: aurum} and atomic number 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow colour and luster traditionally considered attractive, which it maintains without oxidizing in air or water.

There are proven reserves of both alluvial and primary deposits of gold with proven reserves in the schist belt covering the western half of Nigeria. The most important occurrences are found in the Maru, Anka, Malele, Tsohon Birnin GwariKwaga, Gurmana, Bin Yauri, OkolomDogondaji and Iperindo areas, all associated with the schist belts of northwest and southwest Nigeria. There are also a number of smaller occurrences beyond these major areas.

At present exploitation of alluvial deposits is being carried out mostly by artisan miners in a few places in the country. A number of primary deposits, which are sufficiently big for large scale mechanized mining, have been identified in the northwest and southwest parts of the country.

Given the huge quantity of gold stored above-ground compared to the annual production, the price of gold is mainly affected by changes in sentiment (demand), rather than changes in annual production (supply).According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tons.

About 2,000 tons goes into jewelry or industrial/dental production, and around 500 tons goes to retail investors and exchange traded gold funds jewelry consistently accounts for over two-thirds of annual gold demand. India is the largest consumer in volume terms, accounting for 27% of demand in 2009, followed by China and the USA.

Industrial, dentistry and medical uses account for around 12% of gold demand. Gold has high thermal and electrical conductivity properties, along with a high resistance to corrosion and bacterial colonization. Jewelry and industrial demand has fluctuated over the past few years due to the steady expansion in emerging markets of middle classes aspiring to Western lifestyles, offset by the financial crisis of 2007–2010.

This report seeks to examine the financial viability or otherwise of mining gold ore and processing same in Nigeria. Processing and separation of the gold nuggets would be done in any of the processing plant stated in the body of the report.

The business would entail using mechanized method of mining to produce 200 tons per month of gold rocks in which minimum of 20 grams of gold per ton will be extracted from the final milled rocks which will finally be 4000 grams.