KENYA – Gold mining company, Shanta Gold Limited plans to invest US$161 million in pre-production capital expenditure in its gold mining activities in western Kenya.

The Guernsey registered firm said it expects the mine in the Lirhanda corridor— a 1,161 square kilometre area that straddles Kakamega, Kisumu, Siaya and Vihiga counties, to have a productive life of nine years should it be confirmed to be economically viable.

“The West Kenya Project Scoping Study has resulted in attractive project economics. As with all Scoping Studies there is a significant amount of work to be completed before the assumptions can be confirmed,” said Shanta Gold chief executive Eric Zurrin in a statement.

“Shanta will undertake infill drilling and technical studies over the next 24-36 months to determine the economic viability of a potential mining operation. Moreover, should the economic viability of a mine be confirmed, the Scoping Study estimates pre-production capital investment of $161 million will be required from Shanta prior to first gold production,” he added.

“Should the economic viability of a mine be confirmed, the Scoping Study estimates pre-production capital investment of $161 million will be required from Shanta prior to first gold production”

Eric Zurrin – Shanta Gold CEO

The bulk of the pre-production capex will be spent in processing, at US$63 million and mining work at US$54 million.

Infrastructure works are estimated to take up US$32 million while US$12 million has been earmarked for other expenses.

Early this year, Shanta Gold acquired the seven gold mining licences from Canadian miner Barrick Gold Corporation in a cash-and-stock transaction worth US$14.5 million.

The local unit, known as Acacia Exploration (Kenya) Ltd, was originally owned by Acacia Mining before being sold to Barrick Gold Corp.

Shanta Gold Limited is a gold mining company, registered in Guernsey in the Channel Islands but which operates in Tanzania.

The company is listed on AIM on the London Stock Exchange.

The Tanzanian offices are in Dar Es Salaam.

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE