Mining experts compare Eritrea’s largely underexplored underground potential to that of established mining regions in Australia or Canada.
A lot of raw materials are stored in Eritrea. However, weak political relations have so far deterred many Western mining companies. However, the remarkable results from exploration could lead to a rethink.
Alpha Exploration (TSXV: ALEX, WKN: A3DLBX, ISIN: VGG3198S1074, Ticker: ALXPF) CEO Michael Hopley is a familiar face in Eritrea’s mining industry. From 2004 to 2016, he managed the operations of Sunridge Gold Corp, which owned the Asmara project at the time. Sunridge had discovered a huge copper-zinc-gold deposit there, the Emba Derho deposit.
Today, Hopley is exploring for gold, copper and zinc with Alpha Exploration a few hundred kilometres southwest of Asmara. The Kerkasha Project covers an area of 771 km2 and is an area of historic Italian gold mines and small-scale mining. The Explorer’s team has identified 20 new exploration areas since the acquisition. Three of them are considered particularly promising: “Aburna“, “Anagulu” and “Tolegimja” each have what the company’s geologists estimate have a “multi-million ounce potential”, as it is called in the industry.
The big projects are in Chinese hands
Although Hopley – like other members of the management team – has been active in the country for a long time, he remains an exotic figure in one respect, as he runs a Western company. Eritrean mining is heavily influenced by China and other non-Western powers.
Eritrea is seen as the answer to many questions about the supply of raw materials in the future. From a geological point of view, the country is extremely interesting for mining companies looking for deposits and building new mines.
The Arab-Nubian Shield – a Precambrian basement unit of northeast and east Africa as well as the west of the Arabian Peninsula – is home to huge deposits. The area is home to more than 1,000 historic copper and gold mines. Mining databases also list more than 6,000 additional prospective targets that have been superficially explored for deposits.
Geologists suspect large deposits under the Arabian-Nubian Shield
Geologists emphasize the special features of the plate. Several types of deposits have already been identified. These include volcanogenic massive sulfides, which contain a significant portion of the world’s resources. However, orogenic and epithermal deposits and porphyry copper deposits also lie beneath the surface.
The resource-rich area is considered to be largely underexplored. Mining experts compare Eritrea’s underground potential to that of established mining regions in Australia or Canada. The deposits there – past and existing – are well known through extensive exploration activities over the last 100+ years. There could be just as many deposits in Eritrea – but they have not yet been found or at least not reliably investigated.
However, the country’s location also contributes to its outstanding importance for the future supply of raw materials. On the one hand, a large part of the Arab-Nubian Shield is located on the territory of Saudi Arabia, which is less easily accessible from the Chinese point of view: unlike poor Eritrea, Riyadh does not need financial support and can buy all the necessary technology and know-how from any partners. On the other hand, Eritrea is located on the Red Sea. This enables raw materials to be transported cost-effectively by sea.
China sets the tone in Eritrea
The extent to which China dominates the country’s mining industry can be seen by looking at the ownership structure of the existing mines. The Bisha mine in the west – the largest zinc mine in Eritrea – is majority-owned by the Zijn Mining Group.
The Zara gold mine is owned by the SFECO Group, and the Asmara deposit is owned by the Suíchuan Road & Bridge Group. This year, too, the company acquired the Colluli potash mine from the Australian company Danakali – apparently at such a high price that Danakali Ltd is now focusing on the “identification of new projects”, according to its homepage.
Western countries, on the other hand, showed little interest in the country for a long time. The government, which is classified as autocratic, and the military involvement in the Tigray region until the end of 2022 are straining relations.
But there were and are attempts at rapprochement. After the peace agreement was signed between Eritrea and Ethiopia in July 2018, German government representatives and members of the German Bundestag visited the country. The EU shapes relations within the framework of the European Development Fund.
Rich deposits also offer opportunities for Western explorers
But Western companies are not excluded. Although the West’s relations with Eritrea are cold, this has little impact on the economic prospects of Western companies.
Years ago, the country’s government identified mining as a possible growth path – with success. In recent years, several large mines have been put into operation. The search for new deposits is also in full swing.
A number of Western companies are also involved in the hunt for valuable mineral resources, such as Alpha Exploration (TSX. V: ALEX, WKN: A3DLBX). The company, which is based in the British Virgin Islands, has deliberately opted for comparatively exotic locations – and does not seem to suffer from this operationally.
In 2023 alone, more than 10,000 m of drill programs were completed. In addition, 3,678 m of trench and channel sampling, a ground magnetic geophysical survey and a Gradient Array Induced Polarization (GAIP) were completed.
The assumption of high precious metal contents could be confirmed. Evaluations of numerous drill results are still awaited. However, drill samples to date have returned more than 14 g/t gold at the peak.
In any case, Hopley is optimistic and points to the GAIP and ground magnetic surveys at the Company’s flagship Aburna gold project. He believes that the results leave room for significant expansion of the current mineralization and that there is potential for additional drill targets. In a comparatively short time, results were achieved that are considered extremely respectable among explorers.
The results of Alpha Exploration and other explorers in the country are widely noticed in the industry. High metal grades and rapid exploration are what the project market demands. It is therefore quite possible that Chinese companies in Eritrea will soon face more competition from the West. [EQS News – software translation from German]
More information about Alpha Exploration in the company profile on Miningscout