Appendix 2
Mining investment in areas of conflict:
The case of the Democratic Republic of Congo (DRC)
In May 1977, a rebellion led by the Alliance of Democratic Forces for the Liberation of the Congo
(AFDL) and supported by several neighbouring countries (particularly Rwanda, Uganda, and
Angola) overthrew the regime of Zairian President Mobutu. According the US Geological Survey,
the coming to power of Laurent-Désiré Kabila as head of state in the renamed Democratic
Republic of the Congo (DRC) temporarily delayed the implementation of proposed new projects
to revitalise the country’s mining sector:
“Disruptions caused by civil war in 1997 and the uncertain investment policies of the new
government were a setback to the proposed new mineral development needed to revitalise the
mineral economy of Congo (Kinshasa). Historically, the mining industry accounted for 25% of GDP
and about three-quarters of total export revenues. The near collapse of the economy, however,
has made it difficult to sustain normal mining activities”. 1
Since 1995, the Congolese mining sector has been undergoing profound transformations under
pressure from the Bretton Woods Institutions. Large sectors of industry which were largely owned
by the State were sold off to private investors. According to the same source:
“During 1996 and 1997, the Government (of Mobutu) was successful in attracting a number of
foreign investors, particularly Canadian junior mining and exploration companies, for new
grassroots exploration and joint ventures with Gecamines on the rehabilitation of known copper-
cobalt, gold, manganese, and zinc mining properties. Parastatal operations targeted for
privatisation or joint-venture redevelopment included some 20 copper-cobalt and zinc mines and
processing facilities owned by Gecamines, the gold-tin producer Société Minière et Industrielle du
Kivu (SOMINKI), the major diamond producer Société Minière de Bakwanga (MIBA), and the major
gold producer Office des Mines d’Or de Kilo-Moto (Okimo). In 1997 over 100 preliminary
agreements for exclusive exploration zones (ZER or zones exclusives de recherche) had been
signed and another 200 were pending. The projects held the potential for between $2 billion and
$3 billion in new investments needed to revitalise the Congolese mining industry.”2
If the new leadership in Kinshasa did not call into question the entire project of remodelling and
privatising the mining industry, nonetheless several of the contracts already in place came under
review. Among the companies affected were Ashanti Goldfields Company Limited with its Okimo
gold mine; the Canadian mining company Banro Resource Corporation, previously African
Minerals Resources Inc. with its subsidiary company Société Aurifère du Kivu et du Maniema, SARL
(SAKIMA); American Mineral Fields, whose project involving cooper–cobalt tailings was called into
question; and lastly a contract concerning exclusive rights over the sale of diamonds that had
been signed between Société minière du Bakwaga (MIBA) and De Beers Centenary AG.
However, beginning in August 1998 a second rebellion erupted with the support of several
neighbouring countries: Rwanda, Uganda and Burundi. For their part, other countries in the region
supported the Kinshasa Government: Angola, Zimbabwe, Namibia, and Chad. In this way, the
initial rebellion transformed itself into a regional war. Given the limits of state revenues, both the
DRC Government and the leaders of the rebellion were faced with the situation of having to
come to quick agreements ceding mineral exploration rights over the nation’s mineral wealth,
1
George J. Coakley, ”The Mineral Industry of Congo (Kinshasa)” in United States Geological Survey, Mineral Information 1997 . Page J1.
Site of the United States, Department of the Interior, Mineral Information – International, Africa and the Middle East. (http: // www:
minerals.usgs.gov/minerals/pubs/country/africa.html )
2
Ibid.
I
particularly its rare and precious metals, to their respective allies3.
Faced with a violent situation whose primary victims were the local people, the mining
companies’ reactions were mixed. In a context of insecurity and with the threat that the
country’s territory would be divided in two parts under separate control, some companies
adopted a wait-and-see stance prior to re-launching their operations. Others, a good number of
these Canadian, decided to proceed.
Even if a large number of African countries offer a significant mining potential, (Ghana, Guinea,
South Africa, Tanzania, etc.), the DRC possesses by far the continent’s richest mineral deposits.
Having been at the centre of important geopolitical considerations during the cold war, the
country seems to have been ”rediscovered” after the period of political instability in the mid-
1990s. Graph 1 outlines the evolution of Canadian mining properties in the DRC between 1993 and
1998. Despite the relatively small number of holdings involved, these have grown on average by
55% annually4.
Graph 1: Canadian mining properties in the Democratic Republic of the Congo,
from 1993 to 1998 (companies of all sizes listed on Canadian stock exchanges)
Source: Natural Resources Canada.
Several Canadian companies have been more evident in the DRC and neighbouring countries.
Briefly, here are the companies that either have traditionally been involved in the region or those
that have more recently appeared on the scene.
AMERICAN MINERAL FIELDS INC.
American Mineral Fields (AMF) is a Canadian mining company established in 1979 in British
Columbia under the name Black Pearl Petroleum Ltd. Following four name changes over 20 years,
AMF was created in 1995 in Canada’s Yukon Territory. This mining company’s development,
whose headquarters are now located in London, and which has an office in Texas in addition to
the one in Vancouver, is similar to that of a number of mining concerns at the end of the 1990s.
Many rely on the North American stock exchanges, in particular those of Toronto and Vancouver,
for financing for purposes of exploration and especially produtive activities, have become
associated with multinationals that are well established on the African continent, such as De Beers
in diamond sector.
3
For a more detailed presentation on the stakes involved see: Erik Kennes in l’Annuaire des Grands Lacs , 1998-99, CERGLA-Université
d’Anvers, 1999.
4
Figures based on average annual growth rate (geometric average) between 1993 and 1998.
II
As well as being present in Brazil, Russia, and Norway, American Mineral Fields has been involved
on the African continent, particularly in Zambia, Angola and the DRC, since its most recent name
change in 1995. Jean-Raymond Boulle, who holds 36.4 % of the stock in the company 5, has long
experience in the mining sector in Africa. Formerly the General Director of De Beers in what was
then Zaire, he founded American Mineral Fields with the expressed intention of offering North
American investors access to African mineral resources6.
The company shares the ownership of Congo Mineral Development Ltd. (50%-50%) with the Anglo
American Corporation of South Africa. Congo Mineral Development Ltd. holds a 60% interest
(Gecamines 40%) in a project for the reprocessing of mine tailings at Kolwezi for which a 1996 pre-
feasibility study estimated the reserves to be 107 million tons containing 1.34 % copper and 0.26%
cobalt.
In DRC, Jean-Raymond Boulle, with American Mineral Fields and its subsidiaries in the DRC, expects
to reopen the Gecamines owned mine at Kipushi that at its peak in 1988 was producing more
than 100,000 tons of zinc and 50,000 tons of copper. The objective is to return as quickly as
possible to these levels of production by virtue of the investment of CAN$50M as part of a joint
venture with Gecamines7. However, it seems that President Laurent-Désiré Kabila shifted his
alliances and abandoned the smaller mining companies (juniors) to the benefit of the larger firms
with the cancellation in December 1997 of significant contracts with American Mineral Fields
International8 and with Lundin (Swedish) for the exploitation of the copper and cobalt deposits of
Tenke Fungurume. With respect to the development of the Kolwezi-West zone, that contains 80 %
of the reserves of copper and cobalt, Gecamines has associated itself with Anglo-American,
Billiton, Iscor, l’Union minière and the Societé chinoise des métaux non ferreux9.
BANRO RESOURCE CORPORATION
Banro Resource Corporation is a Canadian company based in Toronto. It has three subsidiaries:
Sakima SARL—in which it holds a 93 % interest—Banro American Resource (formerly African Mineral
Resource Inc.) and BRC Development Corp. Among others its Officers include Bernard Van
Rooyen and William Wilson. The majority stockholder in Banro Resource Corporation is Cluff Mining
Ltd., an anglo-american company. Cluff Mining holds 1,883,367 shares in the Canadian company
or 12.6% of its capital. Its September 30, 1998 financial figures show that total share value is set at
CAN$ 29,738,241 and that its shareholders’ equity amounted to CAN$28,165,935. The preceding
fiscal period had featured numerous expenditures and relatively few revenues because mining
operations had not yet gotten underway. Between June and December 1997, its total
exploration expenses rose to more than CAN$9M.
Banro Resource Corporation has interests in Africa and notably in the DRC. It holds 93% of the
Société Aurifère du Kivu et du Maniema (Sakima). The government of the DRC holds the remaining
7%. Sakima is the new name for Sominki following its restructuring. Sominki was created in 1976 as
the result of the fusion of nine companies, including Symetain and Cobelmin. Sominki was 72% held
by Empain Group and 28% by the Zairian Government of the time. In 1986, Empain Group sold
Sominki. In September 1995, Banro acquired an option to purchase Sominki. In January 1996, Banro
and its joint venture partner Mines D’or Du Zaïre – MDDZ each acquired 36% of Sominki—the
government retained 28%. In September 1996, Banro bought MDDZ, gaining a 72% controlling
interest in Sominki. Finally, in January 1997, Banro signed a new mining agreement granting it 93%
5
Southam Mining Publications Group Ltd (1999), Canadian MineSCAN 1999-2000 .
6
François Misser and Olivier Vallée (1998),” Des matières premières toujours convoitées. Les nouveaux acteurs du secteur minier africain”,
Le Monde Diplomatique , May 1998, p.24-25.
7
Ibid.
8
A wholly owned subsidiary of American Mineral Fields.
9
Ibid.
III
of the restructured and renamed Sakima.
Sakima possesses 47 mining concessions representing a total surface area of 10,271 km 2 in the
provinces of Sud-Kivu and Maniema, in the east of the country that is currently under rebel control.
The Namoya-Twangiza gold belt covers a distance of 180 kilometres (northeast-southwest) and
contains ten gold deposits. These are assessed as potentially containing 13,000,000 ounces of
gold. Sakima has lent priority to four projects in this zone: Twangiza, Kamituga/Mobale, Lugushwa
and Namoya. The estimated resource base at Twangiza is 104,600,000 tons with a content level of
2.12 grams of gold per ton or 7,127,915 ounces of gold. The first phase of the project cost
CAN$6.3M. Phase 2 of the Twangiza project (which began in mid-July, 1998 for 160 days) was
valued at CAN$3,700,000. It involved drilling for diamonds, metallurgical testing and a complete
pre-feasibility study. The cost of phase 1 at Nayoma is estimated at CAN$1,700,000 with resources
estimated at 12,570,000 tons at 6.19 grams per ton or 2,501,875 ounces of gold. As for the
Kamituga/Mobale site, resources are estimated at 2,526,000 ounces of gold. And finally, in 1979,
the holdings at Lugushwa were evaluated as containing 3 million tons of ore with a content of 4.5
grams per ton or 434,000 ounces of gold and 2.5 million tons containing 4 grams per ton or
321,500 ounces.
Banro’s concessions in South Kivu and Maniema were expropriated on July 31,1998 by the new
Government brought to power with the first rebellion. Basing its argument on the pretext of
irregularities in the acquisition of Sominki, the Government dissolved the mining company without
warning or consultation. Following this, Banro launched a lawsuit at the International Center for the
Settlement of Investment Disputes against the DRC Government, seeking compensation to the
sum of one billion dollars.
BARRICK GOLD CORPORATION
Barrick Gold Corporation is a large Canadian mining company based in Toronto . It is registered
on both the Toronto and New York stock exchanges under the acronym ABX. Named to the
Order of Canada in 1993, Peter Munk, Barrick Gold’s founder and Chairperson is a leading
industrialist. Randall Oliphan, who joined the firm in 1987, is Barrick Gold’s General Director, and
Angus A. MacNaughton is its Vice President. Former Conservative Prime Minister Brian Mulroney is
Chairman of Barrick’s International Advisory Board.
As of December 31, 1998, Barrick Gold Corporation’s assets stood at $4,655 million dollars with
shareholders’ equity standing at CAN$3,592 million and its long-term debt amounting to CAN$500
million. As of the same date, Barrick’s annual revenues from gold sales stood at CAN$1,287 million.
While essentially a gold mining concern, Barrick is also involved in mining other metals such as
silver, nickel, and cobalt. Barrick’s primary holdings are in the United States, Canada, Peru, Chile,
Argentina, and more recently in Tanzania and the DRC. Here is some information concerning its
most important properties.
In the United States, Barrick holds a 100% interest in the Goldstrike concession which covers 7,940
acres approximately 40 km north of Carlin, Nevada. This property contains a number of deposits.
The main deposits are those at Betze-Post (open pit mine) and Miekle (underground mine with
high quality ore); the other deposits concerned are called Griffin, Rodeo, and Goldbug. The
Goldstrike holding has produced approximately 14 million ounces of gold since 1987 and its
reserves are estimated to still contain 7.3 million ounces. For 1999, the holding was expected to
produce 2,130,000 ounces of gold at a cost of US$133 per ounce. Following the signing of a joint
operations agreement with Newmont Gold Company in December 1992, the estimated lifetime
for the mine was extended.
For 1999, the Betze-Post mine was expected to have produced 1,130,000 ounces at a cost of
IV
$185 per ounce. The Meikle mine, situated 2 km north of the Betze-Post mine, was discovered in
1989. For 1999, it was expected to produce 1,000,000 ounces of gold at a cost of US$75 per
ounce. Barrick holds a 100% interest in Québec’s Bousquet mine. This mine is situated about 40 km.
west of Malartick, between Val d’Or and Rouyn-Noranda. Barrick acquired the mine in 1994 with
the purchase of Lac Mineral Ltd. In 1998, the mine’s gold production reached 175,621 ounces at
a cost on US$194 per ounce. The Holt-McDermott mine, also held by Barrick, is an underground
mine located on the mineral belt in Abitibi, Québec, to the northeast of Ontario about 50 km
northeast of Kirkland Lake.
In Peru, the Pierina mine, situated northeast of Lima, was expected to produce more than 800,000
ounces of gold at a cost of US$50 per ounce during 1999. The mines at Tambo (Chile), El Indio
(Chile), and Bullfrog (northwest of Las Vegas), are expected to shut down operations at the end
of 1999. Barrick also holds a 100% interest in the Pascua project, a gold and silver claim on the
border between Chile and Argentina.
As for properties in Africa, with its acquisition of Sutton Resources Ltd. in 1999, Barrick now holds
concessions in Tanzania. Barrick re-launched Sutton’s mines in this region, notably the Bulyanhulu
project (a gold deposit situated 50 km south of Lake Victoria in northwest Tanzania), the Kabanga
concession (prospecting for nickel, cobalt, and copper), and the Kagera concession obtained
through Kagera Mining Company Limited, situated in the northwest of Tanzania.
Barrick Gold Corporation’s presence in Africa is not a new phenomenon. By August of 1996,
Barrick had obtained the exploration and exploitation rights to a huge tract of land, measuring
82,000 km 2 , in the DRC’s Orientale province. However, the two rebellions that followed the
acquisition made it impossible to begin operations. With control of the territory first falling under
the Kabila government and then under the Rassemblement des Congolais pour la Démocracie
(RCD), the Ugandan-supported rebel forces, Barrick has had great difficulty having an agreement
signed during the Mobutu regime recognised. In view of the company’s interest in the region, and
depending on how the situation evolves, it is not impossible that Barrick will eventually succeed in
renewing its operations in the DRC.
CONSOLIDATED TRILLION RESOURCES LTD
Established in Vancouver in 1987, Trillion Resources Ltd changed its name on January 15, 1999 to
Consolidated Trillion Resources Ltd. with the swap of six existing shares for one share in the new
company. Its exploration activities in Africa are largely limited to Botswana and to Zimbabwe
where the company holds respectively 5 and 12 exploration permits, in addition to those it holds
in the Ivory Coast. Its production projects are principally the gold mines at Jena and Indarama in
Zimbabwe. Its involvement in the DRC is limited to exploration. The company is simultaneously
involved in a number of exploration projects throughout Africa in association with several smaller
Canadian mining companies such as Nickelodeon Minerals Inc., Oliver Gold Corporation or
Skeena Resources Limited. The Boards of all of these companies are interlinked with key members
such as Henry Giegerich, Patrick Downey, John Barclay and Ronald K. Netolitzky, to name but a
few.
Its activities in the DRC have been marked by alliances and negotiations with Gecamines and
Canadian mining partners, but also by political and military tensions which have affected the
country notably since the 1990s. It was in this period that construction in preparation for
production at the site close to Likasi in Katanga Province involving some 2,800 km2 was forced to
close down in August 1998 with the onset of the second rebellion 10. In 1998, Consolidated Trillion
Resources spent almost CAN$580,000 in development and exploration expenditures in the DRC,
which is almost 248% more than in 1997.
10
See the Annual Report of Consolidated Trillion on this subject ( http://www.trillion-resources.com/html/annualreports/98report_e.html )
consulted October 8, 1999.
V
The 1996 comments of the company’s former President illustrate that the increase in the mining
company’s activities in Africa was not unrelated to the Canadian Government’s political and
financial support to the sector from the early 1990s onward:
“Trillion’s base of operations has since expanded to include Mozambique, Tanzania, Botswana,
and, now, South Africa. Over the course of this expansion, Hansen [Trillion President] has noticed
that a ”new generation of people” have moved into government and business in Africa, a
generation highly trained and largely familiar with Canadian business practices. He credits this
development, in part, to the various aid projects that have targeted Africa over the past two
decades. Hansen believes ”CIDA made a lot of contribution to what is going on now they’ve set
the groundwork,” and made doing business in Africa much easier for Canadian companies11.”
DIAMONDWORKS Ltd.
DiamondWorks Ltd. is a Canadian mining company based in Vancouver, formerly known as
Carson Gold Corporation (it changed its name in October 1996). DiamondWorks’ Chairman of the
Board and CEO is Bruce Walsham. As of April 15, 1999 the majority shareholder in the company
was Ekuseni Resources Ltd., which holds a 17.9% interest. The mining company has assets valued
at CAN$57,525,856 and shareholders’ equity to the amount of CAN$38,243,785.
DiamondWorks has activities in a number of countries: Sierra Leone, Lesotho, Angola, Canada,
China and Venezuela. Of interest to us here are DiamondWorks’ mining interests in Africa and
more particularly in Angola and in Sierra Leone. The company began its commercial production
of diamonds in Angola in July 1997 at its mining concession at Luo and on its other concession at
Yetwene in June of 1998. DiamondWorks holds five mining concessions in Angola including its
operations at Yetwene and Luo. It also holds the rights on six diamond concessions in Sierra Leone.
DiamondWorks’ diamond holdings in Africa are estimated to contain more than 22 million carats
of high quality diamonds.
We shall now very briefly summarise the mining interests of this company in these two countries.
First of all, in Angola the company works through its subsidiary Branch Energy Ltd (in which it holds
a 100% interest). This company has interests in three diamond concessions in the Lunda Norte
Province in the northeast of the country. These concessions—Luo, Luarica and Yetwene—occupy
a territory of roughly 1,800 km 2 . DiamondWorks holds a 48% interest in the Luo mining concession
because it holds a 48% interest in Tricorp SARL, a private Angolan company that holds the rights to
the property. This concession covers 232 km2 and from the beginning of production has produced
200,000 carats or roughly 6,000 carats per month - (the average selling price for diamonds is
between $120 and $350 per carat).
The Yetwene concession covers an area of approximately 550 km 2 . It is situated 20 kilometres
northwest of Lucapa and 100 kilometres north of Luo. DiamondWorks holds a 50 % interest in this
concession and the remainder is held by Endiama—the State mining company—and by another
private Angolan mining company. The holding is understood to contain reserves of 7.8 million tons
containing 0.23 carats per ton. DiamondWorks hopes to extract 9,000 carats per month at a cost
of CAN$ 280 per carat. Production activities underway at the Yetwene concession were
suspended from November 1998 to June 1999 due to armed attacks against DiamondWorks’
staff.
DiamondWorks also holds a 60% interest in the Luarica holding situated along the Chiumbe River,
90 miles north of the Luo holding in the Lunda Norte Province. Branch Energy Ltd., a subsidiary of
DiamondWorks, has an agreement that allows it to finance, and oversee development and
production at this holding. The exploration rights are held by Mineração e Consultoria Limitada
11
Ministry of Foreign Affairs and International Commerce (1996), Trillion , December, website (http://www.dfait-maeci.gc.ca/).
VI
(MCL), an Angolan private company entitled to 90% of the value of the diamonds extracted, with
the rest going to Endiama.
DiamandWorks also holds the rights on an important exploration concession in the centre of
Angola at Alto Kwanza that covers an area of 18,000 km 2 in Bie Province. However, the
company’s activities have been disrupted since the summer of 1998 due to the political
uncertainty in the country. Finally, DiamondWorks is also involved in the G.T. concession. This
concession is situated 3 kilometres from the Luarica site and covers 531 km2 . DiamondWorks holds
a 55% interest in this property, with the remainder belonging to a private Angolan firm.
In addition, DiamondWorks also carries out significant activities in Sierra Leone, through its
subsidiary Branch Energy Ltd. (BEL). BEL holds five concessions: Koidu, Upper and Middle Sewa (29
km 2) , “Zone 7” (93 hectares), Njei-Bafi and Matemu. With respect to the Koidu site, BEL holds a 25-
year renewable lease for gold and diamond mining under an agreement involving 4 km2 near the
city of Koidu. However, despite the fact that calm has been restored to the region, this site is not
always accessible.
FIRST QUANTUM MINERALS
Particularly since the early 1990s, this Vancouver based Canadian company has been very active
in mineral exploration and exploitation in Africa. Established in 1985, the company owns a number
of subsidiaries including First Quantum Yukon that in December 1997 took over International
Ballater Resources Inc.
First Quantum Minerals (FQM) is particularly active in Zambia where it mines copper at its Bwana
Mkubwa site and it holds exploration permits for copper and gold. It has also invested in projects in
Zimbabwe, in Guinea, in Niger, in Botswana and in Tanzania.
In March of 1998 in the DRC, FQM signed two agreements with Gecamines for the processing of
cobalt and copper tailings from four large sites (Kingamiambo, Luilu, Shituru and Panda). FQM
expects to acquire 51% of the shares in the four sites, while Gecamines will retain a 49% interest.
FQM will be responsible for financing the feasibility studies and development costs for the four sites
in exchange for 85% of net receipts from production 12. Since the mid-1990s, when former Prime
Minister and Foreign Affairs Minister Joe Clark became the company’s special advisor on Africa,
First Quantum Minerals has become more active elsewhere on the African continent13.
INTERNATIONAL PANORAMA RESOURCE CORP.
International Panorama Resource Corp. is a Canadian mining company based in Vancouver. The
Chairperson of its Board is Adrian Hartman and its President and CEO is Kenneth McLeod.
According to its financial statements of December 31, 1998, International Panorama Resource
Corp.’s assets are valued at CAN$12,354,834, its shareholders’ equity is valued at CAN$10,563,727
and it has a working capital of CAN$1,715,639.
The company has two subsidiaries: Panorama Gold Inc. and Panorama Minerals Inc. It took control
of PTM Minerals (Cayman) Ltd. in August of 1996. The latter had signed an agreement with
Gecamines to develop mine tailings in the DRC. The copper and cobalt tailings came from the
Kambove and Kakanda exploitation areas in Katanga Province. PTM Minerals Ltd. is a subsidiary of
the International Panorama Resource Corp., and holds a 51% interest in the treatment of these
12
Southam Mining Publication Group Ltd. (1999), Canadian MineSCAN 1999-2000 .
13
See Sue Sutton (1998),”The Canadian Political Elite Discovers Africa”, African Access Magazine, first trimester, p.8-10.
VII
mine tailings.
The mine tailings concerned are estimated at 18,600,000 tons with a 0.15% cobalt and 1.22%
copper content. The project should produce 1.1 billion pounds of copper and 93 million pounds of
cobalt for more than 13 years. Operational costs are estimated at CAN$20 per ton.
MELKIOR RESOURCES INC.
Melkior Resources Inc. is an Ontario-based mining company. Chairperson of the Board is Norman
Farrell, and its President and CEO is Jens Hansen. This company holds relatively minor interests in
two mining properties in Burkina Faso. It is also involved in mining in Canada and particularly in
Quebec. Its mining activities are focused on gold, nickel, copper, platinum, and cobalt.
In 1997, Melkior Resources Inc. obtained an exploration concession from Gecamines for 2,800 km 2
near Likasi, in Katanga Province. On January 12, 2000, the company announced the start up of
mining operations at two sites: Kabolea, where there are copper-cobalt deposits and Kipese,
where there are gold-platinum deposits.
In its discussions with the Government of the DRC, Melkior Ressource Inc was backed by La
compagnie financière de participations internationales (Cofiparinter) of Kinshasa. The agreement
concerning these two sites sets out an initial share of 40% for Gecamines and 60% for the
Canadian firm. However, once the priority service costs are paid to Cofiparinter, the latter will be
granted 30% of Melkior Resources Inc.’s profits.
SAMAX GOLD INC.
Samax Gold is a Canadian mining company based in Toronto. Its main Officers are Robert Shirriff,
Robert Matthews with Michael Martineau as Chairperson and CEO. The company is a subsidiary of
the Swiss Addax and Orynx Group. We should also mention that another company, Adryx Mining
Metals Ltd. holds a 43% interest in Samax. Samax has a 50% share in its own subsidiary Golden Pride
Mine, with operations in Tanzania.
Samax is involved in a number of areas in Africa. It is presently active in Ghana, in Tanzania, in
Senegal and more recently in the DRC where it discovered a new gold vein at Mougongo.
Samax was recently repurchased (in large part from Adryx Mining Metals Ltd.) by Ashanti
Goldfields; the transaction was worth CAN$189M. Ashanti is also active in Senegal, Tanzania, the
Congo, Zimbabwe and Ghana.
STARPOINT GOLDFIELDS INC.
Starpoint Goldfields is a Vancouver-based Canadian mining company registered on the
Vancouver Stock Exchange. Starpoint Goldfields’ Chairperson is Harry Z. Bristman and Cecil
Musgrave is Director. The company holds the rights on concessions covering 15,000 km 2 in the
DRC, notably through its Tele and Panga projects. The company specialises in prospecting for
gold, diamonds and tantalite.
In June 1999, Starpoint Goldfields signed a joint venture agreement with Global Explorations
Corporation. Under certain conditions, Global Explorations Corporation could obtain a 50%
interest in three holdings. Starpoint’s stated goal is to increase its exploration area in the DRC as
soon as political conditions allow. The company’s financial statements as of April 30, 1999 show
that assets had risen to CAN$568,274.
VIII
TENKE MINING CORP.
Tenke Mining Corp., (formerly ”Consolidated Eurocan Venture Ltd.”—with a name change on
January 27, 1997) is a Canadian mining company based in Vancouver. Officers of the company
include Adolf H. Lundin and Rudolf G. Meuller – its President is Philip J. Wright. A. Lundin is also the
majority shareholder in Tenke Mining Corp with 35,451,398 shares or 54.2%. Tenke Mining Corp. has
three subsidiaries: Tenke Holdings Ltd., Tenke Fungurume Mining SARL and Lunding Holdings Ltd –
Eurocan (Bermuda).
The company’s main expenditures for 1997 were: CAN$112,500,000 for the acquisition of the
Tenke Fungurume concession; CAN $50,000,000 for the permit; CAN$2,145,000 for the purchase of
assets. The company’s March 31,1999 financial statements place the value of its assets at
CAN$201,016,810. Its debt was CAN$6,472,032 and shareholders’ equity was CAN$196,897,323.
Tenke Mining Corp. finances itself through a mixture of shareholders equity and loans from
international banks.
The activities of Tenke Mining Corp. include exploration, acquisition, and the exploitation of mining
concessions (i.e. base and precious metals). Tenke Fungurume Mining SARL is a subsidiary of Tenke
Mining Corp. It was created out of a joint venture between Gecamines (the DRC’s formerly state-
owned mining company) and Tenke Mining Corp. Tenke Fungurume is 55% held by Tenke Mining
Corp. and 45% held by Gecamines.
Tenke Fungurume’s mining concessions lie within the African copper belt. The main deposits it
controls are in two concessions with a surface area of 1437 km 2 in Katanga Province,
approximately 175 km. northwest of Lubumbashi.
The mineral resources contained in the concessions are of high quality and appear to exceed 520
million tons including 18.8 million tons of copper and 1.5 million tons of cobalt. Following a
feasibility study, which cost CAN$26.4M, production was to begin in December 2000 at the rate
of 100,000 tons of copper and 6,000 tonnes of cobalt per year. Over the next five years, the
company hopes to double its copper production annually. The resources contained in these
properties are expected to be productive over twenty years, with overall production exceeding
500,000 tons per year.
IX
Main Sources Consulted:
Company Annual Reports
Southam Mining Publication Group Ltd (1999), Canadian MineSCAN 1999-2000
Southam Mining Publication Group Ltd (1999), The Northern Miner CD-ROM 1987-1998
Gamah International Ltd (1999), Global Exploration and Mining Directory 1999
Vancouver Stock Exchange (1998), ”Financing the mining industry: the Vancouver Stock
Exchange’s Role as a Source of Exploration Capital” Investing in African Mining Conference,
Indaba, February 3-5 1998, Cape Town, South Africa
