EXECUTIVESUMMARY

The objective of Suri special small scale gold mining Enterprise is to extract the placer gold in an
economically feasible and environmentally friendly way having a great contribution to the national
economy of the country. The project area is located in south western Ethiopia Suri Woreda,Kurum
Kebele,Bachagi Special Place, west omo zone, SWER State. It is owned by Local people micro
Enterprise for jointly work. It is located about 180km from Mizan Aman city and 340 km far from Bonga
capital of SWERS and 754km from Addis Ababa.
The expected gold reserve will be around 60 kg. The laboratory test shows that the gold purity level is
around 91% i.e. 21 karat gold. Therefore, taking the price of gold for 21 karat, within 5 years plan the
company will be earn gross income near to Birr 31,068,520.00
The company will produce the gold within four years by using method of open pit mining, which mining
is performed by using different earth moving and washing machineries. With this process the thick
overburden containing the gold bearing layer is excavated and the excavated gold-bearing materials are
processed to recover the gold. The method for the alluvial gold mining uses gravity as the basic sorting
force. The project is a good contribution considering the huge unemployment rate prevailing in the
country.
In addition, it will increase the gold reserve of the National Bank of Ethiopia, which will increase the
capacity of the country in international marketing operation.
The project is to be financed through own fund (owners’ equity) and bank loan at a rate of 30:70
equity debt ratios during the initial year of investment. The balance of investment or capital cost
requirements of the subsequent year however expected to be financed by the surplus generated
internally from the project.

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 1.Back Ground
Historical records witness that thousands of years back, Ethiopian merchants were trading gold, spices,
ivory and other commodities in Asian and Arabian markets to buy textile and other products. Particularly,
gold was the main commodity exploited by artesian miners from many areas. Today it is an established
fact that gold mineralization is known to occurring southern, south western and northern parts of
Ethiopia, where the Precambrian basement rocks are exposed. In some of these regions gold has become
the primary, if not the only, means of subsistence for millions of people engaged in artesian mining.
Although the country is believed to have a mineral potential that can contribute more to the national
economy, so far the mining sector constitutes about 6% only. Nevertheless, decades of efforts have
resulted in the increasing of the foreign currency earnings from the export of gold, tantalite concentrate,
platinum, decorative dimension stones and gems tones. With this background the proponent Suri special
small scale gold Mining Enterprise has acquired placer exploration around Kurum Kebele, Bachagi
Special Place by Suri ethnic peoples. The company ongoing the alluvial gold exploration and discovered
minable placer gold deposit around the kebele we compile the feasibility of techno gold mining area
around. This document presents the feasibility study for mining license application. It covers the
geography, geology, and exploration work, reserve of the deposit, mining method, production program,
resources requirements, finance and economics of the mining project.
Geography Location
The project area is located in Suri Woreda,Kurum Kebele,Bachagi Special Place and around the

whole kebele within SWERS in west Omo zone. It is situated about 799 km south west of Addis Ababa.

The project area covers a total area of 10 hactor. It is bounded by geographic coordinates listed in the
table below (Table 1) and also shown in Figure 1. The coordinates are in UTMZONE 36N projection
and ADINDAN datum.
2
 Table 1: Geographic coordinates of the project area (Coordinates System UTMZONE 36N and
Datum:-Adindan .)
No x-coordinates y-coordinates B1 Area Corn-Points

1 779223 637376 UTMZONE, WGS 1984,36 N

2 779416 637152 UTMZONE, WGS 1984,36 N
3 779618 637312 UTMZONE, WGS 1984,36 N
4 779437 637504 UTMZONE, WGS 1984,36 N

3
 Accessibility and Infrastructures
The project area can be reached via the main road that joins Addis Ababa and Mizan Aman through
Jima-Bonga Mizan-Dima, 740km to kibish 180km Gravel road. Various settlements and villages are
connected by networks of foot trails very useful for geological traversing. There is also an air strip in
Tumi near Surma (Kibish) town. Banks, health post, and internet services, direct line
telecommunication can be found in, Surma (Kibish) to Dima town. Nowadays all the towns have
microwave telephone system including the smaller villages which are connected with mobile and
satellite telephone.
Physiography
Regionally, the area consists of flat 500m with altitudes ranging from 500 to 600 m above sea level (Fig.

2). The placer occurrence of Kurum, Bachagi Special Place has an average 100,000m2 and width of vary.
The topography shows a geological control where the prominent ridges are formed mainly by
amphibolites, granites, gneisses, metaultramafics , and sometimes quartzite; while low grounds are
formed by biotite gneisses and quartzo- feldspahatic gneisses and schist’s.

Figure 2.Physiographic map of the area (curtsey to Google map)

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 Climate and Vegetation
The project area is characterized by relatively wet climate where the rainy season lasts from April to
July. A little precipitation may occur, during the months of August to October, while the region remains
generally dry for the rest of the year. The hottest months are December and January.
The vegetation cover in the area is dominated by continuous dense and deciduous trees with thorny
shrubs and scattered small trees mostly acacia which covers most part of the low lands. However, big
trees are common along the course of intermittent streams.
2.5 Socio Economic Condition
The project areas are sparsely populated and inhabited by semi nomadic suri ethinic and Zilmamo
speaking, peoples. They subsist on their cattle breeding and less commonly farming and artisanal mining.
A few health centers give service to the inhabitants. The economy of the Suri is based on agriculture[16]
and livestock herding. They keep cattle and goats, the main source of wealth. Crops planted are sorghum,
maize, cassava, cabbage, beans, yams, spice plants and some tobacco. During the dry season, the Suri
also collect honey. The Suri pan gold in nearby streams which they sell for cash to highland traders. Suri
women also used to make earthenware pots and sell them to neighbours, like the Dizi, and also sold
produce of game hunting. These activities have sharply declined in the past decades. They now also
produce local beer (gèso) for sale. The average married male in the Suri tribe owns somewhere between
30 and 40 cows. These cows are not killed unless needed for ceremonial purposes. Every young male has
a "favourite cattle" name (next to others). Cows are very important to the Suri - economically, socially,
symbolically - and at times they risk death to protect their herd. Suri men are also judged by how much
cattle they own. Men are not able to marry until they have a sufficient number to start paying the bride-
wealth to the bride's family. Cows are given to his prospective wife's family during and after the initial
wedding ceremony. To praise their cattle or mourn their deaths, the Suri sing songs for them.
Surma (woreda).
Suri woreda is a woreda found in Western Omo Zone, in the South Western Ethiopia Peoples' Regional
state of Ethiopia . It is named for Suri people, whose homeland lies largely in this woreda. Suri woreda is
bordered on the south and west by South Sudan, on the northwest by the Gambela Region dimma
woreda , on the north by Bero woreda, on the east by Maji woreda and on the southern part with the new
pastoral zone south omo Nyagatom woreda . A portion of the Omo National Park extends into the
southern part of this woreda.
The average elevation in this woreda is 2088 meters above sea level.[1] Rivers include the Negi,Koka,
tulge river ,a tributary of the Akobo, which has its origins in this woreda. High points include Mt
shologoy or (Mountain Naita)(2560 meters) on the Ethiopian-South Sudanese border. According to a
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2004 report, Suri woreda had 26 kilometers of dry-weather roads, for an average road density of 5
kilometers per 1000 square kilometers.[2] This lack of roads means remote locations are accessible only
by air. Only recently radio communication lines were made available in this woreda.[3] As of 2008, about
30% of the total population of Suri has no access to drinking water and others social infrastructures .
The three largest ethnic groups reported in 1994 in the Surma woreda were the Suri woreda/Suri people
(93.79%), the Dizi (3.09%), and the Amhara, i.e., northerners (1.71%); others made up 1.41% of the
population. The Suri language was spoken as a first language by 94.02% of the inhabitants; 2.9% spoke
Dizin, and 2.01% spoke Amharic; the remaining 1.07% spoke other primary languages reported.[5]
Concerning education, 43.65% of the population were considered literate; 33.59% of children aged 7–12
were in primary school; 15.31% of the children aged 13–14 were in junior secondary school, and 12.5%
of the inhabitants aged 15–18 were in senior secondary school.[6] Concerning sanitary conditions, about
70% of the urban and 16% of the total had toilet facilities.[7] Based on the (most recent) 2007 Population
Census conducted by the CSA, the woreda had a total population of 24,598, of whom 11,794 were men
and 12,804 women; 914 or 3.72% of its population were 'urban dwellers' (i.e., living in the small towns in
the area. The majority of the inhabitants practice traditional beliefs, with 96.25% of the population
reporting that belief, 1.63% practiced Ethiopian Orthodox Christianity, and 1.59% were Protestants.[8] In
recent years the number of converts to Protestant-Evangelical faiths has increased.
The Suri economy and culture is under threat from outside forces such as the new investment schemes by
the Ethiopian government and some foreign companies, which lead to land confiscations, resource
pressure and the pushing out of the Suri from their traditional alluvial gold panning activities. They are
also more and more forbidden to move around with their livestock and a limit was even imposed on the
size of their cattle herds. One aim of the land alienation since 2010 has been to concentrate Suri together
into new villages and have them give up cattle herding. In a predictable move, the government wants to
make them into easily controllable farmers, settled in one spot, which ignores the potential of this area for
extensive livestock-keeping. This is deeply resented by the Suri as it does not make economic or social
sense to them to live huddled together in villages with no amenities and no room for cattle. They see it
also as humiliating; all the more so because they were not consulted on anything and feel discriminated.
Many violent incidents have already occurred in the area of the plantation. The confiscation of local lands
and the suppression of agro-pastoralism have endangered local systems of food security and group
relations. Suri also see no attractive prospect in becoming low-paid labourers on the new foreign
plantations, as this would make them dependent and marginalized. Like the other local peoples, the Suri
are resilient and not against change, but cooperation in developmental ventures and better groups
relations will only be favoured if overall policies of the administration – and those of ‘donor countries’ -
6
improve substantially.
3. Objective
Objective of the Enterprise is to mine the placer gold in an economically feasible and environmentally
friendly way with local peoples and contribute to the national economy.
4. Previous Geological Studies
More many placers of various genetic types and sizes have been identified by artesian miners and
geologists in around Surma and Dima, Rivers include the Negi,Koka, tulge river ,a tributary of the
Akobo, which has its origins in this woreda including Akobo river valleys, creeks and ravines have
been covered by rather unsystematic and low quality prospecting and exploration. Gold reserves
calculations have been Made for 20 largest placer deposits including Dima ,Koka, and Tirmatid.
General Calculations of reserves for gold Placers in the Bero and Dima were made by Griffith (1968),
John Taylor and Sons Co(1970), Linzel(1972) Shelekhov and others (1982-1985)

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5. Geology of the Project Area
The geology of the area is represented by Precambrian rocks, high grade gneisses and migmatities
and low-grade Meta volcano sedimentary rocks frequently sheared and intruded by mafic-ultramafic
rocks. Quartz veins are widely distributed in the bed rocks. The most parts of the quartz veins are
gold bearing at varying contents of gold.
These auriferous quartz veins are sources of the gold concentrated in the placers. In the regional
geotectonic rocks of the Gambela Dima Group a thick monocline striking in sub merdinal direction.
Detailed geological mapping was conducted at the scale of 1:10,000 and the major lithologic
units observed in the area are:
➢ Biotite Quartz Gneiss
This unit is covers most of the southern part of the area. It is ridge forming rocks in the area along the
valley. It is overlain by basaltic rocks on the top. It is leucocratic and mostly fine grained, with a
subordinate coarse grained variety, having different grain size of the feldspar such as augment shape or
porphyry feldspar. It is often schistose, but also exhibits large scale compositional layering.
➢ Quartz of feldpathic Gneiss
It is mapped in central part of Rivers include the Negi,Koka, tulge river ,a tributary of the Akobo,
which has its origins in this woreda Surma to Akobo valley. It is leucocratic, coarse grained, banded,
and mainly composed of quartz and alkali feldspars with subordinate amounts of biotite and sericite .
Banding is represented by thin mafic layers of biotite and thick felsic layers of quartz and alkali
feldspars. The general strike of this unit is NNW-SSE and dips at angles ranging between 50 and 70.
➢ Quartz Sericite Schist
This rock unit crops out in north-central part of the area. It is pinkish-brown, fine grained, weathered,
kaolinized, ferruginized , and mainly composed of quartz, muscovite, sericite and minor alkali
feldspars. The general strike of this unit is NNW-SSE and dips towards ENE at angles ranging from 45
to 80.
➢ Actinolite Tremolite Schist
This rock unit crops out in north-central part of the area .It is light green and medium to coarse
grained and highly schistose.

8
➢ Amphibole Plagioclase Schist
This rock unit crops out in north-central part of the area. It is dark grey; medium grained, and composed
of plagioclase and amphibole with subordinate amounts of quartz and biotitic.
It is thinly banded, represented by alternative layers of amphibole on the one hand and plagioclase and
quartz on the other hand. The general strike of this unit is NNW-SSE and dips towards ENE at angles
rang1ng from 60 to 70.
➢ Quartz veins
Quartz veins are widely distributed in the bed rocks. The most parts of the quartz veins are gold bearing
at varying contents of gold. These auriferous quartz veins are sources of the gold concentrated in the
placers.

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6. Exploration and Alluvial Deposit Exploration
Thecurrentexplorationworksconductedandthepreviousworkdataenabledto understand that in whole
Suri woreda to valley placer gold occurs in minable grade in terrace and flood plain sediments. The
previous study of the GSE has integrated a number of pitting on Rivers include the Negi,Koka, tulge
river ,a tributary of the Akobo, which has its origins in this woreda .The exploration works
performed comprises pre field previous work data compilation, filed work data collection, data
interpretation, reserve calculation and report writing. Fourth period 1995-2013 AGME is mining in
the remaining lower Bore and area and producing more Or less =than the previous phase-initially,
Artisanal miners were restricted to mine out of areas where hydraulic mining is commenced, Later
artisanal miners were extracting gold from tailings of hydraulic mining and leftover areas in the
same valley
Duringthecurrentexplorationperiodatotalof24explorationpitsweredugin14 profiles and 24 pan
concentrate samples are collected by AGME. Gold grains separated by blowing and binocular
microscope are weighed for reserve calculation. Now a day there was actively artisanal mining
around the area by local enterprise.
The exploration activities and sample locations are indicated in figure 3 below.

10
Figure 4. Exploration Activities by Ethino Gold Mining 1979 to 1981 and Sample Location map of the
project area

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Structures and parameters of the Placer deposit
Gold occurs in alluvial, eluvia, supergene, quartz vein and stock work; shear related and hydrothermal
replacement deposits. In the general sense, alluvial refers to alluvial, colluvium, fluvial and lacustrine
deposits but is restricted to the traditional meaning of stream and lake deposited gold. Alluvial, eluvia
and supergene deposits are secondary deposits formed by reworking of primary deposits.
Economic concentration of placer gold deposit may occur in a wide number of types located in a
variety of geo morphological environments when sufficient quantity of materials from the source area
of some rocks as well as appropriate physiographic (geomorphology) and climatic condition are
provided.
Alluvial deposits consist of hydro dynamically accumulated gold by streams and lakes. They occur on
the surface, just below the surface or deeply buried. Ancient stream channels that are deeply buried
are called deep leads.
Gold and heavy minerals such as magnetite, illuminate, zircons etc. Have high specific gravities;
therefore, they will be transported within the base of flowing currents where they will be trapped by
irregularities in the channel base or changes in current velocity.
In present day channels, the heavy mineral fraction, including gold, will accumulate in pools and in
cavities, fractures, depressions, behind ridges and boulders present in runs between pools.
Gold will also occur in buried channel alluvium below the present river bed. Basal channel
depositswillcontainthemostgoldandrestuponthebedrock.Otherchannelbase deposits can occur between
the surface and bedrock where they are marked by beds of coarse sediments, pebbles and
conglomerates. Gold and heavy minerals will be much finer grained than the light fraction. This is due
to their density and size relationships, expressed as their hydraulic ratio. Consequently, fine gold and
small gold nuggets will be found with coarse sediments, pebbles and conglomerates.
Another area of heavy mineral accumulation is the point bar. A point bar is formed on the inside of a
bend in a meandering stream. Current flow is strongest on the outside of the bend, decreasing inwards.
As a result, heavy minerals will drop out of suspension on the inside of the bend, or point bar, where
current flow is least. As the stream migrates laterally, increasingly finer grained material is deposited
until the channel is finally covered by fine grained alluvium. Stream channels that migrate laterally
form widespread alluvial deposits that may contain gold in the abandoned channel base or point bar.
The major placer characteristics and parameters are described below in details.
over Burden
The Over burden are found on tops of both gentle and steep slopes of Koka Akobo valley. As thick
covers of the soil or the relatively older loose sediments. These comprised of slope- wash and creep
sediments of soil debris and talus formations. The slope-wash deposits are represented by layers of
12
humus soil, dark-brownish clay, reddish brown sandy- clay and light colored clayey-sand in
descending order; it has an average thickness of Av 8 up to 10m.
Gold Bearing Layer
Thealluvialsedimentsofberojebatoakobovalleyareformingterraces.Theseare thought to be channel-fill
and flood plain sediments. They comprised of boulders, cobbles, pebbles and gravels with minor
amount of sands and clays. Quartz boulders, cobbles, pebbles and gravels are more frequent and
predominant than other rocks in channel. The flood plain consists of layers of clay, sand and gravel
going down the section. The sediment is partly supplied from upper level terraces. The sands are
composed by pebbles, gravels and small amount of clay material. In some cases, they rich diameters
up to2-5cm, but as a sale they gravitate towards the border of the basin (Fig. 5). The sands are well
washable with good stripping ratio. It has an average thickness of 0.5 up 1.5m.

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Figure5.Exposure congealment in project Area Table2.Parameters of
the placer

No. Parameters UOM Reserve Kg and

Reserve
1 Average thickness of over burden M 8.57
2 Average thickness of wash gravel M 0.8
3 Gold content g/m3 0.75

4 Gold reserve Kg 60.00

The alluvial comprises slightly clayey and sandy looms with a bout 60%
Gold particle size
percentage
<05mm
74
0.5-2.0mm
20
2.0-4.0mm
6

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 Bed rock Geology
From Koka up to Kurum has incised into Amphibolite, Mica schist and Biotite gneiss in its upper
reaches and into either fresh or weathered basement units in its middle and lower courses. The
basement is represented by quartz feldspathic gneiss, Biotite quartz Gneiss, quartz sericite schist,
actinolitet remolite schist, Amphibole plagioclase schist. The basement rocks strike northerly and dip
at moderate to steep angles towards the north- east. The top parts of the bed rocks are highly
weathered and friable which will be included to the wash part.
Heavy mineral and Morphology of Gold
Based on the mineralogical analysis (Fig. 8), the major heavy minerals found in placers of the
projectareaarepyrite,tourmaline,limonite,Zircon,epidote,garnet,magnetite, spinel, anatase, martite,
rutile, ilmenite and native gold. From this pyrite, magnetite, limonite, ilmenite, martite, tourmaline
and native gold are more abundant while the others are in trace amount.

Figure 6.Separated gold grains with weight

According to the above figures, most of the gold grains are fine grained, although medium to very
coarse-grained gold particles are not uncommon. On the other hand, very fine- grained gold is not
encountered. This might be due to loss of the very fine-grains during panning. During the current
exploration activity similar grain size distribution results are obtained. Generally, gold grains are
rounded to sub-rounded and crystalline.
The crystalline is expressed mostly by octahedral crystal forms. Some of the gold grains have pitted
surfaces. These cavities are filled with iron hydroxides, carbonates and quartz.

15
 Figure7.Rounded to sub rounded and sub angular gold grains from Bero
6.2.5 Fineness of Gold
According to the report of the Geological survey (Teferi and Zhbanov, 1991) gold grain samples were
analyzed by catebax-cameca microprobe to determine the fineness and contents of Ag, Hg, Cu, Sb
and other elements.
The analysis has shown fineness of minimum 820 and maximum of 995 parts per thousand. The
average value for this will be 907.5 parts per thousand which is more or less equivalent to 22 karats.
To check the above fineness, we submitted one sample from the lower course of the valley (L-78) to
GSE laboratory and analysis by XRFEDX 2800 method. The result is 21.84Karat
In general, the gold grains are characterized by high fineness, high Au/Ag ratio and low contents of
silver and mercury. The absence of the other elements rather than silver and mercury suggests that,
the placer deposit occurs in the form of Au-Ag-Hg alloy only.

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7. Reserve of the Deposit
The method used for calculating reserve, volumes and grades of the deposit is the block and average

method. The gold-bearing gravel horizons are outlined using 0.75g/m3content as a lower class limit
Delineation of blocks is to outline the reserve boundaries depend on ethno gold mining Exploration and
determine the payable zone. For this the following information’s are considered: -
✓ Blocking out plans prepared at a scale of 1:5,000.
✓ Cross-sections including the bedrock
✓ Bed rock /exposure/ maps

✓ Catalogues of average data including tentative cut-off grades (0.34gm/m3, by considering

current cost of metal, stripping ratio, cost of overburden, average gold price, fineness and recovery) that
separate payable zone from non- payable one.
✓ Erratic value of gold contents are reduced to average values
✓ 10% reduction is considered for artisanal mining infection
✓ Valley geometry
✓ Data density and consistency of grades along and across the valley
✓ Theexternalboundaryisdrownmidwaybetweenpitswithreserveclassandpitsgold
contents under minable reserve.
✓ The reserve calculation of the block method is done using the information
provided in deposit parameters.
✓ These are Area of block is measured by MapInfo and GIS method from the
blocking out plans
✓ The average wash thickness of the block is taken as the arithmetic mean of each pit
✓ volume of each block is found by multiplying area and average wash thickness of all pits
✓ The total gold content of block is obtained by multiplying the block volume and

average grade (gm/m3) that is the arithmetic mean of gold content in each pit
✓ The total value of many blocks is the sum of values of each block
✓ The average grade of the target area is the total value divided the total volume of
many blocks.
✓ The gold reserves for each block are calculated using the following formula:

17
The volume of gold bearing alluvium in the block is calculated using the following formula:

18
✓ The surface area of the block is determined from the plan map using MapInfo and ARC
GIS. The arithmetic mean of the thickness of the gold bearing gravel layer at various opening within
the block is taken to be the average thickness.
✓ The sum of gold reserves in each block is taken to be the total gold reserve estimate of the
valley under consideration.
Accordingly, based on the outlined criteria’s mentioned above the minable placer deposit in Kurum.
The details for each block are indicated below.
Mineral resources are divided in order of increasing geological confidence into Inferred, Indicated and
measured mineral resources (AGME, 1979-1981).
The data spacing is closely enough to confirm grade continuity. That makes the reserves with
acceptable degree of reliability. Accordingly, the placer deposit in the above mentioned blocks is
classified in the measured category seen as commercial, whose extraction is economically viable.
In general , the Kurum in Suri placer Gold valley has a reserve of 789.8 kg mining and 440.72kg
AGME started to mine and stopping area high quality placer gold in different block now day we

combine all the data in one block. The total minable and detail exploration area is 18.365km2 from

this 2.667km2 for mining and for detail exploration 15.698km 2. Adola gold enterprise already started

to mine on the block one around 1.5km2 area.

In general, the Suri placer Gold valley has a reserve of 55.6 kg mining with high quality (22k) placer
gold in the block.
✓ The Area proposed/planned to mine at Suri Placer Gold Mining is about 100,000m2
Table 2 techno mining special small scale Mining area Gold reserve depend on the perimeters

Area(m2) 2,667,000.00 Total Over burden volume(m3) 21,336,000.00

Over burden Thickness(m)
8 Total wash volume(m3) 2,133,600.00
Mineable Thickness
gravel(m) 0.8 Total Gold Contained 1,600,200.00
Cutting Grade(g/t) 0.75 Artisanal and Others 10% (gm) 160,020.00
Net Gold Contained (gm)
60.00kg

19
8. Mining Resource Evaluations
Suri/Kurum placer gold deposit is calculated the area in one block. In each block the weighted average
grade was calculated from gold bearing (washable) gravels and used as a Tonnage factor to calculate
the total amount of metal contained in blocks. Consequently, the following parameters are defined in
the geological investigation.
✓ Average over burden thickness= 8m
✓ Average mineable gravel thickness=0.80m
✓ Area of the deposit= 2,667,000.00sqm
3
✓ Total over burden volume is 21,336,000.00 m

3
✓ Total wash volume is 2,133,600.00 m but due to artisanal mining factor we

3
estimate av. Gravel gold content1,920,240.00 m

✓ Average grade (tonnage factor) =0.75g/m3

✓ Gold Recovery rate=95%

✓ Gold contained in the deposit60.00kg
✓ Stripping ratio=9
Also the recovery for placer gold due to mining, material handling, processing and artisanal mining
effect is assumed as 10% and considered in reserve calculation.
8.2 Production Plan
Techno mining special small scale gold mining enterprise project has planned to carry out small scale
placer gold mining operation within the life span of five years’ time frame. The total ore to be exploited
3
is 720,790.00 m to gold recovery rate 95% recover 60.00 kg gold considering respective losses
indicated in the previous deposit estimation. For Large Scale and 5 years’ life of the estimated deposit
the annual average gold recovery shall be 12.00kg per year.

In case of the operation efficiency (washing machine capacity of 100m 3/hour), it is assumed that` the
production will commence at 80% capacity utilization rate in the first year, 80% in the second
year,100% in the third year and 80% in four year gold recovery rate. The detailed
Is given in the following table.

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 8.3 Regimen of Work
The techno special small scale gold mining project operation will be performed under the following
regimen of work.
Table3.Regimenofwork

No Activity Description Qty

1 Number of working days per year 300
2 Number of working hours per day 8
3 Number of working hours per shift 8
4 Number of working shifts per day 1

Table 4: Annual production plan

Gold Recovery
NO.Machines

cont. average

Production
Daily wash

Annual
Production

Daily wash
Wash (m3)
Days/Year

(gm)
Machines

Working
Washing

Annual

rate%
1 100 2 80% 1280 300 384,000.00 0.75 0.95 12000.00

2 100 2 80% 1280 300 384,000.00 0.75 0.95 12000.00

3 100 2 100% 1600 300 480,000.00 0.75 0.95 12000.00
4 100 2 90% 1440 300 432,000.00 0.75 0.95 12000.00
5 100 2 70% 1120 300 336,000.00 0.75 0.95 12000.00
Total gold recovery 60.00
Table5: the annual production of the
deposit
Production Year Gold(Kg) Remark

1st 1200

2nd 1200

3rd 1200

4th 1200

21
5th 1200

Sum 60.00

22
 8.4 Mining Operation
8.4.1 Factors to be considered
Design Factors
In order to design any mineral resources, visualization, understand deposit location, and other of deposit
characteristics are required. In case of the present Koka to kurum placer deposit, the depths of
overburden as well as gravel ore considered. Also it is stated in the geological findings that the deposit is
lose gravel covered with 10m alluvial overburden. The gravel ore is consisting of pebbles of well-
rounded quartz and other fragmented rocks pebbles of about 3.5 cm average diameters.
Natural Factors
The natural factors, like; topography, resource position, in 3D etc are obvious influences to which the
design is made to adopt.
✓ Topographic survey output is used as a base for design.
✓ Cross section of exploration interpretations are taken into account for designing.
Cut- off grade
Cut-off grade is used to distinguish between the more payable and less payable sections of ore bodies.
That is calculated as follows considering the average stripping ratio (waste: ore)
From Koka to Kurum is10: 1 and depending on ethino mining enterprise and today market cut of
grade 0.34g/

23
8.4.2 Mining Method
Based on the aforementioned methodology set for Koka to Kurum gold deposit and basic factors, the
specific condition of the deposit has been analyzed.
Accordingly, the formation of this placer gold that covered by 10m unconsolidated alluvial soil over
burden. The placer gold deposit is 1m thick in average and covered by 10m thick overburden below the
surface which makes the stripping ratio almost 10. The total depth of excavation is 10.8 meters.
However, the mining methods will compensate cut and fills which will be described in the methods
description.
Hence, the nature of the deposit favors an open pit (surface) mining commonly known as placer gravel
ore mining technique.
Accordingly, Suri placer gold mining will involve the following activities:
✓ Clearing the site from grass and trees
✓ Construction of access road and drainage ditches.
✓ Construction and developing waste dump yard.
✓ Clearing and removal of overburden (Stripping) and dumping or stockpiling for later use
for correction.
✓ Excavation, pilling, loading and hauling of gravel ore to processing plant;
✓ Plan and forecast reclamation of land damaged by mining.
✓ Indicate and put sketch map of the pit.
8.4.3 Methodology Used for Mine Designing and Planning.
Methodologies to be implemented for designing and planning Koka to Kurum gold are:
1) Evaluations of infrastructural setup understand and organize geological data, assortment
relevant information and understand.
2) Familiarize with the physical condition of the terrain which should be undertaken
through site visiting by mining engineer who shall participates in designing, planning and organize to
exploit Koka to Kurum placer gold.
3) Reviewing and understand placer gold production plan and capacity by the envisaged
placer gold mining project.
4) Plan and set production schedule and ROM for Koka to Kurum placer gold mining.

24
5) Identification of appropriate mine site plan, selection and opening for placer gold
mining. Also identify and locate placer gold processing plant site, office site, camp site, work shop,
access road, waste dump site, etc.
6) Base topographic map identification selection of pertinent mining methods for Koka
placer gold deposit.
7) Application of appropriate mine site designing and set relevant mining system for Koka
placer gold based on geological data and other factors.
8) Set production schedule and determination of respective deposit life span based on the
annual production output, and also set production schedule.
9) Identification of relevant resources machinery, material and work force for respective
activities.

25
 8.4.4 Pit and Bench Design
The key factors involved in designing bench height, slope angle and working berm are:
➢ Geological and hydro geological condition of the deposit
➢ Physical and mechanical property of the gravel ore
➢ Type of machinery to be used like, excavator, loader, dozer etc.)
➢ Required volume of production output.
For shoal kebele to kobo placer deposit the following considerations of deposit conditions has
been taken in to account for pit design.
 The first one is surface situation of the area which is devoid of trees but with small dispersed
shrubs.
 The second consideration is overburden, which is 10m and characterized as loss top soil.
 The third consideration is gravel thickness which1m covered by over burden.
 The fourth consideration is bed rock situation which is weathered diorite ,soft rock and well
separated from gravel ore deposit.
Hydro geological condition is another consideration where the deposit is partially water
logged and partially dry favorable for extraction.

26
Therefore, considering the above mentioned deposit conditions, the following bench design is
recommended. Koka to Kurum to Rivers include the Negi,Koka, tulge river ,a tributary of the Akobob
river placer deposit will be mined by surface mining of laterally advancing vertically descending way.
The first activity will be clearing the site from trees and grass and removing the overburden of 10m till
the exposure of the ore. The second bench is extracting gravel or which will be undertaken throughout
the bench height of 1m using excavator in combination of dozer.
Working and ultimate slope angle of the bench wall is depending on the following factors. These are
geological formation, physico-mechanical property of the gravel ore and compact ability.
Based on these factors the recommendable and appropriate bench slope angle for Ula Ulo to kobo placer
gold mine shall be 80 degrees.
Therefore, the appropriate bench height that manages and enables to achieve the required gravel ore for
placer gold production shall be 1m. Equipment particularly excavator, loader and dozer are the main
machinery that will take part in earth moving works.

Figure8. Top view of Block

27
 8.4.5 Placer Mine Face Opening
From Kurum to kibish placer gold contained ore mine faces hall be opened by excavator in
combination with bulldozer. The location where the mines face start is from downstream against the
flow of the river to secure draining of the water from the waterlogged blocks. In this case mining will
start from the end of block four and advances upstream up to block one.
8.4.6 Placer Mining Sequence
The mining method to exploit Kurum to kibish placer gold contained ore deposit is carried out by
surface mining that undertake in two basic and main sequences.
Preparatory Works
This operation is consisting of access road construction that links the mine site with the processing
plant, mine site with pump station, between camp site and processing plant, clearing works for
campsite, fuel station, generator station, clearing the mine site from trees and vegetation etc. The
auxiliary work is done by heavy duty earth moving machinery in this case bulldozer.
Main Mining Works
Stripping the over burden and stacking at selected site using bulldozer is the first activity to be
carried out.
 Extracting gravel ore by excavator and pilling
 Loading and hauling gravel ore to the placer gold processing plant.
 Back filling and leveling the overburden to the excavation
Pilling of detached ore will be done by bulldozer and excavator or loader in combination. Loading
work is done by excavators and loader on dump trucks for hauling to the processing plant located at
mine site.
Volume of Earth Moving
The volume of earth moving includes removal of the over burden, piling of the detached ore are the
major activities to be carried out. The auxiliary work includes access road construction and clearing
works for, camp site, fuel station, etc. and other unexpected earth moving works which encompasses
3% of the total volume.
Therefore, the major activities lie on the extraction of gravel ore and overburden removal. Also
auxiliary works like internal access road construction, clearing mine site, fuel station and office site
will be included.
These main and auxiliary placer gold contained ore mining jobs will be done by bulldozer. Loading
on the mine site body dump trucks will be done by excavator.

28
Over burden in total 4,267,200.00 m3.
Then, the total earth moving will be calculated according to the following equation.
Vt = vob + vgo + vaw
Where as
Vt – is total volume m3

Vob- volume of over burden m3=4,267,200.00 m3

Vgo-volume of gravel ore m3=426,720.00 m3

Vaw-volume of auxiliary works m3

Thetotalwashvolumeis2,133,600.00m3
Vaw = (vob+vgo)*3%
=(4,693,920.00m3)*0.03 =140,817.60m3

Therefore,
Vt= 4,693,920.00 m3+426,720.00 0m3+140,817.60 m3

Vt=5,261,457.60m3

8.4.7 Mining Equipment

The equipment and machinery required for preparatory work and actual mining activity to exploit
placer gravel ore to guarantee of production plan and remove and process gold the following
machineries are required.

Bulldozer Excavator Washing plant

Load Generator Diese
Dump trucks
Also the number of each machinery and equipment in accordance with the volume of work is
estimated as follows.

Bulldozer: For clearing, earth moving, pilling etc.110m3per hour working capacity of earth Moving
dozer is suggested. If one dozer working for 8 hours per day, 300 working days per year it can handle

264,000m3. However, two dozers are to take part to meet the volume of earth moving which equal

528,000m3.

29
Excavator: Excavator is an other earth moving machine which specifically involved in Gravel ore

extraction and pilling. The excavator suggested for this job is 55m 3hourly capacities. Considering 8

working hours per day and 300 days per year one excavator can handle 132,000m3per year. If two

excavators are implemented, then the volume of earth moving will be 262,000 m3.

30
Loader: One front end loader is to be implemented to feed the washing plant, pile gravel, and load
dump trucks if required.
Dump Truck: Dump trucks for haulage of gravel ore to the washing plant when required and removing
topsoil to stock yard and also to backfill washed gravel to the excavated area two dump trucks are
necessary. Dump trucks for hauling gravel ore to the central washing plant which will be about 200m to
300m distance and to remove top soil to the stock pile two dump trucks are necessary.
8.4.8 Gravel Ore Processing
The gravel ore processing will be carried out by a complete mobile washing plant. Gravel ore is directly
feed to a grizzly hopper where over size materials are screened and rejected and undersize pass to
further process to scrubber and trammel. The process will be continuing in plant for further
disintegration and recovery of gold.
According to the analysis done during geological investigations koka to kurum placer ore is free of
sticky clay which affects wash ability. Also gold grain size contains fine to coarse which should be
considered during washing plant selection.
The alluvial gold deposit will be recovered by wet gravity concentration method. This method requires
water for breaking down and transporting material.
In this process the first step is feeding the ore to the hopper by a loader. The feed hopper is provided
with grizzly for classification by pressurized water.
Disintegration starts at this level and the feed materials are converted to slurry form. This section is also
where the oversize materials, above 50mm (+50mm) diameter are rejected and the under size, less than
50mm will be fed to the washing plant.
The second unit is the washing plant where above 20mm size materials (+20mm) are rejected and
below 20mm (–20mm) with slurry fed to the sluice box.
The third unit is the sluice box receiving the undersize (-20mm). The sluice box is covered by rubber
template and metal riffles to control the flow and facilitate the settlement of gold.
The last step is there-concentration of the concentrate. A rocker will be used to re-
concentrate and realize an effective separation of slime minerals and other impurities from gold.
At the rocker level materials above 10 mm are rejected and receive less than10 mm size (-10mm).
Finally, the materials below-10mm and gold in the concentrate will be separated and treated by wooden
pan (batea). The processing scheme for alluvial gold production, in short, consists of feed hopper with
grizzly, washing plant, sluice box and rocker of appropriate size. The gold production flow chart is
shown in the following diagram (Fig. Residue or tailings after wash will be disposed and areas will be

31
rehabilitated as per the Environmental and Social Impact Assessment (ESIA) program.

32
Figure11.Gold Production Flow Chart

33
Feed Hopper with Grizzly: Accordingly, a washing plant that consisting of feed hopper with grizzly for
separation of oversize boulders. The feed hopper and grizzly unit are equipped with hydro monitor spraying
pressurized water to start disintegration of gravel.
Trommel Scrubber Unit: Ore contained pulp flow to trammel scrubber unit where further disintegration
takes place by sprays of water within the trammel scrubber barrel. The rejected over size materials like gravel
pebbles will be conveyed to discharged by conveyor belt.
Concentrating Jig: Following trammel scrubber processes semi concentrate ore pass to jig concentration
unit. Jig unit concentrate further for recovery of fine grains.
Roughing /Shaking Table: After concentration process at jig unit the pulp ore passes to shaking table where
micro fines will further have concentrated and recovered.
Dewatering Screen for Water Recirculation: This unit is consisting of dewatering screening unit for water
recirculation process. This unit refines water and re circulate in the processing plant. This will help to use
water economically and reduce cost water supply.
Final Gold Separation Room with Finishing Jigs and Shable Tables: This unit is where final gold is
recovered using jig and shaking table. This unit is also consisting of gold smelting room. Generator and
Pump: Generator for power supply and pump to supply water to the washing plant are included in the
processing plant.
PumpandPipes:WaterissuppliedfromwaterdampUlaUlointhelicensearea.The terrain from Ula Ulo mine site
is plain with over all head of about insignificant height.

34
Figure12.Processing scheme for alluvial gold production
9. Marketing Supply of Gold
Gold mine production increased significantly over the1980s and1990s from less than1’300t in 1980 to over
2’500t by 1998.The increase has been fuelled by incremented production from the majority of gold
producing nations, offsetting decreasing production from South Africa. From an industry perspective, gold is
predominantly driven by global jewelry demand. The 2006 consumption was 3’400 t, 1’100 t more than the
mine supply. The difference was made up of scrap supply (1’100 t) and official sector sales (300 t), offset by
producer de-hedging (400 t). Gold touched anall-time high of$1496/ozinApril2011.Today,Chinais the
world's largest gold producer followed by Australia, USA and South Africa and Russia.
The total volume of gold ever mined in history is estimated at some 155,000 t which compares to an annual
production of approx. 2500 tons. The average grade of the mined one is also declining globally. The higher
average mines have been depleted and the market has been forced to turn to mines that deliver a lower grade
of one, which means that the gold exploration expenditure have risen sharply in recent years and today the
gold market rise up in on international market.

35
9.2 Use (demand) for gold
Demand for gold increases through time. The fundamental reasons for the increase of demand for
gold include:
 It is used to make jewelry.
 It is used to enhance risk management and capital preservation for institutional and private investors
across the globe.
 It is used as reserve asset in central banks.
 It is used for technical application.
Jewelry has always been a key area of demand for gold with India and China being the two largest markets
for gold jeweler. Part of the large appetite for jeweler in these countries is driven by the cultural role gold
plays ;it is considered auspicious to buy gold at key festivals and events. In both India and China, gold
jeweler is a desirable possession as well as an investment to be passed down through generations.
This demand currently shows no signs of abating, driven by growing wealth and demographic shifts: by
2020 India and China combined will have one billion new urban consumers. These inspirational populations
in Asia are also experiencing a rise in disposable income, which is driving gold demand. These diverse uses
for gold, in jewelry and technology and by central banks and investors, mean that across the decade’s
different sectors in the gold market have risen in prominence at different points in the global economic cycle.
This self-balancing nature of the gold market means that, typically, there is a sustained base level of demand.
Investment: Gold has unique qualities that enhance risk management and capital preservation for

institutional and private investors across the globe. Research 1 has shown that even a modest allocation to
gold makes a valuable contribution to the performance of a portfolio by protecting against downside risk
without reducing long term returns.
These qualities are considered to be particularly important during periods of financial stress. However, gold's
effectiveness in stabilizing returns and protecting capital is just as relevant regardless of economic
environment.
Today, investment in gold accounts for over one third of global demand. This demand is made up of direct
ownership of bar sand coins, or indirect ownership via exchange-traded funds (ETFs) and similar products.
Central Banks: Central banks’ behavior with respect to gold has fundamentally shifted over the Past few
years.
This reflects a combination of slowing sales from European central banks and large purchases from
36
emerging market countries in Latin America, the Middle East and Asia. Since 2010, central banks have been
net buyers of gold, and their demand has expanded rapidly, growing from less than two per cent of total
world demand in 2010 to over nine per cent in 2012.
This change in behavior is a clear acknowledgement of the benefits that gold can bring to a reserve portfolio.
Some banks have bought gold to diversify their portfolios, especially from US$-denominated assets, with
which gold has a strong negative correlation. Others have bought gold as a hedge against tail risks or
because of its inflation-hedging characteristics (gold has a long history of maintaining its purchasing power).
Gold plays a prominent role in reserve asset management, as it is one of the few assets that is universally
permitted by the investment guidelines of the world’s central banks. This is in part due to the gold market
being deep and liquid, which is a key characteristic required by reserve asset managers.
Technology: Around seven per cent of the world demand for gold is for technical applications. The
electronics industry accounts for the majority of this, where gold’s conductivity and resistance to corrosion
make it the material of choice for manufacturers of high-specification components.
In addition, the metal’s excellent biocompatibility means that it continues to be used in dentistry. Beyond
electronics and dentistry, gold is used across a variety of high-technology industries, in complex and difficult
environments, including the space industry and in fuel cells. Gold’s catalytic properties are also beginning to
create demand both within the automotive sector, as the metal has now been proven to be a commercially
viable alternative to other materials in catalytic converters, and within the chemical industry.
A range of health care and catalytic applications for gold is currently being developed as the field of
nanotechnology expands. While this demand is still small in tonnage terms, the growing number of patents
being published relating to gold nanotechnology suggests many new applications will be developed in the
coming years.
9.3 Market Segmentation
As discussed earlier one of the main reasons for the increase in demand of the gold was its usage.
By countries central banks’ as a reserve.
The central banks behavior with respect to gold has fundamentally shifted over the past few years. Since
2010, central banks have been net buyers of gold, and their demand has expanded rapidly, growing from less
than two per cent of total world demand in 2010 to over nine per cent in 2012.
Gold plays a prominent role in reserve asset management, as it is one of the few assets that is universally
permitted by the investment guidelines of the world’s central banks. This is in part due to the gold market

37
being deep and liquid, which is a key characteristic required by reserve asset managers. therefore, to keep the
sustainable development of the country, the National Bank of Ethiopia similar to the other countries central
banks developed keen interest to purchase gold to build its reserve portfolio. In relation to that, the
government encourages investors to involve in gold mining in the country.
As a result , the target market to sell the gold is well known i.e. the National Bank of Ethiopia. There is no
marketing problem because all products will be sold to the Bank.
9.4 Pricing
According to the ministry of mines (mom), Ethiopia has earned 800 million us dollars from export of
minerals during the past 4 months of the budget year, 2016 e.c. plagued by a fall in the global price of gold,
the revenue obtained is just about half of the ministry’s projection for the period.
The lion’s share of the revenue is obtained from export of gold extracted by both traditional miners and
companies. Of the over 1200 kg of gold supplied to the international market, over came from traditional
miners, according to data from Mom. Export of minerals has become Ethiopia’s second biggest foreign
currency earner contributing to over 23 percent of the overall export earnings of the country.
However, global price fluctuations have put a dent on the flow of foreign currency to
thecountry.Thepriceofgold,themajorexportmineralofEthiopia,droppednearly30 percent at the end of 2013.
With its revised export revenue target, the ministry expects to fetch one billion dollars from mineral exports
by the end of the current fiscal year.
To counter the impact of a fall in global price, the report says, the ministry would work to ensure an increase
in supply of gold by artisanal miners and export value added minerals.

Table6:Sales Forecast
Applicable as of January28,2025

38
Gold Unit Gold Rate in Ethiopian Birr
Gram 24K 5,881.9 ETB
Gram 23K 5,761.8 ETB
Gram 22K 5,641.8 ETB
Gram 21K 5,521.7 ETB
Gram 18K 5,161.4 ETB
Gram 16K 4,921.3 ETB
Gram 14K 4,681.1 ETB
Gram 12K 3,441.0 ETB
Gram 10K 3,200.8 ETB
Gram 9K 3,080.7 ETB
Gram 8K 360.6 ETB

39
 Year 1 2 3 4 5 Total
Gold In Kg 273.6 273.6 342 307.8 239.4 55
Price/gmasofJanuary28/2022 2641.8 2641.8 2641.8 2641.8 2641.8 4850
(22karat) in ETB
Sale Price In Million 722.79648 722.7964 903.49 813.146 632.44692 26675000
Birr(*1,000,000) 8 6 0

Table7. Gold price Applicable on:2024-april-26

9.5 Sales Strategy and Sales Forecast
The whole product will be sold to the National Bank of Ethiopia. The expected minable gold reserve will be
around1436.4 kg. The laboratory test shows that the gold purity level was around 22Karat.Therefore, taking
the price of gold for 22 Karat 266,750,000.00Birr
10. Resource Requirements
The resource requirements for the project includes: machinery and equipment, manpower, land
compensation, building and civil works; office equipment, utilities and others are presented in details in the
following sections.
10.1 Pre-production cost
Table8. Pre-production Costs and Expenses

S.№ Item Birr Remark

1 Establishment, Registration, Licensing, and Legal Fees 100,000.00
2 Prefeasibility and Feasibility Studies Fee 100,000.00
3 Property Right Compensation 5,000,000.00
5 Other cost 880,000.00
Total pre-production Expense 6080000

40
 10.3 Equipment and Machinery
The equipment’s and machineries considered in this report are those to be used for the placer gold Mining
Plant and processing operations. The estimated costs of these equipment and machineries are based on their
current local price in local currency as shown below in table Office equipment and furniture are required for
supporting staff at the branch offices. The furniture and equipment required for the project are those such as
office tables, filing cabinet, shelves, chairs, computers, printers and duplication machines, calculators and
etc.
Table10.Machinery and equipment requirement

No Equipment Description Qty Unit Price Total Price Supplier

1 Bulldozer (D8R) 1 24,000,000 4,000,000.00
2 Excavator (CAT) 1 13,000,000 3,000,000.00
3 Dump Trucks-20tons 2 3,000,000 1,000,000.00
4 Camping equipment 585,000
5 Other equipment (Hand tools) Set - 100,000
6 Water tanker 5000 Liter 1 30,000 30,000.00
7 Water pump (300hp) 2 600,000 1,200,000
Total Machinery and equipment cost 9,915,000
10.4 Camping Equipment
The camping and kitchen equipment required at the camp site is shown on the following table.
Table11.Camping, Professional, and Kitchen Equipment Requirement

Unit Total
S/n Item Quantity Price(birr) Price(birr)
1 Cooking oven 1 30,000 30,000
2 Dishes and cookware set 1 75,000 75,000
3 Refrigerator 2 20,000 40,000
4 Kitchen cabinet set 1 50,000 50,000
5 Washing machine 2 10,000 20,000
6 Dining table 2 5,000 10,000
7 Chairs 30 1,000 30,000
8 Beds 50 2,000 100,000
9 Bed set (blanket, linen and pillow 50 3,000 150,000
10 Generator for camp /50kw 1 100,000 100,000
Subtotal 605,000.00

10.5 Total Fixed Capital

Table13.Summary of fixed capital cost

S/ Description Investment Cost

no In birr
1 Machinery and equipment requirement 0
2 Camping, professional ,and kitchen equipment requirement 605,000.00
3 Office furniture and equipment’s 605000
Total capital cost 9,915,000
Working capital 2,628,858
Total fixed cost 12543858
 10.6 Manpower
The allocation of manpower requirement for the project under consideration is based on the type and quantity
of equipment’s and machineries to be deployed for the quarrying, loading, hauling and for other supporting
staffs. Accordingly, the total manpower requirement of this project is estimated at 44 (24 permanent & 20
daily laborers) .the details are as shown below in table below.
10.6.1 Salary, wage and employee benefit.
This includes salary and wages as well as benefits of permanent employee, contractual workers and daily
laborers.
 Monthly Total Totalannual
No. Title Quantity Salary In Monthly Salary
birr Salary birr (In birr)
A. Indirect labor
1 General Manager 1 25,000.00 25,000.00 300,000.00
2 Fiancé and administration 1 15,000.00 15,000.00 180,000.00
manager
3 Secretary 1 6,000.00 6,000.00 72,000.00
4 Accountant 1 10,000.00 10,000.00 120,000.00
5 Cashier 1 8,000.00 8,000.00 96,000.00
6 Storekeeper 1 10,000.00 10,000.00 120,000.00
7 Security/guards 4 2000.00 2000.00 24,000.00
8 Light vehicles diver 2 4000.00 8000.00 96,000.00
9 Heavy truck drivers 2 7,000.00 14,000.00 168,000.00
10 Cooker 2 5,000.00 10,000.00 120,000.00
Subtotal 16 108,000.00 34000
B)Direct labor
1 Mining engineer 1 20,000.00 20,000.00 240,000.00
2 Site geologist 1 20,000.00 20,000.00 240,000.00
3 Mining Forman 1 14,000.00 14,000.00 168,000.00
5 Excavator and loader 2 9,000.00 18,000.00 216000.00
operator
6 Generator operator 1 7000.00 7000.00 84,000.00
7 General mechanic 1 15,000.00 15,000.00 180,000.00
8 Welder and electrician 1 10,000.00 10,000.00 120,000.00
9 Daily labor 20 6000 6000 72,000.00
Subtotal 28 110,000.00 6000.00
Employee benefits 25% 54,500.00 654,000.00
Total cost 272,500 3,270,000.00
Table14.Manpower requirements
11. Project management
The projects management will consist of individuals who have extensive experience in the mining industry.
Our company philosophy is based on mutual respect for all contributions made by our participating or
limited partners, investors, consultants, and employees without regard to the position held in the company.
We will also work toward establishing community involvement program that will demonstrate how our
business can contribute to a better quality of community life.
The organizational chart of the company is presented in figure 13.below.
11.1 Organizational structure
 11.2 Fuel, Oil and Lubricant
Fuel consumption is computed considering the consumption per hour by each machinery and time of
working and calculated as follows. Lubricant is taken as 15% of fuel cost.
Table15.Fueland lubricant

No Machine Qty Consumption Working Annual Price Total Price

Description (lit/hour hours Per consumption Birr/lit (Birr)
year (liter)
1 Excavator cat 1 12 2400 28,800.00 40 1,152,000.00
2 Loader 1 13 2400 31,200.00 40 1,248,000.00
950h/962H
3 Bulldozer d8r 1 16 2400 38,400.00 40 1,536,000.00
4 Dump trucks, 2 6 2400 28,800.00 40 1,152,000.00
20ton
5 Dump 1 8 2400 19,200.00 40 768,000.00
trucks,40ton
6 Water pump 2 3 2400 14,400.00 40 576,000.00
7 Service bus 1 2 2400 4,800.00 40 192,000.00
Land Cruiser
8 double Cabin 1 2.5 2400 6,000.00 40 240,000.00
9 Generator 1 2 2400 4,800.00 40 192,000.00
10 Pickup 2 2 2400 9,600.00 40 384,000.00
TOTAL 7,440,000
Lubricant15%offuel 1,116,000
GRANDTOTAL 8,556,000
Figure13.Organizational chart of the company
 11.3 Maintenance and Repair Expense
Machinery, building and office equipment maintenance and repair expense is estimated at
0.5%ofestimatedcostmachinery,building and office equipment and furniture per annum and the result is
presented in following Table.
Table16.Annual Repair and maintenance Expense (Birr)

No Description Estimated cost

(Birr) 3%,Annualrepairandmaintenanc
e
1 Building and civil work 4,700,000 141,000.00
2 Machinery and equipment requirement 4700000 4,071,472.5
3 Camping, professional, and kitchen
equipment requirement 605,000.00 18,150.00
4 Office furniture and equipment’s 210,900 6,327.00
Total 210900 4236949.5

11.4 Insurance Expense

Insuranceexpenseisnecessarytoavoidrisksinoperationoftheminingactivities.Accordingly, issuance expense is
estimated at 4% of Fixed Capital cost per annum that is. Calculated to be birr 5,649,266
11.5 Utilities Expense
Utility expense such for water, communication and electricity is necessary for the day-to-day operation of the
mining activities. Accordingly, the following amount of annual expense is considered.
Water and power supply Requirement
❖ Power supply
Around the project area there is no hydroelectric power supply. The only alternative of having power is
from diesel generator.
❖ Water supply

In Akobo River and other streams even during the dry season there will have adequate water supplies?
Table17.Annual Utility expense (Birr)

Description Annual expense (Birr)

Water 70,000
Communication 200,000
Electricity 300,000
Total 570000

11.6 SPARE PARTS

Spare parts are the most fast moving items and should be well planned in order to avoid down time. The cost
of spare parts is estimated as 1% Fixed Capital cost. The cost for placer gold mining equipment and
machinery is Birr 1,412,316.5.
11.7 Other expense cost
Table18.othercost

S. no Description Cost Remark

1 Training 200,000.00
2 Environmental Reclamation 200,000.00
3 Occupational Safety equipment 100,000.00
4 Food allowance 792,000 1500 birr/ month/
5 Communication & Stationery 100,000.00
6 Legal and professional charges 100,000.00
7 Entertainment 500,000.00
8 Clothing and Uniform 100,000.00
9 Medical Expense 163,500.00 5%ofSalaries
10 Travel Expense 65,400.00 2%ofSalaries
11 MiscellaneousExpense 500,000.00
Sub Total 2320900

11.8 Summary of Operating

Table19.2Summary of Operating Cost (Birr)

S/ No Description Amount(Birr)
Remark
1 Salary and benefit 3,270,000.00
2 Fuel and Lubricant 8,556,000
3 Annual Repair and maintenance Expense 11826000
4 Insurance 5,649,266
5 Utilities 29301266
6 Spare parts 1,412,316.5
7 Other expense cost 2,820,900
Total Summary of Operating Cost
33,534,482.5

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11.9 Working capital (WC) Requirement
Working capital is a component of initial investment. It is the amount of money required to fund the
operating expenses until sales revenue from gold will be available. Working capital requirements have been
computed keeping in mind the average storage requirements, the lead time and purchase volume.
Based on this the working capital requirement is calculated for three month’s expense of fuel and lubricants,
salary and wages, utility, Insurance, maintenance and spare parts.
Table 3 Working capital requirement (Birr)

S/No Description Three month’s(Birr)

1 Salary and benefit 817,500.00
2 Fuel and Lubricant 2,139,000.00
3 Annual Repair and maintenance Expense 1,059,237.38

4 Insurance 1,412,316.50
5 Utilities 142,500.00
6 Spare parts 353,079.13
7 Other expense cost 705,225.00
Total working capital Cost 6,628,858.00

12. Project fund/source of capital

As shown above, the fixed investment cost of the envisaged project is estimated at birr 147,860,508 70% of
this expenditure or birr 103,502,355.6 about is expected to be obtained from bank loan, whereas the
remaining 30% or birr 44,358,152.4 will be covered from equity fund of shareholders contribution.

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12.1 Loan repayment schedule
On obtaining bank loan, all of its balance is expected to be paid back in 5 years period as per the
following repayment schedule:
Table. 20.Loan repayment schedule
Pmt Beginning BalanceScheduled Payment Principal Interest Ending Balance Cumulative
. Interest
No.
1 103,502,355.60 31,610,590.42 15,050,213.52 16,560,376.90 88,452,142.08 16,560,376.90

2 88,452,142.08 31,610,590.42 17,458,247.69 14,152,342.73 70,993,894.39 30,712,719.63

3 70,993,894.39 31,610,590.42 20,251,567.3 11,359,023.120 50,742,327.07 42,071,742.73

4 50,742,327.07 31,610,590.42 23,491,818.09 8,118,772.33 27,250,508.98 50,190,515.06
5 27,250,508.98 31,610,590.42 22,890,427.55 4,360,081.44 - 54,550,596.50

13. Project mile stones

Listed the major project mile stones. It includes:

➢ Fulfilling required manpower, machinery and equipment purchase

➢ Site preparation and construction
➢ Mobilization and installation of machineries and equipment
➢ Trial production
➢ Full scale production
➢ Mine closure and site rehabilitation, and
➢ Demobilization

Table 21.timetable for the first project year

52
S.№ Activities/Month 1 2 3 4 5 6
1 Fulfilling required man power

2 Machinery and equipment purchase

3 Site preparation and construction

4 Mobilization and installation of

machineries and equipment

5 Trial production

6 Full scale Production

53
14. Financial evaluation of the project
14.1 Basic assumptions and conditions
Detail estimates of operating and fixed capital investment costs are worked out on the basis of other
companies of similar nature and experiences and from price quotations given from suppliers/ dealers. The
estimated costs are then projected with the understanding that they will be subjected to updating if the need
arises from time to time. Hence, the financial analysis of the project is worked out under the following
assumptions:-
➢ The exploration activity of gold has been come up with commercial reserve from the license area.
This has been confirmed by the geological study.
➢ Productionperiodassumestobe5years.
➢ The financing of the project is 70% from Bank loan at 16% interest rate; and 30%from equity.
➢ The tax, royalty and other similar points considered in the analysis are based on the Mining
Laws and Regulations of Ethiopia.
➢ Royalty is taken at 7% of gross revenue while income tax is calculated at 25% of Net profit before
tax, 5% equity participation on after tax profit and community development 2%.

54
 14.2 Projected financial statements
Table 22. Profit and loss statement

Year U 1 2 3 4 5

G old Production G 273,600.00 273,600.00 342,000.00 307,800.00 239,4

0
0.
0
0
Selling price B 2641.8 2641.8 2641.8 2641.8 2641.8

Value(gross revenue) B 722,796,480 722,796,480 903,495,600 813,146,040 632,446,920

Royalty 7% 50,595,754 50,595,754 63,244,692 56,920,223 44,271,284

Net revenue B 672,200,726 672,200,726 840,250,908 756,225,817 588,175,636

Operating cost B 21,212,346 21,212,346 26,515,432 23,863,889 18,560,802

Salary and benefit B 2,616,000.00 2,616,000.00 3,270,000.00 2,943,000.00 2,289

,
0
0
0
.
0
55
 0
Fuel and Lubricant B 6,844,800 6,844,800 8,556,000 7,700,400 5,989,200

Annual Repair and maintenance B 3,389,559.60 3,389,559.60 4,236,949.50 3,813,254.55 2,965

Expense ,
8
6
4
.
6
5
Insurance B 4,519,413 4,519,413 5,649,266 5,084,339 3,954,486

Utilities B 456,000 456,000 570,000 513,000 399,000

Spare parts B 1,129,853.20 1,129,853.20 1,412,316.50 1,271,084.85 988,621.55

Other expense cost B 2,256,720 2,256,720 2,820,900 2,538,810 1,974,630

Depreciation B 36,827,913 36,827,913 36,827,913 36,827,913

Building and civil work B 1,175,000 1,175,000 1,175,000 1,175,000

Machinery and equipment B 33,928,938 33,928,938 33,928,938 33,928,938

requirement

56
Camping, professional, and B 151,250.00 151,250.00 151,250.00 151,250.00
kitchen

57
equipment requirement

Office furniture and equipment’s Birr 52,725 52,725 52,725 52,725

Preproduction Cost Birr 1,520,000 1,520,000 1,520,000 1,520,000

Interest Birr 16,560,377 14,152,343 11,359,023 8,118,772 4,360,081

Profit before tax Birr 597,600,091 600,008,126 765,548,540 687,415,244 565,254,752

Income Tax 25% 149,400,023 150,002,031 191,387,135 171,853,811 141,313,688

Profit After Tax Birr 448,200,069 450,006,094 574,161,405 515,561,433 423,941,064

Community development 2% 89,640 90,001 114,832 103,112 84,788

Gov’t free equity(Birr) 5% 22,410,003 22,500,305 28,708,070 25,778,072 21,197,053

Retained earning Birr 425,700,425 427,415,788 545,338,503 489,680,249 402,659,222

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 14.3 cash flow forecast
Table 23.cashflow forecast
Year 0 1 2 3 4 5
Initial Investment -141,231,650
working capital -6,628,858
Retained earning 425,700,425.1 427,415,788.2 545,338,502.8 489,680,248.8 402,659,222.4

Add back dep. 36,827,913 36,827,913 36,827,913 36,827,913

Working capital recovery 6,628,858

Net cash flow -147,860,508.00 462,528,337.61 464,243,700.75 582,166,415.3 526,508,161.3 409,288,080.42

Discount Factor (25%) 1.00000 0.80000 0.64000 0.51200 0.40960 0.32768

DCF -147,860,508.00 370,022,670.09 297,115,968.48 298,069,204. 215,657,742.9 134,115,518.19

Cumulative DCF -147,860,508.00 222,162,162.09 519,278,130.57 817,347,335.2 1,033,005,078.0 1,167,120,596.22
NPV@25% 1,167,120,596.22
IRR 233%
Pay back period analysis 1

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 14.4 Net Present Value(NPV)
The cash flow analysis has been conducted for the project and accordingly the net present value (NPV) of
the project at 25% discount rate is Birr 800 million. This is indicating the viability of the project to invest.
14.5 Internal Rate of Return(IRR)
Financial computation has also been made for internal rate of return (IRR) of the project. And accordingly
the IRR of the project is computed to be 233%; which is greater than the discount rate and Bank interest
rate. This is also revealing the viability of the project to invest.
14.6 Pay Back Period
Based on the cash flow model of the project, the payback period of the project is computed to be 1 year.
This is considered as a short period of time to return back the investment from the point of view of mining
investment project; as the mining investment is a risky investment.
14.7 Profit and Loss Statement
The profit and loss statement of the project has been conducted and the result is presented with the help of
Table 24. Based on the table, and given the generic assumptions of the project, the project would be profitable
and paying tax to the Government commencing the initial year of production. Accordingly, the average profit
before tax from the project is estimated to be Birr 643.1 million ,and average profit after tax would be Birr
482.3 million. Similarly, average tax for the Government is estimated to be Birr 160.7 million.
14.8 Breakeven period
Breakeven period of the project (as it is depicted in the following figure)is near year 2.

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 DCF

DCF

14.9 Scenario Analysis

Scenario Analysis is a process to ascertain and analyses possible events that can take place in the future. It is
used extensively to make forecasting and projections for the future for analyzing possible future events.
Scenario analysis involves constructing or developing scenarios and integrating the content of scenarios into
decision-making.
It is also a what-if analysis in which a model's output (NPV, IRR and PBP) is calculated for a number of
scenarios. It is most commonly used to estimate the expected value of an investment in a number of
situations (such as best case scenario, base case scenario and worst case scenario).
Scenario analysis is carried to determine how much risk is taken before an investment is made. Therefore,
many scenarios analyses account for worst-case scenarios, along with more positive and optimistic
scenarios.
For the proposed project the base case interest rate is 25%, NPV is Birr 1.1 billion, IRR is 233% and PBP is
1 years.

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Table24;Scenario analysis

Worst case scenario base case Best case scenario

Price decrease by 20% Price increase by10%
Operating cost increase by 25% Operating cost decreaseby15%

Result
NP 8.56 million Million 13 million
V
IRR 80% 33% 60%
PBP 1.5 years 1 years 0.5 years

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The best-case scenario shows that a decline in capital investment and operating cost, while increase in
price from the base case significantly enhances the viability of the proposed project – NPV and IRR
increased while PBP reduced to a small number of years. This scenario showed the project reduces the
risk by generating a high return and recovering the initial investment in a short period of time. The
reverse is true for the worst-case scenario.
For the best-case scenario, the net present value is 248.7 million while for the worst case scenario; the
net present value is 124.6 million. The scenario analysis shows that the projected economic indicators
are estimated with a reasonable level of accuracy and justify the profitability and acceptance of the
proposed project.
15. Water and Power Supply Requirement
15.1 Power supply
Kurum Kebele is in Suri woreda the project gold mining site there is hydroelectric power supply but
the power line broken. The only alternative of having power is from diesel generator for campy and
washing machine.
15.2 Water supply
Before 2016 Ethno Gold mining made the water line from Rivers include the Negi,Koka, tulge river ,a
tributary of the Akobo River besides of Kurum Kebele. From past experience of placer gold processing
by washing plant with sluice box the gravel to water ratio is 1:6 but our Machine requires water supply
of approx. 2000 liters/minute or 120m3/hour (500 gallons/minute) at
apressureofapproximately310kPa(45psi).Any electrical, petrol or diesel powered pump capable of
providing this water flow may be used. The Water Supply must be connected via a 6” hose (“lay-flat” or
discharge hose) clamped onto the inlet nipple on the Water Manifold. Note: Water Pump and
connection hose are not supplied with the CS-120.

The total volume of wash materials in project place gold project is 19,580,000m 3 and if the washing

machine works at its full capacity it wash 1958000m 3wash material per year, therefore, about979,000m3

and 11,748,000m3of water is required monthly and annually, respectively around the area the company
cannot get this amount of water capacity to supply this amount of water continuously but we make the
dam and use water recycle system.

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16. CONCLUSIONS
This placer gold mining feasibility study is formulated and developed in cognizance of Suri Special
small scale gold mining Enterprise. Vision to be a major producer of marketable gold in the country,
and in compliance with the Ministry of Mines guidelines.
Clearly, the geology of the area is favorable for placer gold deposition. Previous and current studies of
resource estimation pointed that has substantial deposit on ground and can sustain the proposed annual
gold production of one thousand four hundred thirty six (43.4) kg or an aggregate total of 37 million birr
for five (5) years of gold mine operation.
In the next five(5) years operations shall concentrate on stripping and extraction activities for the
identified shallow gold reserves for surface mining while planning and engineering shall be conducted
for possible open pit mining in the future. Road systems shall be re- established, improved and/or added
linking the mining area with the company’s designated placer. Construction of additional needed
infrastructures and facilities such as laboratory will be done as needed. Stakeholders will be encouraged
in participating the company’s endeavors to foster harmonious relationships beneficial to all.
The surface mining method approach shall be open cast and/or strip mining through the use of
conventional earth-moving machineries such as dozer, excavator, loader, and dump-truck. The over-all
project activities are expected to have minimal negative impact on the immediate environment. The area
is generally characterized by secondary forest growth with portions overlain by grass lands and
cultivation. With systematic and well-controlled mining and gold washing operations, the impact of
waste disposal, pollution and deterioration of river quality will be minimal. For the stripped areas, the
company as a matter of policy is committed to immediately rehabilitate and reforest these areas. The
area, may, in the long term be better-off in terms of forest cover and vegetation as a result of the
rehabilitation and reforestation programs that will be implemented by the company.
For this placer Gold mining activity OMSC estimates to realize the following:

To spend a total of Investment - ETB 7,860,508.00

To have a gross sale gold - ETB 94,681,520
To pay to the government - ETB 356,688.18
To pay a royalty s hare - ETB 65,627,706.40
To have a net income of _ ETB 2,90,794,187.29
The Financial study made shows that the project is financially profitable throughout the project life
indicating that there will be a net profit of Birr 425.7 million in the first year and Birr 30.6 million in the
Five year.

49
17. Environmental Consideration
This mining license involves excavation of large surface area which affects greatly the environment.
During mining work we will adhere to the minimum not to disturb the environment in order to achieve a
maximum desired result. Open pit mining design for obtaining appropriate ore mining should be sited
where practicable in consultation with the owner of the land. Indigenous vegetation within the site will
be retained as far as practical. Any excavation at termination of work will be back filled according to
the prescribed standard
i.e. with rocky soil first, followed by soil and a final layer of topsoil to a level above the surrounding
ground.
A budget will be assigned for environmental assessment and mitigation when the condition is required
by the nature of operation and closure. The closure plan that will be prepared will include all standards
of rehabilitation and reclamation to revive the mine locations to acceptable conditions.
18.1Social Responsibilities
Environmental sector stake a high state of social issues during and after the mine life cycle in the area.
Further more, it will assign a budget to promote education, health and quality of life in the area. This
will benefit communities within the area. The mining operation creates a job opportunity for local
people. This is a good contribution considering the huge unemployment rate prevailing in the regional.
In addition, it will increase the gold reserve of the national bank of Ethiopia, which will increase the
capacity of the country in international marketing operation. Apart from these, the company will pay
tax, Royalty and land leasing.

50
18. References

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