Web Gemstone Mining plc (Emerald)

Gemfields owns 75% of Web Gemstone Mining plc (“WGM”), a company that holds a 200-square-kilometre emerald exploration licence in southern Ethiopia. Exploration activity began in June 2015 in an area to the north of the licence, called the Dogogo Block. The area was selected based on favourable geological settings and evidence of past artisanal activity. 

For more information on Gemfields, please visit: www.gemfields.com

Exploratory work and analysis

The exploration work conducted in the Dogogo South Block consisted of a geological mapping exercise, followed by a trenching and exploratory pitting exercise. These exercises confirmed the existence of reaction zones between pegmatites and talc-mica schists, with the occurrence of beryl also recorded in some locations. These exercises were followed by an exploratory diamond core drilling programme to confirm the depth continuity of potential reaction zones to 50 metres’ vertical depth, which was completed in December 2016. A total of 3,538 metres was drilled in 45 drill holes along eleven section lines.  Reaction zones were visually observed in all sections, and a level plan at 1300 mRL (about 25 metres below surface level) confirmed the presence of three sets of pegmatitic bodies.

A section by section geochemical analysis exercise for a suite of elements was carried out on the drilled core samples using a handheld X-Ray Fluorescence (“XRF”) instrument. The transverse sections were updated based on the drilled core logs and analytical results. A total of 308 core samples from 45 drilled holes were analysed by laboratory procedure at ALS Global in Ireland. The ALS Global analysis clearly shows a general agreement with the in-house XRF analysis exercise.

ACA Howe UK was engaged to provide an assessment of exploration carried out, an appraisal of the project potential and to provide recommendations for further work. ACA Howe consider that the exploration completed by WGM has been successful in identifying a favourable geological setting for a “Schist-hosted” type deposit, formed by an intrusion of pegmatites into a steeply dipping sequence of biotite-chlorite and talc-mica schists, similar to the geology at Kagem mine in Zambia. ACA Howe agree that a programme of bulk sampling is required prior to further surface exploration and core drilling in order to provide valuable insight on the presence of commercial sized emeralds, their distribution and quality.

Bulk sampling phase

Due to the encouraging results of the exploration programme, a bulk sampling exercise was initiated in early August 2017 in the Dogogo South Block to further advance understanding of the ore grade and value, and to determine the economic viability of the deposit in the process. Phase 1 has a rock handling target of 1.2 million tons over two years – 600k tons per year using two excavators. The objective of the exercise is to confirm the depth continuity of mineralization up to 1300 mRL, approximately 25 metres below the surface. Drilling & blasting is also required due to the terrain conditions. Blast-hole drilling commenced in mid-September 2017, and the first blast was successfully taken on 14 October 2017. The excavation strategy was revised based on the findings of the first month of excavation, and now focuses on the area along the strike, measuring 120 metres in length by 35 metres wide, covering part of existing artisanal pits. Multiple bands of pegmatite and reaction zone have been encountered and mapped during the bulk sampling exercise, confirming the results of the exploratory drilling exercise.

Gemmy-quality beryl and low-quality crystalline emerald have been recovered in encouraging quantities during the bulk sampling exercise since the first blast was taken in October 2017. These discoveries support all previous exploration work and provide important geological information that is helpful in guiding the ongoing operations. These findings are encouraging, and more exploration work (particularly bulk sampling) is required to accumulate data of sufficient quantity and quality to be used for resource estimation and thus determine the economic viability of the project.

Update on operations

On 29 June 2018, a protest organised by local youth groups at the Dogogo South bulk sampling block escalated into a violent mob of circa 500 people. The mob attacked company staff and assets and completely overran the operations area, offices and campsites, resulting in the complete evacuation of the project area. Two of WGM’s employees were injured in the assault. WGM has not been able to access the license area since, but the company has received multiple reports that sensitive areas, such as the ore stockpile, the sort house and the bulk sampling pit, are still occupied by a large and uncontrolled number of people. All emerald, beryl, ore, geological samples and data produced over the course of the project were stored at these locations. On 31 July 2018, an armed mob attacked and breached the sort house and strong room, and looted all emerald stock stored within. The mob subsequently ransacked the campsites, offices and operations areas, destroying or looting all equipment and property that remained on site.

As a result of the aggression against WGM, the team has been reduced to a skeleton crew whilst WGM and Gemfields engage with the authorities and local communities in an effort to resume operations, however success is not certain and such efforts are anticipated to take a number of months to conclude.

Regardless of these setbacks, the company remains committed to the sustainable development of the license area and to working with the authorities and local communities to achieve a commercially viable long-term project.

The below images go some way to highlight the ‘before’ and ‘after’ (mob overrun) state of the operations in Ethiopia.

 

Investment

Gemfields, through WGM, has invested almost US$6 million into the project since 2015, including US$200,000 in goodwill community projects despite the project being in exploration phase, including upgrades to 16 kilometres of road between Web and Dubuluk, drought support to pastoralists, and water supply, etc.

Stakeholder developments

A delegation from the Ethiopian Ministry of Mining visited the Kagem mine in Zambia and the emerald auction in Lusaka in October 2017, which improved their understanding of the emerald mining process and of Gemfields’ marketing and auction platform.

Further exploration

Preliminary exploration activities have been initiated in a number of other blocks within the licence area, including a trenching exercise in the Karlo Kora Block, in which reaction zones and beryl samples were recorded. WGM successfully renewed its exploration licence for a further year to 31 December 2018 over the entire licence area and the company intends to convert to a mining licence by end of this year.

Related News and Announcements

Update: Gemfields’ Ethiopia Operations

//
Comment0
Gemfields previously advised that the emerald bulk‐sampling operations of Web Gemstone Mining plc (“WGM”), an Ethiopian company in which Gemfields holds a 75% interest, were overrun by a mob (estimated at between 300 and 500 persons) on 29 June 2018. WGM’s employees, contractors and service providers were safely evacuated on the same day, with two members of the WGM team suffering minor injuries at the hands of the mob, both of whom have since made full recoveries.

Gemfields’ Ethiopia Operations Overrun

//
Comment0
Gemfields regrets to advise that on Friday 29th June 2018, a mob estimated at between 300 and 500 persons overran the operations of Web Gemstone Mining plc (“WGM”), an Ethiopian company in which Gemfields holds a 75% interest. The remaining 25% interest belongs to 50 individuals, either individually or through a mining cooperative comprising of local villagers, the majority of which are drawn from the nearby village of Web.