Miners go for gold in Northern Ireland

05 December 2014 - 13:30 By James Wilson
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Walking down to Carrick-a-Rede on the Causeway Coastal Route in Northern Ireland
Walking down to Carrick-a-Rede on the Causeway Coastal Route in Northern Ireland
Image: SUE DE GROOT

Hopes of an economic boost as explorers seek permission to exploit high-grade deposits

It does not yet amount to a gold rush, but Northern Ireland may become a significant source of the precious metal, as plans to develop deposits in the province take shape.

The existence of gold reserves in Northern Ireland has long been known, but development had been held back by a ban on using explosives during the Troubles.

Now, a Canadian mining company is exploring Curraghinalt, a deposit near Omagh that was first explored in the 1980s, and that it believes to be one of the highest grade gold projects in the world.

Shares in Dalradian Resources were admitted to trading on London’s stock market on Wednesday, as it tries to broaden its appeal to UK investors.

Curraghinalt could contain 3.5m ounces of gold and produce about 160,000oz annually over 18 years, according to a preliminary study by Dalradian.

A few miles from Curraghinalt is another deposit owned by a Canadian company, Galantas, which until recently was the UK’s only gold producer. Galantas expects to hear this month whether it will get planning permission for underground gold mining that would revive its operations.

The interest in gold holds out the prospect of an economic boost for one of the UK’s poorest regions, at a time when George Osborne, the chancellor, has signalled his willingness to devolve power to set corporation tax to the Northern Ireland Assembly.

Any development would depend on planning permission, environmental safeguards, further financial backing and, crucially, the gold price, which has fallen 30 per cent during the past two years to about $1,200 per ounce.

However, Patrick Anderson, Dalradian’s chief executive, says Curraghinalt’s high grade - the ratio of gold to waste rock - makes it “robust”, even at slightly lower gold prices.

Roland Phelps, chief executive of Galantas, says: “Northern Ireland has great potential as a gold province. I can see a situation where in 10 years’ time there are three or four mines here.”

Dalradian, which bought rights to the deposit in 2009, is to spend next year defining the size of the gold reserve - the economically mineable portion of the deposit - at Curraghinalt, before it can reach a decision on funding for mine development.

Galantas’s recent output - 3,200oz, or 102kg, in 2012, and half that amount last year as production stopped - is minuscule in world terms.  Dalradian’s resource is larger, but any output would still be relatively small by global standards: Cortez, a Nevada mine owned by Barrick Gold, the world’s largest gold miner, produced 1.3m oz last year.

But the interest in Northern Ireland suggests that at least some mining projects may be viable in the UK. It comes as Wolf Minerals, an Australian company, is building a tungsten mine in Devon, and Sirius Minerals is seeking permission to build a potash mine in Yorkshire.

Other explorers have ideas for underground coal mines in Cumbria and Scotland. In August, Invest Northern Ireland, the region’s economic development agency, offered £326,000 of investment support to Dalradian, which has suggested that an operating mine could offer about 200 direct jobs.

Pat Doherty, the area’s Sinn Féin MP, believes the Curraghinalt mine should go ahead provided it complies with planning and environmental requirements, with most people in the area supportive.

“This is a rural mountain area of small farmers. Employment would be very much required,” he says.

Dalradian will remain based in Toronto and did not raise extra money with its additional listing on Aim. But Mr Anderson says it was a “logical next step” to help it become better known in London.

 

(c) 2014 The Financial Times Limited

05-12-2014

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