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Monday, Apr 15, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Gemfields evacuates Mozambique gold project after violence erupts in nearby village

Five people were killed in an insurgent attack on the village of Nairoto, Cabo Delgado province

Gemfields evacuates Mozambique gold project after violence erupts in nearby village
Nairoto Resources gold project, 75% owned by Gemfields. Cabo Delgado province, Mozambique. Photo via Nairoto Resources Limitada

A gold-focused subsidiary of the United Kingdom’s Gemfields Group Limited (JSE: GML) (LSE: GEM) was forced to evacuate its exploration camp in Mozambique late Sunday night following violent attacks from insurgents at a nearby village.

On Tuesday, the London-based company issued a statement about the evacuation of the African gold camp run by its 75 per cent owned subsidiary, Nairoto Resources Limitada (NRL).

“NRL has initiated the process of evacuating operational employees and contractors, and therefore operations at the site have ceased,” said a news release from Gemfields on Tuesday.

According to Zitamar News, a popular Mozambique publication, more than 30 insurgents struck the village of Nairoto in the country’s Cabo Delgado province with rocket propelled grenades and light machine guns. The news outlet says that according to local sources, the insurgents likely came from a raiding party stationed at the province’s Mesallo River.

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Five security personnel in the village were killed and Reuters has suggested that the attack may be linked to the Islamic State.

“The northern Mozambican province has seen an Islamic State-linked insurgency that has claimed thousands of lives since it broke out in 2017, disrupting multibillion-dollar natural gas and mining projects,” said Nelson Banya from Reuters on Tuesday.

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Gemfields’ owns a ruby mining operation located about 80 kilometres from Nairoto too, but activity at that site has continued as normal. The company also has emerald mining operations in Zambia and Ethiopia.

Gemfields’ stock price dropped by 6.7 per cent today to the equivalent of $27.04 on the Johannesburg Stock Exchange.

Gold mine safety is a continuous issue in Canada for other reasons

Although insurgent attacks near mining sites are unheard of in Canada, mine safety continues to be a persistent issue.

Charges of negligence have been laid against Vancouver’s Sabina Gold & Silver Corp. (TSX: SBB) by the Workers’ Safety and Compensation Committee in Yellowknife over the death of a worker at Nunavut’s Back River Gold District that went through the ice in a bulldozer last January.

“While clearing snow, a D6 dozer and its operator were lost through the ice approximately 6 kilometres from the Port Facility at Bathurst inlet. The RCMP in Cambridge Bay, Workers’ Safety and Compensation Commission and the Mines Inspector have been notified,” said the company in a news release last January.

“An investigation is underway to determine the cause of the accident.”

According to the CBC, the organization has filed 10 charges in the Nunavut Court of Justice and the matter will be addressed in court early next month. They include failure to ensure safety of all persons at the work site and a failure to implement and maintain work practices.

Sabina was recently acquired by B2Gold Corp. (TSX: BTO) (NYSE MKT: BTG) (NSX: B2G) for $1.1 billion and Nunavut’s Back River Gold District now belongs to B2Gold.

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Argonaut Gold (TSX: AR) also reported a fatal accident at a northern Ontario gold project last November. An investigation is currently underway to pinpoint the cause.

The Ontario Ministry of Labour, Immigration, Training and Skills Development said the man killed was struck by materials in a statement provided to Canadian Occupational Safety.

Sabina’s stock dropped by 0.87 per cent today to $1.70 while Argonaut’s share value decreased by 3.5 per cent to $0.55 on the TSX.


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