PAC-Day2-3TGKigali2013

PAC Gold Project(supported by PPA)

Challenge

ICGLR

Illegal Exportation of DRC Gold

12-17 million tonnes/year (Group of Experts

Legal Exports < 1 tonneMost gold exported illegally via

neighbouring countries Tax loss

2% royalty= $800,000 tonne$8 million (@10 tonnes)

Conflict Financing

Project Goals

ICGLR

Legal Exports Legally export a significant quantiy (>=1kg) of artisanally

produced DRC goldCreate Traceable Mineral Chain for Gold

Traceable gold mine site to exportFormalise/Legalize Artisanal ProducersEliminate Conflict in Project Areas

Use power of NGO/OECD to focus attention on project areas

Pilot Project – Try out new techniques Experiment to see what works How to apply Annex 1 in real world situation How to scale up

Project Assumptions

ICGLR

Gold is Different Easily Fungible (gold=money; money=gold) Easily Smuggled (unlike cassiterite) Easily bought/sold (unlike diamonds)

Positive Inducements only Dodd Frank/ OECD have little to no effect Cannot force gold into legal channels Have to coax gold into legal channels

Work with Existing Chain/Actors Minor tweaks only to existing mineral chain Find inducements for diggers, negociants exporters to

participate Work collaboratively with government, industy in place

The Grand Bet

ICGLR

Technical Assistance in exchange for Legal Sales Have to coax gold into legal channels PAC agrees to provide technical assistance and equipment

to diggers to help them increase their production (yield) of gold

In return, miners agree to sell gold through identified, legal channels

Higher Yields make up for Lower Price Diggers will receive less per gram for legally sold gold Higher yields possible with PAC equipment will make up for

lower price This is the Grand Bet

Project Phases

ICGLR

Research Phase - COMPLETE Develop criteria for areas (axes) and sites Baseline research into areas and sites

Enumeration (registration) Phase - COMPLETE Detailed Data collection on diggers in identified areas Specific site selction for productino phase

Production Phase Study of sites, production methods Recommendation/implementatino of technical assistance

Traceability Phase Development, implementation of clean traceable gold chain Legal exports to international market

Research Phase

ICGLR

Complete April 2013

Criteria for Areas (Axes) and Sites Reasonable production/digger population No overlying mineral claims

Bunia/Watsa eliminated due to Sokimo claims (20% royalty) Limited conflict

Mambasa to Beni corridor elimated (Mai Mai Morgan taking Mambasa)

Proximity to Population Centre (project base)Preliminary Research

4 Axes identified (Bondo, Mangi, Nia-Nia-Wamba, Bole-Bole)

Baseline Research/mapping 25 sites; 3000 miners

Research Phase

ICGLR

Research Phase

ICGLR

Research Phase

ICGLR

Research Phase

ICGLR

Enumeration Phase

ICGLR

Complete June-Sept 2013

Detailed Profile of Gold Exploitation Joint registration teams (gov/industry/civil society) Extensive visits to axes idenitified in research phase Goal had been registration (carte creuseur) but Prov Gov

not ready Registration enumeration

Results >11,000 miners/negociants/auxiliaries enrolled in

database Detailed information on age, sex, income, years in trade

Enumeration Phase

ICGLR

1%

18%

44%

24%

13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

< 18 18 - 25 25 - 35 35 - 45 > 45

Age distribution

Age Range

Enumeration Phase

ICGLR

primary education

36%

secondary education

62%

university2%

Enumeration Phase

ICGLR

MEN78%

WOMEN22%

% GENDER TOTAL

Diggers68%

Traders2%

Auxiliaries30%

% Type of Work global

Production Phase

ICGLR

Ongoing Began Oct, 2013 with technical visit Runs Oct-Dec 2013

Technical Visit Oct 7-22, 2013 PAC teamed up with Artisanal Gold Council, Dr. Kevin

Telmer Field work in 2 sites – Mangi, PK25-PK51 Study geology, production methods Devise, test, implement improvements in production

methods Study/sugget longer term interventions

Geology, environment, scaling, sustainability

Existing Technology-Mangi

ICGLR

Sluice - Mangi

Panning Concentrate - Mangi

Grain Size Analysis

Grain Size Analysis

Fine Grain Gold (100, <100) is 34.3% of total!!!

Sieve Aperture

(mm)

Gold (g)

% of Total

8 2.36 0.83 16.4

12 1.7 0.15 3.0

20 0.85 0.49 9.7

50 0.30 1.57 31.4

100 0.15 0.89 17.5

<100 <0.15 0.85 16.8

Lost 0.27 5.2

Improved Sluice

Scavenger Sluice

Collector Basin

Concentrator – Vortex (Blue Bowl)

Production Phase - Results

ICGLR

Results - Mangi Grain size distribution indicates fine gold worth

pursuing Introduction of new sluice material, scavenger

sluices, terminal basin Introduction of sieving for limited grain size

panning Introduction of vortex for final concentrate

processing

Increase in yield of approx 30%

Production Phase - Rollout

ICGLR

Rollout Mangi Sluice carpets (thick and fine) for 50 teams being

delivered Sieves for 50 teams being delivered PAC personnel on hand for training in new

techniques Excavation/safety material already delivered

Picks, shovels, gloves, boots,etc

Production Phase – PK25-51

ICGLR

Results – PK25-51 More mechanized sites, extensive mercury use Study indicates Introductino of:

Mechanized crushing Better milling (non-octagonal mills) Gravity separation (centrifuge) Better sluicing (scavenger sluices) Centralized tailings collection/treatment

Rollout PK25-51 Full set of interventions beyond project budget Single step intervention under consideration (crushing) Predominance of Beni/Butembo negociants is complication

Traceability Phase

ICGLR

Traceability Phase Mass Balance Approach

ICGLR

Miners

Negociants

Exporter

Registration of Production at Mine Site

Registration of Sales at Negociant

Registration of Sales at Exporter

1.5 kg month

1.0 kg month

750 g month

Traceability Phase Closed Pipe vs Mass

Balance

Negociants

Exporter

M

Shop Keepers

Illegal Exporter

Exporter

Shop Keepers

NegociantNegociant

Mass Balance Approach

Negociants

Exporter

M

Shop Keepers

Illegal Exporter

Exporter

Shop Keepers

NegociantNegociant

Closed Pipe Approach

Negociants

Exporter

M

Shop Keepers

Illegal Exporter

Exporter

Shop Keepers

NegociantNegociant

Scaling Up

ICGLR

Negociants

Exporter

M

88% of World Price

98% of World Price???

10% margin (2.5% taxes)

Pre-financing

Scaling Up

Negociants

NGO-REFINERALLIANCE

M

88% of World Price

98% of World Price

10% margin(2.5% taxes)

Local Devel2%

Techn Asst2%

Traceability2 %

PreFincnce1.5 %

PAC Gold Project(supported by PPA)

Tracking, Certifying, Exporting

Artisanal Gold from Eastern DRC