Cameco of Canada bets on African gold through Senegal
New factory to extract opportunities from the heart of the artisanal mining sector
Written by Omnia Hassan
Canadian gold processing company, Dynacor, has entered a new phase of its expansion in Africa following the commencement of ore processing operations at its first plant in Africa, located in the gold-rich Kedougou region in southeastern Senegal.
The Jalam pilot plant comes as a strategic step aimed at building an integrated network around the artisanal and small-scale mining sector, which represents a large part of African gold production but still operates largely outside formal systems.
Galam Factory African Model Test
The company announced that construction of the Jalam facility is more than 95% complete and that it aims to carry out its first gold pour next August; work on the laboratory and primary processing facilities has been completed, while testing continues on grinding, filtration, refining, and gold recovery techniques.
Daincore has also assembled an initial stock of gold ore from two local suppliers and is preparing to expand its supplier base as the plant, designed to process about 50 tons of ore per day, begins full operation.
The company sees the success of this project as a model that can be replicated in other African countries, reinforcing its plan to expand beyond its current operations in Peru.
A different model from traditional mining companies
Daincor does not rely on owning and operating large mines. Instead, it is based on a model of purchasing gold ore from artisanal and small-scale miners, then assaying, processing, and selling the resulting gold.
The company previously applied this approach in Peru by building a supply chain around smallholder producers, and now seeks to test the feasibility of replicating the experience in the more complex and competitive West African market.
Confronting the Challenges of the Informal Economy
Daincourt's move comes at a time when African governments are seeking to tighten control over artisanal gold trading, which provides income for millions of people but deprives countries of a significant portion of revenue due to weak registration and oversight.
Estimates from the organization “Swiss Aid” indicate that hundreds of tons of gold have left Africa in recent years without official declaration, leading to significant losses in revenue and taxes.
In Senegal, a significant portion of artisanal mining is concentrated in the Kédougou region, where the Saraya mine is located, presenting the project with an opportunity to shift part of the informal production into a more organized supply chain.
The success of the project is linked to the trust of the miners.
Despite the significant opportunities, DynKore faces a major challenge in attracting miners to deal with them instead of informal traders who may offer faster payment or less complex terms.
The price levels, speed of payments, and transparency in dealing with suppliers will determine the factory's ability to transition from a pilot project to a true African expansion platform.
In parallel with the Senegal project, the company continues to rehabilitate a processing plant in Ecuador, capitalizing on rising gold prices and strengthening its financial position after recording record revenues of $154.1 million in the first quarter.
