Dubai family strikes $3bn gold deposit in Yemen

Thani Dubai Mining has struck gold at one of its concessions in Yemen with the nation's government expected to officially announce the find as a major discovery.

Al Mukallah, Yemen, where Thani Dubai Mining is expected to announce proven reserves of 2.2 million ounces of gold.

One of Dubai's most prominent families has made a major gold discovery in Yemen worth as much as US$3 billion (Dh11.01bn) at today's high prices, The National can reveal.

The gold is in a concession held by Thani Dubai Mining, a unit of the family-owned Thani Investments, which is understood to be awaiting Yemeni government clearance to announce proved reserves of about 2.2 million ounces near the coastal town of Al Mukalla, south-east of Yemen's Wadi Hadramaut.

Gold has soared to record prices this year and was worth as much as $1,330 per troy ounce on world markets last night, making it more feasible to prospect in remote and dangerous regions.

Mining companies usually consider 1 million ounces of reserves as the threshold for justifying a feasibility study for a gold mine.

But it would take between 10 and 15 years from the start of exploration to prove the presence of sufficient resources for a commercial project and to develop a mine, said

Chris Sammartino, the chief financial officer of Cantex Mine Development, a Canadian minerals exploration company that is also active in Yemen.

Sources at Thani Investments said Thani Dubai had conducted a drilling programme to assess reserves and had submitted a final report to the Yemeni oil and minerals ministry. Thani Dubai was waiting for the ministry to release the results.

The mining unit started drilling ore samples in 2007. Last year, it said it was analysing the data it had collected and would use the results to define programmes for further exploration and development of the Medden gold deposit near Al Mukalla.

Despite the difficulties inherent in pursuing a large minerals development in politically unstable Yemen, the poorest Arab nation, gold extraction could be lucrative.

While Yemen might contain rich gold deposits, the challenges in developing them should not be underestimated, said Syed Akhtar, a senior analyst at Kuwait's Global Investment House.

"You need good transportation infrastructure such as railways," Mr Akhtar said. "For Yemen, this is a problem."

But in ancient Yemen, a lack of railways did not stop gold mining.

"The Sabaeans were most famous for exploiting gold, to the extent that it was said the Sabaeans were one of the richest nations in the region because of the large number of gold mines in their land," the Yemen geological survey and mineral resources board said in the introduction to a 2008 document on mining exploration projects in the country.

"The doors, ceilings and walls of their palaces and temples were all decorated with gold, silver and gemstones."

This year, the board published the results of a number of geological and geochemical surveys carried out by the government and foreign minerals exploration companies that had located 40 gold and silver deposits in Yemen.

The most promising results were from the Medden area. The board said the estimated 678,000-tonne concession would produce an average of 15 grams of gold and 11 grams of silver a tonne.

Thani Dubai acquired a second Yemeni mining concession in 2008, in the Wadi Sharis/Hajjah area northwest of Sana'a. The board estimated that would provide an average of 7 grams of gold per tonne without providing an estimate of the concession's size.

[e-mail]