(Ecofin Agency) - The extractive sector contributes less than 5% of Senegal’s GDP and less than 10% of its public revenues. The country could, however, do better, if its resources are well exploited. 

Thor Explorations, a Canadian company, has acquired two new gold exploration permits in southeastern Senegal. The firm disclosed the information on April 2, 2024. The two permits, respectively the Douta-West and Sofita permits, are contiguous and located 20 km south of Thor’s flagship gold project in the country, the Douta project.

Thor acquired from Birima Gold a 70% interest in Douta-West against $120,000 payable in two installments. The Canadian company will finance the development of the asset up to the pre-feasibility study to gain an additional 10% interest. At this stage, Birima will have to contribute to project financing or cede 5% interest, leaving Thor with an 85% stake. Meanwhile, the Senegalese government will retain 10%.

Regarding the Sofita permit, Thor will acquire 80% of the project by spending $300,000 on an exploration program and paying $20,000 to Sofita Services & Logistics. The current owner and the Senegalese government will each retain 10% interest.

Thor Explorations expands its presence in Senegal’s gold sector through the investments. It is expected to release a pre-feasibility study for the Douta project this year. According to estimates, this project hosts around 2 million ounces of gold.

At present, Senegal’s gold output mostly comes from two industrial mines. However, the production could grow substantially in the medium term, driven by new projects.

For example, Fortuna Silver Mines, another Canadian firm acquired the Diamba Sud project in September 2023 and plans to spend $9.2 million in the country this year, on exploration activities. Endeavour Mining is also expected to complete an expansion of the country's largest mine, Sabodala-Massawa, by the end of June 2024. This should boost the mine’s output.

In 2022, the extractive sector, dominated by mining, accounted for 4.5% of Senegal’s GDP, 7% of public revenues, and 32% of export revenues. Gold, phosphoric acid, and mineral sands are the main mining products exported.

Emiliano Tossou