Over 60 permits issued to prospect for gold

Authorities have awarded 61 permits for gold prospecting on the island, while another 15 applications are pending, a report published by Politis on Tuesday said.

Prospecting activities cover a combined area of approximately 142 square kilometres. Surveys are being carried out in the Nicosia, Larnaca, Limassol and Paphos districts by foreign and local investors whose companies are registered in Cyprus.

The Mines Service said most of the prospecting is for gold and copper.

From mid 2017 to 2020 a unit for the production of gold-silver alloy operated at the Skouriotissa mine. Operations at the mine have been temporarily suspended since 2021 until the confirmation of new reserves at the site.

Based on data from the Mines Service, between 2017 and 2020 a total of 189 kilograms of gold were discovered and extracted. The extracted gold was sent on to facilities overseas for further processing.

The value of this gold is estimated at €11 million. Today a kilogram of gold sells for around €60,000.

As prospecting involves high cost and high risk, while at the same time it creates jobs (geologists, engineers, non-specialised staff), the law provides that during the survey phase the companies do not have to pay offsets to affected communities. Offsets are paid to communities once extraction begins.

According to Politis, survey operations for gold and other minerals do not adversely impact the environment due to the use of water and biodegradable foam.

Nevertheless, strict criteria govern the granting of survey permits – such as that the sites are promising in terms of yield, that the research activities do not negatively affect local residents, archaeological sites or the groundwater. In addition, permits are issued only to persons with proven financial wherewithal to conduct these operations.

For a company to get the green light to extract/exploit gold, it must secure the following permits: a town planning/zoning permit for developing a mine and related facilities; a permit for discarding liquid and solid waste, as well as mining waste; a building permit for the facilities themselves; and a mining exploitation permit.

Where a company secures an extraction/exploitation permit, the company will be monitored closely by authorities and must update the work schedule every five years.

The going rates for prospecting are: €10,000 for a reconnaissance permit, €50,000 for a Category A prospecting permit, and €20,000 for a Category B prospecting permit. These fees are charged per year.

In addition, the government charges concession fees, as a percentage of the companies’ annual gross revenues. In 2022, authorities collected €230,000 from prospecting permits and €97,000 from mining rights.

The following companies have permits to prospect for gold: Hellenic Copper Mines, Eastern Mediterranean Resources, Kimon Enterprises, Katla Exploration (Northern Lion Gold Corp), and Treasure Development.