Canadian mineral exploration firm Thor Explorations is preparing to bring the Segilola gold project in Osun State, Nigeria, into production during the first quarter of 2020.

The company has obtained a mining and exploration licence for the project, which is estimated to have probable gold reserves of approximately 500,000oz, Reuters reported.

Thor Explorations is currently considering options to raise around $72m in funding in order to bring the mine online.

The development comes at a time when Nigeria intends to diversify its economy away from its conventional revenue base of oil and gas.

“The company has obtained a mining and exploration licence for the project, which is estimated to have probable gold reserves of approximately 500,000oz.”

The World Bank previously revealed its intention to provide funds to enable the Nigerian Government to strengthen its mining sector in April last year, which at the time was experiencing difficulties as a result of weak economic conditions in the commodity market of 2015-16.

The Nigerian Government received roughly $150m following the announcement, which is slated to be used to facilitate the development of the country’s non-oil sectors.

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In addition, the government is expected to use the funding to formalise the artisanal mining sector, as well as improve environmental practices and support infrastructure improvements for larger-scale mines.

Nigeria also intends to address the country’s over-reliance on the oil sector, which contributes an estimated 8.7% of its total GDP.

Meanwhile, mining accounts for only 0.5% of the country’s GDP.

Nigeria’s weak mining sector has struggled to convince foreign companies to invest in the country, which has forced it to largely depend on imports for domestic needs.

Thor Explorations originally acquired the Segilola project in 2016 for a consideration of $3.1m in cash and six million shares.

Segilola is the company’s flagship project and consists of a proposed open-pit gold mining development, which is based on an indicated mineral resource that was defined by a comprehensive drilling programme involving more than 16,000m of reverse circulation (RC) and diamond drilling.