We came across this deposit by chance, while prospecting with geologist friends for gemstones in Southern Tanzania. I spent about 8 months on site as an interval between my food agroindustrial activities. A great adventure in a wild environment. This discovery is also of pioneristic importance as it is an anomaly because it was assumed that no gold could be present in the Usagaran System of Rocks within the Mozambican Morphological Belt. In fact most mines in Tanzania are in the North, with alluvial gold. Our is instead placer gold.
About 1.3 million tons at a grade of 5 to 8 g/t were
confirmed by Anmercosa in 1999 in two already partially exposed veins and
subsequently the small scale miners have exposed new veins, in line with the
predictions. That is why we can currently talk of 400/500.000 oz. of placer
gold starting just below ground level.
These veins are about 300 metres strike, 300 metres deep and about 3
metres wide. Other veins suggest larger
strike and up to 5 metres wide. Drilling however needs to be done.
Contrary to the norm, we invited small scale miners to
expand prospecting, for which they have a natural instinct, but also for a
sense of social responsibility. They
only scrape the surface because they cannot dig deeper than about 15 metres,
while the veins are at least 300 metres deep.
And they abandon the sites during the rainy season. The real miners are very few, with the
majority of people being employed by the miners to dig and transport the rocks. This latter employment may continue also
with the new mining approach.
The equipment needed for this open cast mining, I am told,
is that for digging and breaking the rock, and a sealed unit to input the rock
for pounding and extracting gold. This
equipment is medium size, can be purchased new or second hand at a reasonable
price and is easily movable.
While mining the identified deposits, further prospecting
and drilling is recommended as new veins are being discovered and the estimate
is that a total of 1.0 million oz can eventually be achieved in our concession
(total sq. km. 205) in several small rich deposits.
We are looking for a suitable deal with a pioneering group
interested in this kind of smaller but higher grade placer gold, with the
appropriate mining equipment, financial capabilities and skills to mine veins
in reefs close to the ground level. The
gold is also of high purity and it is the first gold discovery in South-Eastern
Tanzania.
The local partner is very experienced, well respected, of
proven honesty and is not a political figure, although he knows everybody very
well for having trained, audited or consulted for most of them for the last
thirty years. This is very important in
Tanzania. We have excellent relations with the Ministry of Energy and Minerals
of Tanzania and with the Local Authorities on site who are really looking
forward to the implementation of the first sizeable local development project,
in an area which has been neglected for decades but has great potential.
As a rough indication, considering a first prudent stage of
about 300,000 oz. at US$400.00 per oz. we are talking of a total sales value of
about US$120 million (but today the spot prices is above US$420). The cost of
extraction of such higher grade but smaller placer gold deposits is said to be
lower than that for alluvial. But even at about 60% production cost, the net
income is US$50 million. Utilising medium size equipment, cheaper than that for
alluvial gold, capable of producing 60,000 oz. per year, the first stage could
last 5 years at US$10 million net income per year. In those five years new
veins will most probably be discovered, and the project can continue. A higher value of gold in the future is also
not impossible, but even achieving half of the above estimated result, the
project still looks feasible.
Our contribution would be the 205 sq. km concession, the
prospecting already done, appropriate and durable local contacts and
protection, and if required, top managerial local supervision. We could work together with an appropriate
joint venture, or consider transferring the project, at a reasonable discounted
value.
Email:
[email protected]
January 2005