Luhala Project

The Luhala Project is located 65km south of Mwanza within the Buhungukira greenstone belt which forms the eastern extension of the Geita greenstone belt in northern Tanzania.  Similar to the Company’s Itetemia project, which is situated approximately 60km further west, the Luhala project covers Archaean-age rocks equivalent to those that host the world class Bulyanhulu and Geita deposits in the Lake Victoria Goldfields of northern Tanzania.

 

Location Map: Luhala Gold Project

 

Geology

Luhala is hosted by a sequence of felsic volcanics adjacent to the contact with overlying intrusive rocks within a southwest plunging anticline. The sequences are disrupted by north-south and west-northwest trending faults. Gold mineralization is expressed within the weathered zone as brecciated, gossanous quartz veining.

Exploration History

There has been very little historic exploration in this area. A few small pits were sunk during the German colonial period about 100 years ago. But it is not known how much gold was extracted during this period. There has only been sporadic and limited artisanal activity since that time.

Modern exploration commenced in 1995 with Tanzanian Royalty which completed soil geochemistry, rock geochemistry, trenching, RAB, RC and diamond drilling, Induced Polarization (IP) survey, and magnetic surveying. This work concentrated on the Kisunge Hill and Shilalo Hill areas.

 

Unloading sample bags

 

Due to the complex structure and intense weathering, the interpretation of the mineralization at Luhala has had a history of uncertainty which was not resolved until the diamond and RC drill holes were re-logged and remodeled early in 2006. Prior to that, the controls for the mineralization were uncertain and this is reflected in numerous drill hole orientations.

Following the remodeling program and IP survey, the 2006 diamond drill program tested a model of stratabound and shear-zone hosted gold mineralization within the felsic rocks. The IP survey confirmed the shear zone around Kisunge Hill, a probable down dip extension of mineralization in the fold nose near Shilalo West Hill, and a continuation of sulphide mineralization to the north of Shilalo West Hill.

Exploration potential

Exploration at Luhala has identified a number of prospects which show potential for open pittable oxide gold mineralization. Five gold mineralized prospects have been identified at Kisunge Hill (Central, Eastern and Southern zones) and Shilalo Hill (South and Southwest zones). Drill hole LKD-001 on Kisunge Hill Central Zone returned a true width intersection of approximately 16 m grading 4.3 g/t. Structural measurements indicate sub-vertical veining which points to a similar orientation for the mineralized brecciated zone.

The exploration significance of this is that the mineralized intersection has not been adequately tested down the dip and possibly along the strike. Drilling to both test this target and to increase confidence in the gold mineralization identified on all the mineralized zones on Kisunge Hill is required.

A north-south striking vertical dipping low grade gold zone has been identified in RAB drilling carried out in 2005 by Tanzanian Royalty 1.5km north of Shilalo West Hill. This appears to be a fault offset extension of the mineralization associated with Shilalo West Hill.

This remains a key target area for follow-up drilling.  However, additional drilling may also be required at Shilalo West Hill to test for continuity of mineralization near surface and at depth. At Shilalo South Hill, the results of previous drilling and trenching appear to be inconsistent with IP results. Remodeling of data and the identification of a plunging nose fold have shown that additional drilling is required to test for continuity of mineralization near surface and at depth and to infill gaps in the existing drill pattern.

Detailed low level aeromagnetic surveying and follow-up IP have been recommended in order to create a robust litho-structural map of the area and assist the identification of additional drill targets on the project.

Summary

Drilling to date has been all within the weathered zone which extends to a depth of greater than 80m.  Historically, controls on mineralization have been poorly understood but recent modeling has resulted in greater confidence in the geological model. As a result, further in-fill drilling and extensional drilling to assess the mineralization at depth below the base of oxidation is required with the aim of developing a mineral resource. A number of areas have been identified for further evaluation.

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