Operational Updates

A Definitive Joint Venture Agreement between Tanzanian Royalty and the State Mining Corporation ofTanzania(Stamico) for the development of the Buckreef Gold Project was concluded recently inDar es Salaam. Attending the signing ceremony were the Company’s President and CEO, James E. Sinclair, Chief Operating Officer (Tanzania) Joseph K Kahama and Company Director and Corporate Counsel, Rosalind Morrow. At a public signing ceremony, the Honourable William Mganga Ngeleja, Tanzanian Minister for Energy and Minerals, told the gathering that he was delighted to witness the “historic event of the signing of the Joint Venture Agreement for the Re-development of Buckreef Gold Mine” while Mr. Sinclair described the agreement as “a new model” with respect to how international mining companies conduct business in mineral rich countries in the developing world. For press coverage of this auspicious event in PDF format click here.

A Preliminary Economic Analysis (PEA) of the Buckreef Project is currently under way and upon the favourable completion of the PEA, the joint venture will undertake a Definitive Feasibility Study. Under the recently concluded definitive joint venture agreement, the parties intend to work toward bringing the Buckreef project into commercial production within a 30 month period.

 

 

Our technical staff at the Buckreef Gold Project inTanzaniahave just confirmed that the diamond drill rig will begin testing the Eastern Porphyry target this evening.

The drill program will be conducted on a two shift basis during the day and at night.

The first drill hole is designed to understand the geometry of the geological structures within the Eastern Porphyry Zone along with the host rock and controls for the mineralization in the area. With this knowledge on hand, the Company’s geologists will be better able to plan the next phase of drilling.

A total of 860 metres (approximately 2,800 feet)  of diamond drilling is planned for this area in the current phase of drilling. (See picture below of the diamond drill being readied for drilling).

 

After completing 93 metres in three holes, RC drilling on the Buckreef Northeast Extension target was delayed because of mechanical problems with the drill rig   The RC drill program in this area is scheduled to resume the second week in October. In the meantime, a diamond drill rig has arrived on site to test the Eastern Porphyry target and that program is expected to begin October 1st. The following pictures show the diamond drill being readied for service.

The Company is pleased to provide you with this pictorial update of the drill program that is currently under way at our Buckreef Gold Project inTanzania.

We are using our own RC drill rig for some of the program and have secured another RC unit from a contractor. That particular unit is presently being serviced on site and will be back on line as soon as that work is completed.

In addition to the rotary drilling equipment, the Company has awarded a $1.8 million contract for diamond drilling on the Eastern Porphyry, Tembo and Bingwa prospects which are part of the greater Buckreef Gold Project.

The Eastern Porphyry is located 800 metres east of the Buckreef Main gold deposit. Previous RC drilling in the Eastern Porphyry area intersected a 300 metres strike length of continuous gold mineralization. Historical results by previous operators included: 18m @6.6 g/t (RC–IAMGOLD); 2m @ 8.8 g/t (RC– Ashanti); 2m @ 5.67 g/t (RC–Ashanti); 4m @ 2.1 g/t (RC-Ashanti); 2m @ 2.1 g/t (RC-Ashanti). Infill diamond and RC drill programs in this area are designed to upgrade the target to resource category and acquire structural information to facilitate additional work.

The Tembo target is located four kilometres southwest of the Buckreef Main deposit and the drill program there will test strike continuity of mineralization to the east. The principal objective of the program is to upgrade the deposit resource from inferred to the measured and indicated category. At least three diamond drill holes are planned.

The Bingwa target is located five kilometres east of Buckreef Main deposit. At least three diamond drill holes are planned here with the intent of upgrading the resource from inferred to measured and indicated.

The following digital images show some of the activity that is currently under way on our Buckreef Project: