The E­­­ast African country of Tanzania has emerged as a prominent African gold producer, and is in fact considered to have the continent’s second largest gold reserves after South Africa: an amount in excess of 36 Moz (1000t).

With rapid growth of gold exploration in the late 1990s, Tanzania became the continent’s third-largest producers of gold behind South Africa and Ghana, with particular investigation focused on the greenstone belts around Lake Victoria – a region that now boasts several world-class deposits.

The Tanzanian Government’s Development Vision 2025 commitment is anticipated to boost the mining sector, with a vision for it to account for 10 per cent of the country’s gross domestic product (GDP) by 2025. The combination of Tanzania’s well-developed system of mining laws – which shares many features with developed countries – and the absence of any mandatory state or local equity participation in Tanzanian mining ventures, makes the country an attractive destination for foreign mining investment.

According to the 1998 Mining Act, the following types of licence apply (depending on the stage of mining operations):

• Reconnaissance Licence: one-year duration, renewable for a further period of one year. The holder has priority to apply for a prospecting licence over the relevant area.
• Prospecting Licence: duration of up to three years; renewable for two further periods of up to two years each. At each renewal at least 50% of the area must be relinquished.
• Mining Licence: only available to holders of a prospecting licence, a mining licence is granted for a period of 25 years or for the life of the relevant mine.

Mkurumu Project

The Mkurumu Project is located in eastern Tanzania, approximately 125km southwest of the nation’s capital, Dodoma. Even though the region was found to have potentially exploitable gold concentrations in the 1960s, it is not as extensively explored as the Lake Victoria region to the north of the country.

The Project includes an area of approximately 43.39 square kilometres and has well-established accessibility via regional roads and tracks that are linked to sealed highways leading east to the coast and main ports.

Covered by a Prospecting Licence, the Company’s wholly owned subsidiary Anglo Tanzania Gold Limited (“ATGL”) owns a 46 per cent interest in the Mkurumu Project, having earned that interest pursuant to a joint venture agreement with Ashanti Exploration Tanzania (a subsidiary of Anglo Gold Ashanti), which also holds a 46 per cent interest. Local Tanzanian interests hold the remaining eight per cent. ATGL has full operational control of the drilling and exploration programme for the project.

In the first half of 2007, ATGL completed first-phase drilling on the project area, involving 12 diamond drill holes resulting in a total of 1,041 metres of core. A detailed soil geochemical sampling programme covering the entire licence area has subsequently been undertaken, with a view to pursuing identified targets in the next phase of drilling.

The Company has now also fully earned-in a 50 per cent interest in certain early stage Tanzanian Gold projects in, inter alia, the Handeni Morogoro, Babati, Eyasi Iringa, Mufindi and Rufuji areas, from two local Tanzanian exploration companies.

The tenements package consists of nine highly prospective tenements, together with Prospecting Licences covering, in aggregate, 2,116 square kilometres and an additional three applications lodged, for either new licences or renewals, covering approximately a further 455 square kilometres.  The Handeni Morogoro Region in Tanzania is rapidly emerging as a new and under-explored gold district. The potential of the terrain is increasingly becoming more widely recognised with gold discoveries by local prospectors having occurred on a district scale and defined an extent of mineralisation with a strike-length of over 100 kilometres. The geology and location of the known gold discoveries, which occur in both alluvial and in bedrock settings, suggest the mineralisation is controlled by regional structures.

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