Pangea options Tanzanian property to Ashanti

Immediately south of the Bulyanhulu gold deposit in northwestern Tanzania, Pangea Goldfields (TSE) has optioned a 213-sq.-km exploration concession to Ashanti Goldfields.

The option agreement will see Ashanti spend US$4 million on exploration to earn a 51% interest in the property.

The Bulyanhulu, which has a preliminary reserve of 7.2 million tons grading 0.45 oz. gold per ton, is being developed by Sutton Resources (VSE). To confirm the tonnage and grade, Sutton will drive an exploration decline for underground bulk sampling and drilling.

Pangea’s adjoining Bulyanhulu South property features several electromagnetic (EM) anomalies, 5 to 10 km southeast of Bulyanhulu. Some of these are directly on strike, and others have a parallel strike but are offset from Bulyanhulu’s strike extension. High gold concentrations in soils coincide with the EM conductors. Elsewhere on the property, there are other soil gold anomalies that have not been covered by EM surveys.

Beginning in January, a 3,000-metre drill program will test the anomalies. The major company can increase its interest in the property to 60% by completing a bankable feasibility study by December 2000, and can then buy a further 15% interest. The agreement obliges Ashanti to arrange the financing if the deposit goes to production.

Ashanti’s agreement extends to another Pangea property, the 439-sq.-km Rubondo concession, about 75 km west of Bulyanhulu. The company can earn a 51% interest by spending US$3 million on exploration, and a bankable feasibility study can earn the company a further 24%.

Pangea has other interests in Tanzania’s Lake Victoria goldfields, a highly productive gold camp in the period dating from the 1930s to the ’60s. Company president J.C. Potvin estimates that its option partners will be spending about $2 million in the coming year.

The company’s Golden Ridge project, being managed under option by Randgold Resources, is 25 km southeast of Bulyanhulu South. Gold mineralization is hosted by folded, banded iron formation, a style typical of the camp’s most productive deposits.

Randgold recently revised the preliminary resource at the property to 1 million from 570,000 oz.

The Kahama concession, about 50 km south of Golden Ridge, is under option to Anglo American and is at the drilling stage.

In addition, the company has seven concessions under option to South African steelmaker Iscor, all of which are at the reconnaissance stage.