MINING IN AFRICA SPECIAL — Canadian juniors pursue

As South Africa enters a new political era, Canadian junior mining companies are moving in to take advantage of a growing number of mining opportunities.

Recently, Caledonia Mining closed a deal to acquire two South African companies with producing gold mines.

In one deal, Caledonia paid $40.5 million in cash and shares to acquire a 100% interest in Barbrook Mines, which operates a gold mine in the Barberton greenstone belt in eastern Transvaal province.

Barbrook, which is forecast to produce 40,000 oz. gold this year, contains a mineral resource of 13.9 million tons grading 0.17 oz. gold per ton. Caledonia is currently evaluating the possibility of increasing the output to 80,000 oz. by 1997.

Caledonia’s second acquisition was a 94.5% interest in Eersterling Gold Mining for $8.6 million in cash and shares.

Eersterling operates a mine in the Pietersburg greenstone belt in northern Transvaal, on the site of the first gold discovery in South Africa. The mine is forecast to produce 20,000 oz. in 1995, increasing to 30,000 oz. in 1996 at an operating cost of US$250 per oz.

Reserves on the Eersterling property are estimated to be 2.1 million tons grading 0.17 oz. Several other mineralized zones, some of which are refractory, have been identified but are not included in the resource estimate.

Caledonia also has exposure to a number of other African countries through its own holdings and a 32% interest in Reunion Mining.

Tanzanian explorer Tan Range Exploration (ASE) has signed a deal to purchase the Nigel gold mine in the Witwatersrand district, near Johannesburg. Underground workings are fully developed to the 1,080-ft. level, and up to its closure in 1991 the mine produced more than 3.3 million oz. Proven reserves are calculated at 5.8 million tons grading 0.11 oz., with an additional resource estimated at 10.3 million tons grading 0.11 oz. Developed reserves are sufficient to sustain a production rate of 1,000 tons per day for 20 years.

Having completed a feasibility study, production is expected to begin at William Resources’ (TSE) Malmani gold mine in the Marico District of the Western Transvaal by mid-1996. With total capital costs estimated at US$10.7 million, the mine is scheduled to process 330 tons per day and yield about 16,000 oz. per year at a cash cost of US$225 per oz.

Ore reserves to the 1,500-ft. level are estimated at 1.25 million tons grading 0.165 oz. Additional inferred resources are present at depth, but require additional drill confirmation. Mineralization occurs in a quartz vein system, and the deposit remains open at depth.