Tanzanian Royalty ramps it up in northern Tanzania

Tanzanian Royalty Exploration (TNX-T, TRX-X) made good on its word to get things moving at its Itetemia and Luhala gold projects in northern Tanzania’s Lake Victoria goldfields.

The company announced a resource estimate for both projects just a month after it reclaimed control from an option agreement partner that couldn’t come through on its payments.

That company was Galway, Ireland-based Kibo Mining. In December Tanzanian Royalty announced that after giving Kibo ample opportunity to meet its option requirements, its patience was at an end and it was regaining control of the two projects.

Itetemia, in which Tanzania holds a 90% interest, is located in the Shinyanga region of Northern Tanzania and sits a mere 5 km east of African Barrick Gold’s (ABG-L) Bulyanhulu gold mine with its resources of 16 million oz. gold.

The main gold prospect on Itetemia is the Golden Horseshoe Reef (GHR), which Kibo considered a potential open-pit mine.

After the project fell back to Tanzanian last December, the company said its priority would look to accelerate  project development, and towards that end, would focus on preparing a National Instrument 43-101-compliant technical report.

True to its word, it has released a maiden estimate which, using a 1-gram-per-tonne cut-off grade, outlines indicated resources of 2.8 million tonnes grading 2.96 grams for 266,000 oz. gold, and inferred resources of 1.4 million tonnes averaging 3.39 grams for 156,000 oz. gold.

The central area of interest on the property is the GHR, which Kibo did a preliminary economic study on back in 2009. Next on the agenda for Tanzanian will be to update that study using today’s higher gold prices.

It says it plans to revise the geological model and pit design using a lower cut-off grade, along with a revised cost and capital estimate for commercially exploitating the GHR resource. That should result in more tonnes making it into resources the next time it updates its estimate.

At the Luhala gold prospect in Tanzania’s Mwanza region, the company outlined 1.8 million tonnes of inferred resources grading 1.87 grams for a total of 112,000 oz. gold.

Exploration at the site has so far focused on mineralization in five anomalous hilltops. The company describes mineralization as stratabound and shear-zone hosted, with the Kisunge Hill, Shilalo West and Shilalo South Hills being the main focuses. It plans to do a follow-up program at the Shilalo South and Shilalo West zones, where the resource appears open at depth and along strike.

Despite promising early stage results from the two projects, the company’s core project remains Buckreef, which it operates as joint venture with Stamico, Tanzania’s state mining company. Tanzanian Royalty has a 55% stake in the project.

Buckreef has 30 million tonnes of measured and indicated resources grading 1.34 grams for 1.3 million oz. gold, and inferred resources of 17.2 million tonnes grading 1.51 grams  for 835,000 oz. gold.

Tanzanian Royalties generates its cashflows from royalty agreements with Barrick Gold (ABX-T, ABX-N), Jinchuan Mining and MDN (MDN-T).