China’s footprint in Africa just went up a size with the announcement that a Chinese consortium has invested US$6 million in Douglas Lake Minerals (DLKM-O).
The equity investment will be used for project financing as well as exploration and development at Douglas Lake’s properties in Tanzania and give the consortium a 20% stake in the Vancouver-based company.
The consortium is led by the Tianjin Institute of Geology and Mineral Resources. TIGMR is a subsidiary of the China Geological Survey, a department of the Chinese government’s Ministry of Land and Resources.
Funds will be used to make a final payment on the Mbwemkuru alluvial gold deposit in Tanzania and bring it into production, as well as pay for geological work on Douglas Lake’s top five exploration projects in the country.
Mbwemkuru has economic grades of between 1 and 5 grams gold per tonne and in some areas as high as 50 grams gold per tonne, the company states.
The 430-sq-km Mbwemkuru project, in southeastern Tanzania, is about 500 km from Tanzania’s capital, Dar es Salaam. It currently produces between 150 to 200 oz. gold per month with no mechanized mining equipment.
“With minimal investment the company’s consulting mining engineers feel the property could be in early production generating as much as 100,000 oz. gold per year,” the company states on its website.
Douglas Lake’s main task now is to delineate the economically processable alluvium gold deposits from the Mbwemkuru placer deposit, as no systematic exploration has yet been undertaken in the area.
The company’s Tanzanian properties cover about 10,000 sq km. The junior exploration company is exploring for gold, copper, nickel, uranium and diamond mining opportunities.
Tanzania has attracted all the major international mining companies including Anglo Gold Ashanti, Barrick Gold, BHP, Newmont Mining and Resolute.
Currently Douglas Lake has a portfolio of 55 prospecting concessions and is negotiating to acquire an additional 80.
Douglas Lake is currently trading at about 61 a share and has a 52-week trading range of 8 70.
The Canadian junior has 40.3 million shares outstanding.
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