INVESTMENT COMMENTARY — Tan Range gets nod for African exposure

Since Barrick Gold (ABX-T) acquired the Bulyanhulu gold deposit in Tanzania last year, mining analysts have been keeping a close eye on juniors holding ground in the surrounding region.

Among the juniors receiving attention is Tan Range Exploration (TNX-A), which has been toiling in the country’s greenstone belts long before Barrick put the seal of approval on what is expected to become one of the world’s major mining districts.

Analyst Robert van Doorn of Loewen, Ondaatje, McCutcheon recently described Tan Range as a “speculative buy” for its holdings in Tanzania, including the Itetemia project, a joint venture with Barrick.

The junior is currently trading at 36 cents in a 52-week range of 11 cents to 64 cents, and has 36.6 million shares outstanding (41.6 million fully diluted).

Tan Range’s main asset is the 136-sq-km Itetemia property, which is directly adjacent to Bulyanhulu, where mine planning is under way. In September, Barrick plans to start a 2,000-metre drill program at Itetemia, which will be followed up by a 6,000-metre program.

Tan Range’s work to date has focused on the Golden Horseshoe Reef, which has is now believed to have a strike length of 1,500 metres. The quartz-sulphide-rich reef has a true thickness of 4-8 metres averaging 4 grams gold per tonne, with a higher-grade central zone.

Barrick can earn up to a 60% interest in the property by arranging project financing. Assuming a sizable resource is outlined, processing would take place at its nearby Bulyanhulu mine.

Meanwhile, Tan Range has optioned its 100-sq.-km Geita East project to Ashanti Gold (AHD.U-T), which owns the adjacent Geita mine. Drilling is focused on the northwest corner of the property, which is thought to contain an extension of the Geita deposit.

Four other properties — Kabahelele, Luhala, Mnekezi and Mulehe — have been optioned to Newmont Mining (NEM-N). Mnekezi is viewed as particularly prospective as it is adjacent to the Tulawaka project, where Pangea Goldfields has been reporting impressive drill results.

“We are expecting to hear more from Tan Range, which has come back from near dead [10 cents per share],” van Doorn concludes. “All of sudden, there is a lot happening . . . “