Kinross, Kassan focus on Tanzania

Two companies — Kinross Gold (TSE) and affiliated junior Consolidated Kassan Resources (VSE) — have completed a share purchase and option agreement with East African Mines (EAM), a private company that controls several gold properties in Tanzania.

Under the deal, Kinross acquired 51% of EAM for US$765,000 on closing and Kassan can acquire the remaining 49% by spending US$4 million on exploration and development of EAM’s properties, followed by a payment of US$735,000. EAM controls mineral rights to about 1,000 sq. km in 12 separate properties, all within the Lake Victoria Goldfields region of northwestern Tanzania. The most advanced of these properties is the Buckreef project, a joint venture held 80% and 20%, respectively, by EAM and the Tanzanian government. EAM recently completed a 53-hole program of reverse-circulation (RC) drilling on the property, which was designed to upgrade preliminary resource estimates based on limited drilling by previous operators.

The RC program confirmed the presence of a significant, potentially open-pit resource consisting of three separate zones along a northeast-trending shear zone that extends for more than 2.3 km. Some of the more significant intersections (all true width) include: 4.43 grams gold per tonne over 11.5 metres in hole 09; 5.02 grams over 20.5 metres in hole 21; 6.39 grams over 12.5 metres in hole 27; and 10.2 grams over 9.5 metres in hole 34. Based on the RC results, and on previous diamond drilling, drill-indicated and inferred open-pit resources are calculated to be 1.12 million tonnes at 4 grams gold. In addition to the open-pit resource, drill intersections below the 50-metre level suggest a downdip, underground potential along the shear zone. The average grade and width of 10 intersections between 50 and 110 metres in the Main zone is 5.41 grams gold across 8.5 metres. Additional RC drilling is planned to upgrade the existing resource, and diamond drilling will be carried out to evaluate the downdip potential of the mineralized shear zone.

Kinross and Kassan expect to advance the project to the feasibility stage by mid to late 1995.

The Rwamagaza prospecting licence covers a 150-sq.-km area around the Buckreef property, as well as both strike extensions of the Buckreef mineralized shear. A second, east-west-trending shear has also been identified, 3 km south of the Buckreef zone.

An air core drilling program is to begin shortly, followed by RC and diamond drilling.

Kinross and Kassan have received results from an 11-hole diamond drill program on the Nyakafuru property, which is 55 km south of the Buckreef play. The drilling was carried out to test two parallel zones of intense silicification and veining within sheared mafic metavolcanics known as the Number 2 East and West Reefs. Encouraging results from the Number 2 East Reef include 7.02 grams over a true width of 5.5 metres in hole NPD-2 and 7.54 grams over a true width of 6.5 metres in NPD-4.

Some of the better results from the Number 2 West Reef include 7.7 grams over a true width of 5.5 metres in hole NPD-8 and 8.96 grams over a true width of 4.5 metres in hole NPD-9.

The Number 2 East Reef remains open to the north, and both zones are open at depth. Additional RC and diamond drill work is planned on these zones early in the new year.

The 50-sq.-km Nyangombe prospecting licence, 85 km south of Mwanza, is underlain by banded iron formation intercalated with felsic pyroclastics and carbonaceous metasediments locally covered by

laterite. Limited drilling has intersected mineralized iron formation containing anomalous gold values of up to 4.43 grams.

A ground magnetic survey followed by RC and diamond drilling is planned for January.

The eight other properties in the EAM portfolio have all been covered by initial reconnaissance geochemical sampling and mapping. These properties, along with those mentioned above, will be the target of a US$2.6-million exploration program in 1995. Work will initially focus on delineating open-pit resources within trucking distance to Buckreef where a mill is envisioned.

To help fund its exploration activities, Kassan has completed a private placement with Asia Pacific, one of the underlying vendors of EAM. Under the deal, Asia Pacific has subscribed to 500,000 units of Kassan at $1.30 per unit for proceeds of $650,000. Each unit consists of one Kassan share and one warrant. The warrant will be exercisable for one year at $1.50 per share.