Newmont teams up with Tan Range in Tanzania

Returning to Africa after an absence of several years, Newmont Gold (NM-N) has signed a preliminary option agreement with Tan Range Exploration (TNX-A) concerning four of the junior’s gold prospects in Tanzania.

Under the proposed deal, Newmont can earn up to 70% in Tan Range’s interests in four Tanzanian gold properties: Kabahelele, Luhala, Mnekezi and Mulehe.

In each property, Newmont can earn a 60% interest by spending US$1.5 million on exploration over three years, and another 10% by completing a bankable feasibility study within three years.

Once it has acquired 70%, Newmont can acquire, by way of private placement, up to 10% of Tan Range’s shares at market price minus 10%.

Tan Range personnel will carry out any exploration work during the earn-in period, but the junior will be reimbursed for any related costs.

Newmont will pay Tan Range US$50,000 upon signing the agreement, and thereafter will make a series of monthly option payments: US$8,333 during the second year of the agreement; US$12,500 during the third year; and US$20,833 during the fourth.

The Itetemia gold property — Tan Range’s principal Tanzanian project — is not included in this agreement, nor is Tan Range’s Geita East property, which was recently optioned to Ashanti Goldfields (AHD.U-T).

At Itetemia, Tan Range began a 7,200-metre program of rapid-air-blast drilling in mid-February and reports that drill-testing of geophysical conductors has extended the Golden Horseshoe Reef to 1,500 metres.

Also in mid-February, immediately following Barrick Gold’s announcement that it was acquiring Tanzanian explorer Sutton Resources, Tan Range’s share price soared to the 45-55 cents range from 23 cents. Tan Range responded by announcing it was granting stock options to five directors and one officer, entitling them to buy a total of 1.1 million shares at 50 cents each.