Northern Rand pulls out of deal for Tanzanian permits

Land issues in Tanzania have become a more common theme as of late.

Just a few months after Canaco Resources (CAN-V) had the rights to a small claim within its large property challenged – Canaco was successful in defending its legitimate rights to the claim — Northern Rand Resource (NRR-V) announced that it is cancelling a deal to acquire land near Canaco because it doesn’t believe the companies selling have proper title.

Northern Rand says its deals with the Tanzanian companies Eden Gold Eden Minerals Limited and Falco Goldfields Limited are done, and that it will be looking to get the $100,000 it paid to a “related entity of the vendors” back. The money, Northern Rand says, was paid to further the deal.

The company’s reversal came after doing due diligence on the vendors’ title to the licenses.

It says that its legal counsel in Tanzania told the company that the vendors did not have title to the vast majority of the licenses that they claimed to have had.

Northern Rand wasn’t immediately available for comment.

Back in September of last year Northern Rand was full of optimism over its acquisition of land in the Handeni district in the Tanga region of eastern Tanzania – the same region where Canaco has had so much success.

The cancellation of the land deal also spells the end of a planned private placement which was to see 15 million units issued to raise $6 million. That money was earmarked for acquisition and exploration costs on the ground.

And the changes at Northern Rand don’t stop there. The company also announced that its president, Denis Hayes has resigned.

In its statement the company says Hayes was chosen as president due to his experience with exploration projects in east Africa. Michelle Gahagan, the current managing director, will step up to serve as president.

The company didn’t rule out the possibility of looking for more exploration play in Africa.

In Toronto on Jan. 14, Northern Rand shares were flat at 42¢ on zero shares traded.