Pan African aims to prove up Madagascar gold

Pan African Mining (PAF-V, PAFRF-O) is doing its part to build on the mining momentum taking hold of Madagascar.

The world’s fourth-largest island currently has two heavyweights operating on its soil, with Rio Tinto (RTP-N, RIO-L) running an industrial minerals complex there, and Sherritt International (S-T, SHERF-O) pushing towards production at the Ambatovy nickel project.

The big dollar investments have come on the heels of a stabilizing political situation — an improvement coinciding with the arrival of self-made businessman Marc Ravalomanana as president.

Ravalomanana, who took office in 2002, credits a World Bank loan with turning him from a yogurt salesman into a dairy factory owner, and his reign has been marked by intense infrastructure efforts and the increased presence of the World Bank to help stimulate growth.

In 2006, the Malagasy people elected Ravalomanana for another 5-year term.

At a conference held in Toronto in late October, officials from the Malagasy government assured a group of prospective investors that the country was hungry for investment dollars.

Towards that end, the government created the Economic Development Board of Madagascar to attract foreign dollars.

Officials say the endemic poverty in a nation where 75% of the population lives in rural areas, is best targeted by bringing investment to those areas. Such a mandate clearly dovetails well with that of the mining industry and officials said that the government is actively promoting mineral exploration and is taking measures to reduce administrative procedures for investors.

The fortunes of Pan African will play a large part in whether such economic aims become reality. That’s because the company has carved out a massive presence in terms ofmineral exploration claims.

In all, Pan African has 22 properties spanning more than 7,500 sq. km of gold, base metals, coal, diamonds and precious gem claims, and another 5,000 sq. km of uranium claims.

Its key projects, however, are the Dabolava property — or the Mountain of Gold — and the Tranomaro uranium project.

Dabolava sits in the central-west plateau of the country, 200 km west of the capital, Antananarivo.

So far, drilling has focused on Dabolava East, but that could soon change as Pan African recently finished an induced-polarization survey of 900 sq. km of land to try and distinguish patterns similar to the gold-bearing ones at Dabolava East. At Dabolava East, highlights from the most recent assays included 9.5 metres grading 11.99 grams gold per tonne and 2.33 metres grading 5.1 grams gold.

Drilling has been testing a known mineralized zone that returned 32.25 grams gold over 0.9 metre in a 2005 program. The company is testing both the zone near its shear boundaries and the centre of the zone, where Pan African says larger tonnage potential exists.

Past highlights from drilling at the project included 5.5 metres grading 50.81 grams gold, and 5.6 metres of 9.51 grams gold.

Gold is contained in quartz veins, with most intersects coming from a mineralized zone that extends over a 10-km strike length.

As for Tranomaro, it is the primary target in the company’s large uranium portfolio.

All uranium projects, however, are operated as a joint venture between Pan African and the government. The two entities make up PAM Atomique Sarl, with Pan African holding an 80% stake and the government taking up the remaining 20%.

Tranomaro extends over 1,287 sq. km and Pan African has drilled 10 holes to a depth of between 70 and 130 metres at an old French mine there known as No. 37.

Results from the drill program show uranium mineralization continues below the floor of the old open-pit mine and were highlighted by 5 metres grading 0.2022% U308, 3 metres grading 0.3217% U308 and 3 metres grading 0.24% U308.

Results from the initial five holes were released in June 2007 and were highlighted by 17.2 metres grading 0.4329% U308.

Pan African shares were trading at $1.68 in Toronto at presstime and have traded between $1.62-3.59 over the last 52 weeks. The company has 26.3 million shares outstanding.