Tan Range targets Tanzanian greenstone belts

With a portfolio of promising properties in an emerging gold mining camp and the financial backing of three major producers, Tan Range Exploration (TNX-V) is intensifying its efforts to find a major gold deposit in East Africa.

Formed in 1990, the company began exploring the region in 1992, when it optioned several diamond, gold and mineral sand concessions in Tanzania. Today, Tan Range has interests in 10 properties in East Africa — six in Tanzania, three in Ethiopia and one in Zambia.

The most advanced of these is the 136-sq.-km Itetemia gold project, which Tan Range began exploring in 1994. At presstime, the company was about to launch a 1,500-metre diamond drill program. The property is in the Lake Victoria greenstone region, adjacent to the huge (8.8-million-oz.) Bulyanhulu gold deposit of Barrick Gold (ABX-T).

The first whiff of success came in the latter part of 1997, when a 13-hole drill program confirmed the presence of a potentially significant gold resource along the Golden Horseshoe Reef zone in the southeastern portion of Itetemia. Further drilling in 1998 expanded this zone along a 380-metre strike length, to a depth of 100 metres. Gold grades vary from 0.96 to 14.78 grams per tonne over core lengths ranging from 1.1 to 33 metres. In early 1999, Tan Range tested the mineralized extensions of the Golden Horseshoe Reef zone with 151 rotary-air-blast (RAB) holes totalling 6,659 metres. The drilling traced the gold-bearing horizon for 1.5 km along strike, returning values of up to 2 grams.

Mineralization in the Golden Horseshoe Reef zone occurs in a banded-to-massive quartz-carbonate-sulphide horizon at the contact of felsic and mafic volcanic rocks. The horizon has a true thickness of 4-8 metres, averages 4 grams gold per tonne and remains open in all directions.

In March 1999, Barrick entered the scene by acquiring the Bulyanhulu property in a $430-million all-share buy-out of Sutton Resources. By June, the Itetemia property had caught the eye of its new neighbour, and a deal was struck that would allow Barrick to earn a 60% stake in the property by providing Tan Range with $3 million through three private placements and, in the event of a production decision, arranging project financing. The first placement, consisting of 1.4 million shares at 70 each, was completed in December 1999; the second, consisting of 1.2 million shares at 85 each, is due in mid-June 2000, with the final 1 million shares at $1 payable by December of this year. Under the deal, 80% of the funds must be applied to exploration of the Itetemia property. Assuming a sizable resource is outlined, processing would take place at the Bulyanhulu mine.

With Barrick’s financing and technical advice, Tan Range’s first drill target is the southeastern extension of the Bulyanhulu deposit, some 3 km along strike of the mine and 2.5 km south of the Golden Horseshoe Reef zone. A small drill program in 1997 intersected the graphitic-pyritic exhalitive horizon that hosts the multi-million-ounce Bulyanhulu deposit.

Hole 1 intersected Bulyanhulu Reef No. 2, returning 1.1 grams gold over 0.6 metre, as well as a 0.1-metre interval of graphitic tuff wallrock that yielded 2.65 grams gold. Hole 2 is believed to have cut Reef No. 1 but failed to return any economic gold grades. These results, combined with airborne and ground geophysical data, indicate that the favourable marker horizon extends for several kilometres to the northwest along the property.

Following the drill-testing of the Bulyanhulu southern extension, Tan Range will move the rig back to the Golden Horseshoe Reef zone, where additional drilling will test for mineralization along strike and at depth.

Surrounding the Itetemia property are the Kabahelele, Luhala, Mnekezi and Mulehe gold concessions, which Tan Range optioned to U.S.-based Newmont Mining (NEM-N) in August 1999. Newmont, which was attracted by the 15 km of favourable strike on the Tulawaka-Matabi structure, can earn up to 60% on each concession by spending US$1.5 million on each property over a 3-year period. The major can gather another 10% by completing a bankable feasibility study.

Newmont’s current target is the 55-sq.-km Luhala concession, some 40 km east of Itetemia in an area of scattered greenstones. A 5,000-metre RAB drill program will test the 60-metre-high Luhala Hills prospect, where a 2.5-by-2.5-km soil geochemical anomaly with coincidental underground workings has been outlined. In this area, volcanic quartz stockworks have returned up to 20 grams gold in channel samples, whereas soil samples returned up to 6 grams gold.

Kabahelele

According to Tan Range, gold mineralization is related to late-stage felsic porphyry bodies that have intruded tuffaceous rocks, producing an extensive breccia system. In 1997, the junior drill-tested the area with three shallow holes, totalling 505 metres. Core recoveries proved unreliable. The best results came from hole 5, which cut 1.76 grams gold over 27 metres in intermediate volcanics.

Some 55 km east of Itetemia lies the 31-sq.-km Kabahelele property, which is centred on the Archean Rwamagaza greenstone belt. In 1994, Tan Range identified two promising geochemical anomalies over areas of artisanal workings known as Iparamasa and Kinsabe.

Tan Range drill-tested the Iparamasa workings with 15 holes in the mid-1990s. Although initial drilling returned up to 4.3 grams gold over 4 metres, subsequent holes failed to meet expectations, hitting only up to 1.3 grams gold over 0.86 metre. During the same time period, the Kinsabe target was tested by 10 reverse-circulation holes and four diamond drill holes. The highest intercept was 13.6 grams gold over 1 metre from saprolite, and 9 grams over 0.3 metre from the underlying Archean volcanics.

Another 20 km to the east lies the 116-sq.-km Mnekezi concession. Sandwiched between Ashanti Goldfields‘ (ASL-N) Matabe gold prospect on the east and Pangea Goldfields‘ (PGD-T) Tuluwaka property on the west, the property is underlain by west-northwesterly trending Nyanzian greenstones. Newmont completed 16,000 metres of RAB drilling on the property earlier this year. Some results are still pending, though, to date, the most interesting anomaly outlined appears to be a sequence of five holes over a 400-metre area that hit up to 0.24 gram gold over 5 metres.

At the 96-sq.-km Mulehe concession, situated 40 km southeast of Mnekezi, only reconnaissance geological mapping, prospecting and geochemical sampling have been completed. The most striking features identified to date are three major northeasterly trending structures identified from airborne geophysics.

Geita East

Under option to financially troubled Ashanti, Tan Range’s Geita East property covers 100 sq. km of prime real estate, about 20 km northwest of Itetemia and immediately southeast of the Geita mine.

The mine has been put on the auction block, following heavy losses incurred by Ashanti as a result of its hedging program. The company needs about US$100 million to complete construction at Geita, which is scheduled to enter production in the third quarter. At full production, the mine is expected to crank out up to 500,000 oz. annually at operating costs of less than US$180 per oz. Proposed suitors for the Geita mine include Placer Dome (PDG-T), Anglo American (aauk-q), Anglo Gold (AU-N) and Barrick. Tan Range’s chief executive officer, Marek Kreczmer, believes that any sale by Ashanti will include all of its Tanzanian assets, including the option agreement on Gieta East.

In the meantime, Ashanti has scheduled a 5,000-to-10,000-metre RAB drill program, which will target the northern portion of Geita East.

Geologically, Geita East is underlain by a sequence of volcanic rocks, banded iron formations and felsic intrusive rocks. In the northern part of the property, the banded iron formations contain numerous gold showings.

Previous exploration was concentrated in the central section of the property, where a northwesterly trending sequence of felsic volcanics and graphite tuffs are host to a strong 6-km-long geochemical anomaly. However, subsequent drilling failed to cut any significant gold values.

Ashanti can earn a 60% interest in the property by completing a bankable feasibility study by the end of 2002.

Meanwhile, Tan Range has suspended exploration activities on three properties in Ethiopia: Hagere Mariam (111 sq. km); Tulu Kapi (19 sq. km); and Tulu Dimtu (76 sq. km). Work has also ceased at the Chetina property in Zambia.

Tan Range has 41.6 million fully diluted shares and recently traded at 50.