Minieres du Nord shares up 24% on Tanzania drilling

As Minieres du Nord (MDN-T) gets ready to boost production at its Tulawaka open-pit gold mine in Tanzania, drill results for a potential underground mine drove shares up 24% today on a volume of more than 733,000 to 98 apiece.

More than 10,000 metres of diamond drilling done over the last two years will be used in a feasibility study for a mine directly below Tulawaka. MDN has a 30% interest in Tulawaka with Pangea Goldfields, a subsidiary of Barrick Gold (ABX-T, ABX-N).

Barrick shares were up 9 to $34.82 on a volume of 1.95 million.

Highlights from the drilling include:

• 7.2 metres grading 10.1 grams gold per tonne
• 7.1 metres averaging 9.69 grams gold
• 5 metres grading 54.62 grams gold, including 3 metres at 90.21 grams gold
• 13 metres grading5.55 grams gold, including 3 metres grading 12.46 grams gold
• 4.3 metres grading 138.62 grams gold, including 1.30 metres of 450.77 grams gold

MDN president Paul Girard says the results are not surprising.

“It’s like the open pit. The results are very strong and impressive,” he says.

Tulawaka produced almost 140,000 oz. gold in 2006 but Girard says that number will rise in 2007 as the richest part of the orebody is reached.

Girard couldn’t say by how much, except that the increase would be “really significant.”

The feasibility study for the underground mine should be ready by April.

Girard estimates the ramp for the underground mine will be started by the end of 2007, at which time more drilling will be done at the 300, 400 and 500-metre levels.

The drilling results allowed the company to confirm both the continuity and the grade of the main body mineralization. The results also helped define new mineralized lenses in the peripheral zones of the orebody and confirm high-grade mineralization at depth.

MDN has 20 other licences in the Tulawaka area for a total of more than 700 sq. km, but the company’s interest ranges from 65% to 100% in the other properties. MDN has made four discoveries over the last few months and will begin a robust drill program on Feb. 14.

MDN’s 70%-owned Isambara property yielded 10.42 grams gold per tonne over 11 metres, 11.98 grams gold over six metres, 14.93 grams gold over 6 metres and 15.53 grams gold over 8 metres.

Drilling at the 100%-owned Viyonza property yielded 35.05 grams gold over 2 metres, 17.15 grams gold over 3 metres, 7.27 grams gold over 9 metres and 13.34 grams gold over 4 metres.

Initial drilling from the 100%-owned Mnezeki property graded 30.1 grams gold over 6 metres.

And a 1,000 by 900-metre geophysical anomaly was discovered at the 65%-owned Isozibi property that yielded a 2-metres interval grading 4.4 grams gold per tonne.

Girard says MDN will spend $3.5 million to drill more than 10,000 metres on these properties over 2007.

The company plans to exercise 2.7 million warrants this year for nearly $1.8 million.

While the joint venture with Barrick for Tulawaka has been profitable for MDN, the company is interested in looking elsewhere to develop its other projects.

“Barrick is No. 1 in the world but we are small company and our main asset is Tulawaka,” Girard says. “Tulawaka is far from being Barrick’s.”

MDN business development manager Richard Corbo says it’s difficult to improve the company’s market recognition as just a 30%-partner of Barrick.

“It’s not easy to do business with them,” says Corbo. “We have to look at possible alternatives, meaning Barrick is not the only partner we may consider.”