Recognizing the potential of the Tanzanian Lake Victoria goldfields of East Africa early on,
“Attracting a third major gold mining company to invest in the Lake Victoria gold belt illustrates the growing confidence the global mining has in doing business in Tanzania, and the prospectivity of the region,” says Sam Jonah, Ashanti’s CEO.
Last year,
Barrick’s senior vice-president of exploration, Alex Davidson, sees many geological similarities between the Lake Victoria greenstone belt and the Abitibi belt in northern Ontario and Quebec. “With our property position and a core asset like Bulyanhulu, we plan to be in Tanzania for an awfully long time,” he remarked.
Ashanti’s Geita mine will be commissioned this June, with production targeted at 150,000 oz. this year and an average of 500,000 oz. in each of the following five years. Operating cash costs are expected to be below US$180 per oz., whereas capital costs are pegged at US$165 million.
As a conventional open-pit operation, Geita will initially have the capacity to treat 4 million tonnes of ore per year over a minimum of 12 years using conventional gravity concentration and a carbon-in-pulp (CIP) circuit.
Last year, infill and deep drilling boosted the overall resource at Geita to 12 million contained ounces — a 79% increase over the previously estimated 6.7 million oz. Six deposits host measured, indicated and inferred resources totalling 89.2 million tonnes at an average grade of 4.17 grams gold per tonne. The pit optimization of the surface resource in the Nyankanga deposit has outlined a 3.1-million-oz. minable reserve of 19.3 million tonnes grading 5 grams at a stripping ratio of about 8-to-1.
Four other pits host reserves totalling 31.9 million tonnes averaging 2.44 grams, equivalent to 2.5 million contained ounces, based on a gold price of US$325 per oz.
Barrick’s 51.4-sq.-km Bulyanhulu underground mine project is 68 km (by road) from Geita and about 1,100 km northwest of the capital city of Dar es Salaam. The US$280-million mine will begin production by mid-2001. A shaft is being sunk to an 1,100-metre depth. Ore from the highly mechanized mine will be processed in a 2,500-tonne-per-day plant utilizing a combined gravity/flotation circuit. Overall recoveries are expected to average 89%. Mining will be carried out by a combination of drift and fill methods for the narrow areas, and long-hole for the wider portions.
Bulyanhulu is expected to produce 260,000 oz. in 2001, ramping up to 400,000 oz. in 2005. Total cash costs are forecast to average US$160 per oz. in the initial years, declining to US$100 per oz. once the mine is at full capacity in 2005. A mine life of 19 years is anticipated, with costs averaging US$130 per oz.
At the end of 1999, Barrick boosted reserves to 7.5 million oz., up from 3.6 million oz. at the time of acquisition in March 1999. Proven and probable reserves total 15.5 million tonnes grading 15.1 grams, based on a gold price of US$325 per oz. An additional 2.9 million oz. are contained in 3 million tonnes of mineralized resource grading 30.3 grams.
All the reserves are contained in Reef 1, and Davidson is confident that, by the time they are finished, the reserve will well-exceed 10 million oz. in Reef 1. “But what attracted me to the property at first was the fact that although Sutton had demonstrated the potential of Reef 1, not much systematic exploration had been carried out,” said Davidson at the Indaba 2000 mining conference in Cape Town.
With that in mind, Barrick undertook airborne and ground geophysical surveys, as well as geochemical sampling programs, all of which contributed to the defining of known Reefs 2 and 3, as well as the Blue Reef and Shambai Reef. The work also defined several potential new reefs both north and south of Reef 1. Some of the anomalies are up to 3.5 km long.
This year’s plan is to follow-up on the anomalies with 15,000 metres of rotary-air-blast (RAB) drilling, followed by 10,000 metres of core drilling. Barrick is drilling both east and west of the Main zone on Reef 1 and recently pulled an ore intersection 1.6 km east of the shaft.
Barrick acquired over 1,800 sq. km of ground in the Lake Victoria Greenstone belt in March 1999 by purchasing South Africa’s Randgold Resources Tanzanian exploration portfolio for US$4.5 million. Included in that purchase was a 50% interest in the Golden Ridge project, 30 km southeast of Bulyanhulu. Golden Ridge is a joint venture with Pangea. Barrick is the operator and can increase its interest to 65% by completing a bankable feasibility study and securing project financing by September 2000.
Pangea acquired the 174-sq.-km Golden Ridge property in mid-1994 and entered into a joint venture with Randgold in April 1995. The property lies in the Sukumaland greenstone belt and is underlain by folded and thrusted felsic volcanics, pyroclastics and banded iron formations (BIF). Gold mineralization occurs in a variety of styles across the property.
Barrick began a 20,000-metre drilling campaign on the property last fall in a bid to expand the previously defined 1.6-million-oz. resource, particularly on downdip extensions of the mineralized zones. After completing 13,000 metres, Barrick has doubled the resource in the Main (Nyaligongo) zone to 1.6 million oz. gold contained in 15.5 million tonnes grading 3.2 grams; the estimate is based on a cutoff grade of 1.5 grams. The total resource at Golden Ridge now stands at 2.2 million oz. in 10 million tonnes averaging 1.85 grams, which includes satellite zones Hill 4 and Hill 5.
Gold mineralization in the Main zone is contained in the banded iron formation as stratabound sulphide replacement combined with sub-vertical swarms of high-grade quartz veins. Previous studies indicated potential for open-pit mining, whereas metallurgical studies confirmed that the mineralization is amenable either to heap leaching or conventional extraction.
The mineralization on Hill 5 occurs in fault zones of felsic tuffs and BIF and is associated with structural breaks and sulphide replacement. At Hill 4, a broad sulphide zone similar to the one encountered in the Main zone, has been outlined.
Barrick has now turned its attention at Golden Ridge to the geologically similar Siga Hills licence area, 4.5 km to the west. The areas of Lyulyu and Itogwanholo consist of mineralized sheared quartz veins in a brecciated BIF unit. Previous trenching exposed the structure over a strike length of 900 metres and yielded results of up 21 grams over 5 metres and 7.7 grams over 10 metres. Pangea says Barrick also plans to drill-test Hills 4, 5 and 6 this year.
Immediately south and along strike of the Bulyanhulu mine is Pangea’s Bulyanhulu South project, a joint venture with Ashanti, which can earn an initial 51% interest by spending US$4 million on exploration. The major can increase its interest to 60% by completing a bankable feasibility study by October 2000.
“It’s a pretty prospective property,” Ashanti geologist Michael Skead told The Northern Miner during a recent site visit. “It’s going to be in the shadows of a fairly big mine.”
Since acquiring the option in 1995, Ashanti has completed electromagnet
ic, induced-polarization and magnetic geophysical surveys across the property. The IP survey picked up a graphitic sediment horizon, which Ashanti’s geologists believe ties in with Bulyanhulu. There is little outcrop on the property, though there are some artisanal workings in the area.
Ashanti initially completed 197 air-core holes and 216 rotary-air-blast (RAB) holes. The best results included 6.54 grams over 4 metres. Sampling of the artisanal workings has returned 74 grams over 0.5 metre and 9 grams across 12 metres.
The first hole of a 3,000-metre reverse-circulation (RC) drilling program that began earlier this year, undercut the 6.54-gram RAB hole. “Our intention was to intercept fresh rock fairly deep,” said Skead. The fresh rock chips were logged as a fine-to-medium-grained granite intrusion, which, according to Skead, has turned everything on its head. Based on the previous shallow, weathered RAB drilling, the rock had been interpreted to be greenstone and felsic volcanics. Ashanti now interprets “huge tongues of intrusive granite.” The best RAB hole was found to be at the contact between the granite and greenstone. Depending on the results of the first phase of RC drilling, another 5,000 metres are planned.
For centuries, Tanzanian farmers have mined alluvial gold as an alternative source of income, but it wasn’t until German prospectors discovered gold in the Lake Victoria area in 1894 that larger-scale mining began. The first mine, Sekenke, began producing gold in the Iramba district in 1909. Other mines sprung up in the Geita and Musoma districts in 1913, during the German colonial administration. After the British assumed control in the 1920s, deposits were found in the Mwanza and Musoma districts. In 1938, gold production peaked at more than 100,000 oz. Many of these mines were exhausted in the late 1960s and 1970s. Since 1992, the Tanzanian government has been seeking to revive the gold mining industry.
The Golden Pride open-pit mine, now wholly owned by Australian-listed
Situated 200 km south of Lake Victoria in the Nzega district, Golden Pride cost US$48 million to build. In the first seven months of operation, until the end of June 1999, the mine produced 59,415 oz. from 800,000 tonnes of ore at a milled head grade of 2.34 grams and at an average cash cost of US$215 per oz.
In July 1999, Resolute bought out Ashanti’s half-interest in the mine for US$40 million. Ashanti had acquired the interest through the acquisition of Samax Gold in late 1998.
As Resolute continued to fine-tune operations at Golden Pride, the mine produced 57,631 oz. for the quarter ended Dec. 31, 1999, from 526,052 tonnes of milled ore grading 3.59 grams and at a cash cost of US$151 per oz. Recovery averaged 94.8%. By comparison, in the previous 3-month period, ended Sept. 30, 1999, Golden Pride produced 39,314 oz. at US$192 per oz. from 439,478 milled tonnes grading 2.95 grams.
Golden Pride is expected to produce a life-of-mine average of 180,000 oz. per annum at an average cash cost below US$200 per oz. Proven and probable ore reserves at June 30, 1999, stood at 10.6 million tonnes grading 3 grams, equivalent to 1 million contained ounces. An additional measured, indicated and inferred resource was estimated at 13.9 million tonnes averaging 2.54 grams, equal to 1.1 million contained ounces.
The Lake Victoria goldfields lie within the Archean greenstone belts, which underlie part of the Tanzanian Craton. The general geology of this area consists predominantly of mafic and felsic volcanics, BIFs and clastic sediments.
Pangea holds a 70% stake in the promising Tulawaka project, which covers 355 sq. km in the western Lake Victoria district. Montreal-based
The mineralization appears to occur parallel to a regional shear zone, which is possibly controlled by a lithological contact between a quartz-mica schist and a footwall garnet-bearing quartz-mica schist. The gold is intimately associated with a bleached quartz-sericite-schist marker horizon and, to a certain degree, with disseminated sulphide mineralization consisting of pyrite, pyrrhotite and fine-grained arsenopyrite. The East zone can be divided into three segments based on geometry. The east end of the zone is a steeply dipping vein, with a bit of a hangingwall vein. This part of the zone consistently yields multi-ounce values, ranging from 30 to 120 grams. The zone is 2-5 metres in thickness. Diamond drill hole 16 recently extending the zone at depth, intercepting 1.7 metres of 27 grams gold at a downhole depth of 163 metres on section 3+00E.
Highlights from recent drilling on the east end of the zone included:
25.4 grams over 6.63 metres, beginning at a down-hole depth of 123 metres in core hole 49 on section 2+75E;
22.3 grams over 0.42 metre, starting at a depth of 150 metres in core hole 15 on section 2+12E;
88.7 grams over 5.5 metres at 123.5 metres of depth in core hole 20 on section 1+00E; and
44.3 grams over 1.27 metres at 133 metres of depth in core hole 29 on section 0+00.
The western end of the zone is a steeply dipping, sheeted, multi-quartz vein system that remains open. Thicknesses are in the range of 2-5 metres. Recent drilling has extended the mineralization a further 100 metres to the west, where a new vein was discovered about 65 metres south of the main structure. RC hole 510 intersected 2 metres of 9.37 grams at 77 metres down-hole. Other highlights include: 260 grams over 2.66 metres, starting at a depth of 134 metres in core hole 41 on section 3+37W; and 2.07 gram over 5.7 metres beginning at 145 metres of depth in core hole 33 on section 5+12W.
A huge gap exists in the central part of the zone, which was marked by a weak surface geochemical anomaly. Previous drill results have yielded some kicks, including 10 grams over 1 metre and 2.5 grams over 3 metres. While the central area has shown thicknesses of up to 22 metres, values appear to be weaker where the veins pinch and swell.
Pangea began a 6,000-metre drilling program in January, utilizing three rigs. Most of the previous drilling has been RC, and the current program includes diamond drilling designed to firm up the RC work, partially twinning some of the previous holes and infilling a few gaps. Pangea says the core drilling is showing a substantial increase in grade, compared with the average grade of the previously reported RC holes. The current program is also designed to extend the mineralized zone at depth and along strike.
Last year, Pangea discovered high-grade mineralization in the talus overlying the East zone. Systematic RC drilling on 12.5-metre centres defined two areas. A total of 137 holes outlined an average grade of 13.18 grams in an area measuring 250 by 60 metres at an average thickness of 3 metres. A second area measuring 350 by 40 metres at a thickness of 4.18 metres averaged a grade of 10.46 grams in 77 holes. Pangea estimates there are 75,000-80,000 oz. contained in the talus.
At presstime, resources in the East zone totalled 1.6 million tonnes grading 18.96 grams (or 1.01 million oz.). The West zone hosts an additional resource of 736,678 tonnes of 2.9 grams.
Composite samples were collected from the talus, as well as the oxidized, or saprolite, and hard rock sulphide material for preliminary metallurgical testing. The talus and saprolite yielded gold recoveries of 97%; test results for the sulphides were not available.
Pangea has begun an environmental base-line study in preparation for a complete environmental impact study. An in-house prefeasibility stud
y is also in the works.
On Pangea’s adjoining 120-sq.-km Muhama property, RAB drilling will be carried out this year in order to test a geochemical anomaly said to be similar to the one overlying the East zone. Pangea can acquire a 100% interest in the property by making annual cash payments and granting a 5% net profits royalty.
In December 1999, Barrick purchased 1 million units of Pangea priced at $4 per unit, generating $4 million in proceeds. As part of the transaction, Barrick was granted a right of first refusal to match any third-party offer for Pangea’s 70% interest of Tulawaka. At present, Pangea has about $9.5 million in cash and 22.3 million shares outstanding, or 26.8 million on a fully diluted basis.
The junior has other projects in Tanzania, including the 100%-owned Kakindu project east of Tulawaka. It covers past and present artisinal workings. Pangea intends to test this target with 10,000 metres of RAB drilling, followed by deeper RC holes if warranted. It also holds 30% of Kahama, 50 km south of Golden Ridge. AngloGold has the remainder and is operator. The shear-zone-hosted deposit contains a total resource of 19 million tonnes grading 2.85 grams (1.7 million oz.) based on a 1-gram cutoff. It is metallurgically complex and options being investigated include a first-stage bacterial-oxidation leach process to remove copper, followed by a traditional cyanide heap-leach.
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