AFRICA — East Africa extends Nyakafuru mineralization

Drilling by East Africa Gold (EAG-V) has extended mineralization below the resources known to exist at the Nyakafuru gold property in the Lake Victoria Goldfields district of northwestern Tanzania.

The Perth, Australia-based junior completed 4,048 metres in late 1998, tightening hole spacings and testing mineralization below a depth of 60 metres. Previous drilling outlined an inferred resource of 260,000 tonnes grading 5.1 grams gold per tonne between that level and surface.

Gold values ranged from 0.2 to 882.4 grams over widths varying from 1 to 48 metres. Several holes, however, failed to return results of any significance, and one was abandoned. Highlights include:

n hole 38, which returned 48 metres (from 12 to 60 metres) averaging 7.3 grams; n hole 70, which returned 38 metres (48-68 metres) averaging 2.84 grams; n hole 68, which returned 32 metres (66-98 metres) averaging 2.77 grams; and n hole 94, which returned 18 metres (91-109 metres) averaging 7.64 grams.

Mineralization is associated with highly sheared and sericitized mafic volcanics. In all, 11 mineralized reef structures have been mapped on the property, with the deposit comprising the two most easterly ones.

Also in December, the company raised $2.8 million in a private placement with Australian-listed Spinifex Gold. In total, 18.5 million units were issued, each of which consists of one share and one warrant. The warrants are exchangeable into shares over two years, at 15 cents per share in the first year and 18 cents in the second.

Proceeds will be used to pay off debt owed to Spinifex and to carry out exploration.

Furthermore, a Swiss investor has purchased an outstanding convertible debenture amounting to $1.9 million. The note represents 10.9 million shares (or 10.4%) of East Africa Goldfields.