Hunting for nickel in Tanzania

Tanzania’s prospective Kabanga nickel belt was first discovered by the United Nations Development Program (UNDP) in the 1970s.

Since then, a number of companies from as far away as Canada and China have gravitated to the country’s nickel belt to hunt for economic deposits.

“Tanzania and (neighbouring) Burundi have several promising nickel properties,” says Peter Kuck, a nickel expert at the U.S. Geological Survey in Virginia.

The question is, are they economic to mine?

The UNDP’s comprehensive geochemical and geophysical program identified a chain of coincident airborne magnetic and geochemical anomalies within a 20-to 30-km-wide northeasterly trending belt extending more than 200 km.

The massive Kabanga sulphide deposit in the northwestern portion of the country’s Kagera belt has drawn the most attention.

Kabanga partners Barrick Gold (ABX-T, ABX-N) and Xstrata (XSRAF-O, XTA-L) are pushing ahead with a US$95-million prefeasibility study.

The Kabanga deposit hosts an indicated resource of 9.7 million tonnes grading 2.37% nickel and an inferred resource of 36.3 million tonnes grading 2.8% nickel.

That makes it similar in size and grade to the world-class Voisey’s Bay mine in Labrador. Prior to mining, the reserves of the Voisey’s Bay Ovoid deposit totalled 32 million tonnes of 2.82% nickel.

Kabanga is about 40 km south of Ngara, near the Burundi border, and about 240 km west of the main regional centre of Mwanza.

Barrick acquired Kabanga in 1999 as part of its takeover of Sutton Resources.

Xstrata came on board in early 2004 to jointly explore the project with Barrick.

Tanzania’s relatively stable political environment and nickel prospects have also attracted juniors like Toronto-headquartered Continental Nickel (CNI-V, CNKDF-O), an exploration newcomer that hopes to find early stage nickel sulphide exploration projects in underexplored regions such as East Africa.

Continental holds a 70% stake in the Nachingwea project, about 400 km south of Dar es Salaam in southeastern Tanzania and about 180 km west of the port city of Mtwara. Australia’s IMX Resources (IXR-A), formerly Gold-stream Mining, owns the remaining 30%.

In just one field season, Continental discovered six near-surface nickel sulphide zones with solid grades at its Nachingwea project in Tanzania.

Now results have come in from the remaining 31 of 53 holes (10,514 metres) drilled last year. Highlights include hole 69 at Target J, which intersected 21 metres grading 3.35% nickel and 0.46% copper, including 7.11% nickel and 0.71% copper over 6.35 metres.

Hole 43 from Target H cut 6.8 metres grading 5.53% nickel and 0.31% copper, including 15.89% nickel and 0.77% copper over 2.15 metres. Hole 60, also of Target H, intersected 5.2 metres grading 4.45% nickel and 3.01% copper.

Hole 44, from a newly discovered zone, called Target M, intersected 1.98% nickel and 0.47% copper over 11.3 metres, including 3.19% nickel and 0.76% copper over 5.3 metres.

The property is situated within the Proterozoic-age Mozambique belt, southeast of the Archean Tanzanian craton, and is underlain by a heterogeneous assemblage of mafic to felsic granulites and gneisses, amphibolites, sedimentary rocks and ultramafic to felsic intrusives.

Continental noted the discovery “indicates the potential of the Mozambique Belt to host magmatic sulphide deposits” and that globally, Proterozoic rifted continental margin settings “are host to a number of significant nickel camps, including Thomson and Raglan in Canada, Pechenga in Russia and Jinchuan in China.”

At Nachingwea, Continental plans to launch a $9.5-million exploration program to follow up previous drilling and further evaluate its landholdings, which are in excess of 7,000 sq. km.