MINING IN AFRICA SPECIAL — Sutton follows nickel, gold

A pair of deposits in Tanzania — one nickel and the other gold — are providing encouraging signs for Sutton Resources (VSE).

The Kabanga nickel deposit, west of Lake Victoria in the country’s northwest, sits at an elevation of about 1,600 metres. Sutton’s mineral agreements cover Kabanga and base metal exploration rights along the Kagera belt; the junior’s joint-venture partner for these projects is BHP of Australia, which acts as operator.

Drilling of the main Kabanga nickel deposit indicates that the mafic/ultramafic body is an elongated, differentiated complex; it is shaped like an overturned U in cross-section and dips to the northwest. The structure is 200 to 300 metres thick, of similar width, and extends for at least 1 km, with the same general northeast trend and shallow northeast plunge as the regional folding.

Geophysical surveys and drilling, the company says, have shown the deposit to be part of a chain of 5-8 similar intrusions aligned northeasterly over 8 km. The iron-nickel-cobalt-copper mineralization occurs as disseminated and massive sulphides within the ultramafic core and as sill-like massive sulphide layers in the gabbro and metasediment. The principal sulphide is pyrrhotite.

Active at the project since 1991, Sutton has calculated preliminary reserve estimates (see accompanying box) using different cutoff grades. Sutton believes the potential for substantial tonnage increases are excellent. The company’s Bulyanhulu gold project sits in the Lake Victoria goldfields of north-central Tanzania.

Work from previous exploration efforts indicates that portions of three reef structures, to a depth of 275 metres, may host up to 1.5 million oz., the company says.

Mining by artisans in the 1970s gave way to exploration work by a state-owned entity. Outokumpu of Finland was part of an exploration consortium in the early 1980s, and Placer Dome performed some work during the 1989-91 period. More than 200 holes were drilled in all, and at least five veins were uncovered, three of which were drilled.

Sutton says Bulyanhulu lies within the Nyanizian Greenstone belt, part of the extensive Archean craton of east Africa. The belt is composed of intermediate volcanic rocks, and sediments. The area has undergone two major fold events. The host vein-shears (or reefs) are 600-700 metres apart. To date, reef 1 + 0 has undergone the most drilling, which has established the continuity of this structure over a 1.6-km strike length and to a depth of 250 metres. The vein-shear averages 4.3 metres in true width.

Future work at Bulyanhulu includes drilling.

Cutoff Tons Nickel Copper Cobalt

(000s) % % %

0.50%Ni 25,467 1.19 0.20 0.10

0.75%Ni 17,996 1.42 0.23 0.11

1.00%Ni 11,736 1.72 0.26 0.12