Pencari Mining quietly builds land holding in Madagascar

Just 15% of the land available for mining in Madagascar is unclaimed and it’s going fast, the country’s minister of energy and mines, Elyse Razaka, told The Northern Miner during an interview at the recent Toronto convention of the Prospectors & Developers Association of Canada.

So it’s no surprise that companies like Pencari Mining (PMC-V) are scrambling to enlarge their property positions on this tropical island, the world’s fourth largest.

“It is first come, first served,” says Marc-Andre Boudreau, Pencari’s chief geologist, who describes the island in the Indian Ocean off the southeastern coast of Africa as a “geological paradise.”

Adrian Rolke, Pencari’s Vancouver-based president and chief executive, adds that “it’s not realistic to find many new areas any longer” and things are moving “very quickly.”

Madagascar is eager to develop its mining industry after years of underinvestment and hopes to boost mining exports from US$40 million in 2007 to US$300 million by 2012.

Pencari currently has five gold and eight uranium properties in Madagascar and announced today that it has boosted its land holdings at the Itea gold property fivefold to 125 sq. km.

The additional land allows Pencari to tie together its Itea and Tsinjava blocks into a single contiguous area that covers the projected extent of the gold-bearing schist horizon.

Work at Itea has identified an extensive gold soil anomaly that extends to the southwestern limit of the original Itea block, towards the Tsinjava block, 12 km to the southwest.

Exploration at Tsinjava has also detected a geophysical anomaly that is coincident with an area of old workings and trenches. Additional trenches, pits and alluvial workings extend northeast towards Itea, onto ground covered by the new concessions.

Pencari says the goal at Itea is a bulk tonnage, economic gold deposit.

Pencari has targeted exploration work on the Itea block where a gold-bearing mica schist unit has been found within a series of old cuts, pits and trenches dating from the early 1900s, then traced for 2.5 km using a combination of magnetic and induced polarization (IP) geophysical surveys, geological mapping, and soil geochemistry.

Reconnaissance on the Tsinjava block has also found old workings, which suggest mineralization is hosted within similar looking mica schist units as at Itea. A preliminary IP survey has detected a chargeability anomaly coincident with these workings.

Pencari is now moving ahead with its first-ever drilling at Itea and will accelerate mapping, soil sampling and trenching at Tsinjava with an eye to start drilling there as well this year.

In 1908 about 60 kg of gold were extracted from the Itea deposit in the central highlands in the northern block of the property by orpailleur-type diggings. The workings extended only to a depth of about 22 metres. No significant exploration has been done on the property since 1940.

Gold occurs both as fine free gold and with pyrite. Pencari says gold recoveries of over 90% can be achieved by fine grinding and physical concentration and no cyanidation is required.

At mid-day in Toronto, Pencari’s shares were trading up 2 apiece at 28.5 on a trading volume of 40,800.

The Vancouver-based junior exploration company has about 38.8 million shares outstanding and a 52-week trading range of 16.5 to 89 a share.

The Precambrian rocks in the eastern part of the island closely resemble those seen in southern India’s Kolar gold fields.

Madagascar, a former French colony that is slightly larger than the size of France, extends over 1,570 km from north to south and over a width of 575 km.

Its mineral resources include silver and platinum group metals, uranium, coal, chrome, nickel, titanium, cobalt and precious and semi-precious stones such as emeralds, rubies and sapphires.

Other companies active in Madagascar include Rio Tinto (ilmenite); Dynatec Corp (nickel, cobalt); Pan African Mining; (gold, uranium, precious stones, base metals and industrial commodities) Alcan (bauxite); and Resources Majescor (diamonds).