Pencari quietly builds Madagascar holdings;Pencari quietly builds Madagascar holdings

About 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 and Developers Association of Canada.

So it’s no surprise that companies like Pencari Mining (PMC-V, PMCFF-O) 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 president and chief executive, adds that “it’s not realistic to find many new areas any longer” and things are moving quickly.

“People have already gone over there in a big way,” he adds. “A large portion of Madagascar is protected for ecological reasons — mainly in the north and along the coast.”

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

Pencari currently has five gold and eight uranium properties — or a total of 32,000 sq. km of landholdings — in the country and recently announced that it has boosted its claims 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 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 charge-ability 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 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 only extended to about 22 metres depth. 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.

Pencari’s stock is currently trading at about 28.5 per share.

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

Half of Madagascar’s land mass came from India and the other half from Africa, Pencari notes. 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 and extends over 1,570 km from north to south and over a width of 575 km, has highly prospective geology.

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 (RTP-N, RIO-L), with an ilmenite project and bauxite interests acquired through its takeover of Alcan; Sherritt International (S-T, SHERF-O), with the Ambatovy nickel-cobalt project, acquired with its buyout of Dynatec Corp.; Pan African Mining (PAF-V, PAFRF-O), holds gold, uranium, precious stones, base metals and industrial commodities projects; and Majescor Resources (MAJ-V, RSMJF-O), exploring for diamonds.