Sutton negotiating joint venture

After signing an exploration agreement with the Tanzania government, Sutton Resources (VSE) announced it is negotiating with a multinational major mining company to work jointly on part or all of its landholdings in the country.

The agreement gives Sutton an exclusive right to explore and develop mineral deposits in the Kangera area of northwestern Tanzania. The deal covers about 9,600 square miles over an area explored by the United Nations Development Program in the 1970s.

Sutton has already outlined a substantial nickel deposit in the southern corner of the land package. Drilling last year, in combination with results from a United Nations 66,000-ft. drilling program in the 1970s, outlined preliminary reserves of 22 million tons grading 1.22% nickel, 0.17% copper and 0.08% cobalt on the Kabanga deposit. The reserve is contained in a larger deposit estimated at 40.5 million tons grading 1.05% nickel, 0.21% copper and 0.11% cobalt.

Although no details were released, Sutton reports that all the principal terms for a joint venture with the multinational are settled and the two parties are now negotiating some minor details of documentation. Previous work by the United Nations outlined 101 anomalies on the land package, of which only the Kabanga was thoroughly explored. As a result, Sutton sees excellent potential in identifying other deposits along the projected nickel belt to the north.

Sutton estimates minimum exploration expenditures under the agreement with Tanzania at about US$1 million this year.

Planned work includes reviewing United Nations data, selecting targets, and conducting geochemical surveys, mapping and sampling as well as a limited amount of drilling.