Gold exploration companies are having a tough time rekindling investor interest in the current bear market. However, one company that seems to be doing just that is
Tan Range’s principle project, Itetemia, comprises 183 sq. km in an area surrounding the northern and eastern boundaries of Barrick’s Bulyanhulu property, 80 km southwest of Mwanza. In mid-1999, Barrick acquired the right to earn a 60% interest in Itetemia by subscribing to $3 million worth of private placements and arranging project financing for a minimum 100,000-oz.-per-year gold operation.
The first placement, consisting of just under 1.4 million shares priced at 70 each, was carried out in December 1999; a second, consisting of just under 1.2 million shares at 85 each, was recently completed; and the final placement, 1 million shares priced at $1 each, is due in mid-November. Barrick has the option of subscribing for a further 741,000 shares at $1.35 by May 13, 2001. The placements represent a 10% stake in Tan Range, which has agreed to apply 80% of the funds to exploration at Itetemia.
Barrick also has the right to buy a 10% interest currently held by State Mining Corp. (Staminco), a Tanzanian government enterprise, in exchange for paying Tan Range’s portion of all net smelter return (NSR) royalties owed to the government.
Tan Range President Marek Kreczmer told The Northern Miner, during a recent site visit, that Barrick was attracted to Itetemia’s geological potential. The property adjoins two sides of the 10.4-million-oz. Bulyanhulu property and hosts significant gold mineralization in the Golden Horseshoe Reef zone.
Tan Range began exploring Itetemia in 1995 after entering into a joint venture with Staminco. Since then, the Vancouver-based junior has conducted exploration programs that included airborne magnetic and radiometric geophysical surveys; ground electromagnetic, magnetic and induced-polarization (IP) surveys; conventional soil sampling and mobile metal ion geochemistry; and 6,700 metres of rotary-air-blast (RAB) drilling, 7,500 metres of reverse-circulation (RC) drilling in 120 holes, and a total of 35 diamond drill holes.
In the early years, the company was focused on testing the projected southwestern extension of Bulyanhulu Reefs 1 and 2. A limited 2-hole program of shallow diamond drilling in late 1996 intersected a favourable graphitic-pyritic exhalative horizon. One hole cut a 2-metre quartz-carbonate-sulphide vein, which was interpreted to be Reef 2. An estimated 1.3-metre section of the interval was lost as a result of poor core recovery. The remaining 0.59 metre of host tuff assayed 1.14 grams gold per tonne, whereas a 0.14-metre section of the graphitic tuff wall rock returned 2.65 grams.
The second hole, drilled in an area where the Bulyanhulu Reef 1 was interpreted to extend on to the Itetemia licence, intersected an anomalous 13-metre section of nodular pyrite, and this was followed farther down-hole by a 3-metre-thick carbonate-quartz stringer zone of low value.
In March 1997, Tan Range’s attention shifted to a new gold discovery several kilometres to the north, where a local villager had found gold while digging a well. The “Golden Horseshoe” discovery quickly drew more than 3,000 illegal artisinal miners to the area, and soon afterwards more than 180 small-scale pits dotted an area 380 metres long.
By fall, the illegal mining issue had been resolved and Tan Range completed an initial 13-hole program of diamond drilling which confirmed that the gold-bearing zone extends along strike for 300 metres and to a vertical depth of 100 metres.
Further drilling in 1998 expanded the zone along a strike length of 400 metres. A total of 21 core holes had tested the Golden Horseshoe zone prior to the start of the January 2000 drill program. The bulk of that drilling has cut the zone to a vertical depth of only 50 metres.
The Golden Horseshoe Reef zone is a northwesterly striking, stratigraphicaly controlled banded-to-massive-sulphide/quartz horizon with a carbonate component. The horizon occurs at the contact between felsic and mafic volcanic rocks, and dips steeply to the south. A broadly mineralized zone ranges from 20 to 30 metres in width and contains a 2-to-10-metre-thick, higher-grade core of massive sulphides.
The Golden Horseshoe Reef is a dacitic-to-crystal tuff and felsic horizon, with associated massive-sulphide/pyrite/pyrrhotite mineralization. Sulphide stringers and veinlets accompany the massive sulphides, whereas disseminated pyrite mineralization occurs throughout the package.
Golden Horseshoe is interpreted to be a subaqueous volcanogenic massive sulphide event that was remobilized by a northwesterly striking fault structure. “The strongest gold values occur wherever the shear zone is strongly silicified,” said Kreczmer.
The mineralized intercepts, beginning with the most northwesterly drilled hole in Golden Horseshoe, are highlighted in the table below.
An RAB drilling program consisting of 151 holes spotted across seven fences was completed in early 1999. Four of the lines targeted an IP anomaly that was interpreted to represent the northwestern extension of the Golden Horseshoe Reef and related zones. The drilling confirmed low gold values in a sulphide-rich zone along the contact between intermediate and felsic volcanic rocks for a further 1,100 metres along strike of the Golden Horseshoe.
At the end of last year, Barrick completed a low-level, 2,153-line-km airborne electromagnetic and magnetic geophysical survey over Itetemia, while conducting the same type of survey over Bulyanhulu.
Aided by Barrick’s technical support, Tan Range resumed drilling on Itetemia at the end of January of this year, with a 1,400-metre program of five holes. The projected extension of Bulyanhulu’s Reef 1 on to Itetemia was tested by a single hole, which intersected a wide interval of anomalous gold in a quartz feldspar porphyry at the hole’s bottom. A 26.9-metre intercept averaging 0.48 gram included 3 metres of 2.41 grams, starting at a down-hole depth of 214.8 metres. Two holes drilled into the potential Reef 2 extension encountered no significant mineralization.
Tan Range also tested the strike and downdip extension of Golden Horseshoe with two holes. Hole 39 intersected 23 metres averaging 2.33 grams at the 200-metre level, 100 metres deeper than any previous drilling. The 23-metre interval included 5.08 grams over 2.5 metres.
Another hole stepped out 1,250 metres along the northwestern extension, where an RAB hole returned 0.28 gram over 33 metres, including 2 grams of 2 metres. This hole encountered anomalous gold mineralization in what was determined to be the same horizon as the Golden Horseshoe zone.
The company is set to begin an $800,000, 6-month exploration program at Itetemia, consisting of further RAB, RC and core drilling. The RAB and RC drilling will be targeting several geochemical anomalies, while the core drilling will focus on Golden Horseshoe.
In the meantime, Newmont has just completed a follow-up 6,000-metre RAB drilling program on the 55-sq.-km Luhala concession, some 40 km east of Itetemia in an area of scattered greenstones. Assay results are pending. Kreczmer said he expects Newmont to begin diamond and RC drilling in June.
Luhala is one of four properties Newmont optioned from Tan Range in 1999, the others being Kabahelele, Mnekezi and Mulehe. For each individual property, Newmont can earn an initial 60% interest by spending US$1.5 million on exploration over three years. The major can earn a further 10% in each property by completing a bankable feasibility study.
Luhala centres on three silicified hills that rise to a height of 60-100 metres above the surrounding plains. Previous work by Tan Range identified a large (6.2-sq.-km) geochemical gold anomaly centring on the Luhala Hills, where stockwork gold mineralization appears to be related to felsic porphyry bodies that have intruded tuffaceous rocks. One in five soil samples yielded values greater than 100 parts per billion. Previous sampling of trenches returned grades of up to 22.1 grams across 2.1 metres, and one of three holes drilled in 1997 cut a 27-metre interval grading 1.7 grams.
Earlier this year, Newmont completed a first-phase RAB program of 106 holes totalling 5,200 metres in four fences across the hills covering an area measuring 1,600 by 2,400 metres. This program intersected quartz breccia zones corresponding to the soil anomaly. The best single intercept from hole LRB-105 returned 8 metres averaging 4.5 grams. The widest single intercept was 25 metres grading 2.31 grams, with the last metre of the hole assaying 6.22 grams in quartz veins.
Under option to cash-strapped Ashanti, Tan Range’s Geita East property comprises 100 sq. km about 20 km northwest of Itetemia and immediately southeast of the 12-million-oz. Geita mine property. Ashanti can earn a 60% stake by completing a bankable feasibility study by the end of 2002.
Last year, a program of limited RAB drilling in the southwestern corner of the property proved unsuccessful. Further drilling is expected to target the northwestern portion.
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