Tanzanian Gold pins its hope on a three-pronged approach at Buckreef

Tanzanian Gold (TSX: TNX; NYSE: TRX) believes a three-pronged approach to developing its 2-million-ounce Buckreef project could lead to Tanzania’s next national mining success story, CEO Stephen Mullowney tells The Northern Miner. 

Situated about 45 km to the west of Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu gold mine and nearly 35 km south from AngloGold Ashanti’s (NYSE: AU; JSE: ANG) flagship Geita mine in north-central Tanzania, Tanzanian Gold is looking to expand its current 360 tonnes per day processing plant to 1,000 tonnes per day by the end of the year, increasing the yield capacity from about 9,000 oz. of gold to more than 15,000 oz. per year.  

In the past year, subsidiary Buckreef Gold continued to operate the 5 tonnes per hour oxide test plant on the 1600-hectare property. It plans to apply the cash flow to expand its exploration program this year and to advance the metallurgical study of its sulphide development project. The company believes about 90% of Buckreef’s gold resource is held in sulphide material. 

“I don’t know many mining assets in this kind of a position,” Mullowney said in an interview. “There are many good projects, but they are funded from treasuries. We are getting in a position where we can fund it from operating cash. It’s not a large production, but it’s enough to do a lot of work.”  

In December, Buckreef produced 533 oz. of gold through its 360 tonnes per day processing plant. The two other ball mills required to upgrade the plant’s capacity to 1,000 tonnes per day have arrived in the port city of Dar es Salaam, which according to Mullowney, was the most time-consuming aspect of the expansion project.  

He added that the company had gained sufficient knowledge while running the existing processing plant – like knowing where to get the piping or finding the required contractors – which could “de-risk” the expansion.  

The initial mine plan incorporates about 10% of the oxide resources in the Buckreef Main Zone. 

The company has completed 19 drill holes for about 2,367 metres in the sulphide metallurgical program. These sample holes will be shipped for metallurgical testing in the second half of the year.  

Regarding exploration, the company aims to focus on the extension of the Buckreef Main Zone in the northeast, the recently discovered Anfield Zone in the east and infill drilling in Buckreef West and Buckreef Main Zones.  

The company has completed six exploration holes worth 1,716 metres, with a highlight of 50 metres grading 1.8 grams gold per tonne in hole BMRCD308. 

Mullowney joined the company in December 2020. He said the pace at which the project had progressed in the last year would have been “impossible” to replicate in Canada or the United States.  

“We are in a region where we have a lot of support. For instance, the presence of mining contractors helps reduce the total capex. There’s a lot of exploration drillers… there’s a lot of people who know how to do mining… we use shipbuilders to build tanks. We have got good electrical contractors,” said Mullowney.  

In 2020, the company updated Buckreef’s mineral resource estimate to 35.89 million measured and indicated tonnes grading 1.77 grams gold per tonne for 2.04 million contained oz. It also hosts 17.82 million inferred tonnes of 1.11 grams per tonne gold for 635,541 oz. The resource estimates used a cut-off at 0.4 gram per tonne gold.