Uganda Gold to earn majority interest in Kilembe mine

Vancouver — Uganda Gold Mining (UGM-V) signed an agreement with Kilembe Mines to earn a 70% interest in the Kilembe copper-cobalt mine. The Kilembe property, situated in the foothills of the Rwenzori Mountains of western Uganda in central Africa has been held by Kilembe Mines since 1975.

By financing and conducting exploration to the bankable feasibility stage, Uganda Gold can earn a 70% interest in the property. The company wants to confirm the existing resources and outline extensions before exploring other known deposits, while doing metallurgical testing on samples from the mine and tailings.

After visiting the site in July 2004, independent consultants, Rosco Postle Associates finalized a NI 43-101 compliant report on the property.

Falconbridge produced over 16 million tonnes of ore grading 1.98% copper and 0.17% cobalt between 1956 and 1977. An estimate in 1979 outlined 4.1 million tonnes grading 1.77% copper in what would now be roughly equivalent to measured and indicated resource categories as defined by National Instrument 43-101.

Although cobalt assays were not conducted after the late 1950s, the average head grade was 0.17% cobalt over the life of the mine.

The most recent resource estimate used a geostatistical block model to outline an in-situ resource of 3.15 million tonnes grading 0.18% cobalt and 0.97% copper within the Lower Bukangama and Eastern zones, in 1997.

The deal also includes three tailings dams which are estimated to contain some 5.2 million tonnes of 0.12% cobalt and 0.18% copper in historical resources.