By Nathan Pearson
Resourcexinvestor.com
Tembo Gold Corp. (TSX-V: TEM) has reached a pivotal point in its progression as one of the most exciting new gold plays to be focused on Africa’s prolific Lake Victoria goldfield, a geological terrain and mining belt hosting several multi-million ounce deposits. February 22n 2012 saw the company’s IPO and Tembo is now ready to embark upon a 12 month, 87,000 metre combined RC and diamond drilling program on its flagship Tembo Gold property. Research Associates at Resourcex have conducted a thourough survey process of the opinion of investors and analysts in the market. Our findings show across more than 300 hundred opinion polls with accredited investors, is that 85% percent of surveyed investors believe anything under $1.40 per share on the first day of trading is a buy and 70% percent of investors believe the market will see a closing share price of approximiately 1.50 per share on the companies initial day of trading.
Gloriously Located
Covering 11,500 contiguous hectares of gloriously golden African land, the Tembo Gold property consists of 73,000ha of licences and 42,000ha of applications, even at first glance, has the makings of a highly prospective gold asset. Location is a key component in the success of any prospective property and in this regard, Tembo has hit a home run.
The Tembo Gold property is located adjacent and along strike to African Barrick’s 20 million ounce Bulyanhulu Gold Mine in the prolific Lake Victoria Greenstone Belt, an established mining camp boasting 50 million ounces of gold resources, a well understood geological terrain with parallels worldwide and easy year-round access in a comfortable operating environment. In fact, the Bulyanhulu structures and geology that made the African Barrick mine the success that it is, extends to the north and west onto the Tembo project.
Significant Artisanal Activity
Historical work on Tembo from 1997 to 2008 has seen over 1,000m of percussion drilling, over 99,000m of RAB drilling, more than 6,505 of RC drilling and 1,866m of diamond drilling in 12 holes on the property. But what’s proving even more encouraging on Tembo is the significant artisanal activity taking place on the property.
Currently, there are over 2,000 artisanal miners operating in over 100 active shafts on Tembo, mining to depths in excess of 70 metres along more than 10 kilometres of Bulyanhulu parallel structures. With milling on site, high grade gold from 9 to 20 grams per tonne is being excavated and extracted from robust well-mineralised shear zones containing prominent quartz veining and abundant evidence of sulphide.
These extensive artisanal operations have been productive on the property for more than 30 years. With current weekly production figures reaching 140 to 350 ounces, the long-running and on-going progression of artisanal activity on Tembo confirms further gold mineralization and hints at serious promise for early drilling success and resource definition.
Targets
Aside from the highly encouraging boost the artisanal activity lends to the promise of Tembo, the fruits of the artisanal labour provide key information for establishing and prioritising targets.
High resolution airborne magnetics demonstrated between 20 and 30 well developed linear structures interpreted as potentially mineralised shear zones and contacts which have associated gold in soil anomalism, many of which are host to artisanal operations. Limited reverse circulation (6,000m) and diamond drilling (1,800m) has returned excellent results testing less than 1% of identified structures with best results ranging from 9.8 grams per tonne over 3.4 metres and 10.25 grams per tonne over 3.5 metres to 36.0 grams per tonne over 1.0 metres.
As a result of a re-interpretation of the airborne magnetics and surface exploration database, Tembo has identified at least 6 high priority target areas set for fast track development through a 15 month 87,000 metre combined RC and diamond drilling program.
With the IPO now underway, Tembo is ready to get its hands dirty as it focuses on the extensively mined Nyakagwe Corridor and Buly trend structures. The drill program will initially consist of one diamond drill rig with an average down hole depth estimated at 200 metres (max 400 metres) and one percussion RC drill rig with an average down hole depth estimated at 150 metres (max 300 metres). Intersections are targeted at vertical depths of 50 metres, 100 metres, 150 metres and 200 metres for both drilling techniques during the first phase of drilling.
Mining in Tanzania
With relatively modern-day gold discoveries in Tanzania dating back to 1894, it should come as no surprise that the country has slowly but surely progressed to the status of third largest gold producer in Africa, behind South Africa and Mali. This is thanks in large part to the opening of the Bulyanhulu mine in 2001, which is currently Tanzania’s deepest mine, has a mine life of 25 years remaining and is, of course, neighbouring and along strike to Tembo’s very own Tembo Gold property.
Discovered by accident in the 1970s by a cow herder, Bulyanhulu is the largest artisanal mining operation Tanzania has ever seen. The property was drilled by Stamico, then Outokumpu and Placer Dome before Sutton Resources proved a 3.6 million ounce indicated resource. Barrick acquired the property in 1999 when it purchased Sutton Resources for US$350 (C$500M) million and went on to grow the reserves to 11 million ounces and the resources to 20 million ounces. Impressively, Bulyanhulu boasts an operating capacity of 3,300 tpd and an annual production of over 260,000 ounces.
African Barrick has been doing so well with Bulyanhulu in fact, that it posted a record Q3 profit this year on the back of higher production and high gold prices. The company more than doubled its net profit for the quarter, posting a net profit of $102 million and earnings per share of 24.9 cents, a 156% increase from the same period last year. No doubt about it, Tembo is keeping good company and if its neighbour’s success is anything to go by, the road ahead could be particularly exciting for the Canadian based company.
Management
Guiding Tembo into its newest chapter as a publically trading company is an impressively high quality management team.
President and CEO is David Scott who brings over 32 years of African exploration and mining experience to the table. Having spent 13 of those 32 years in Tanzania, Scott has garnered extensive knowledge of Tanzanian geology, including direct experience at Bulyanhulu after a stint as Technical Services Manager for Barrick’s subsidiary Kahama Mining Corp, a role in which he was responsible for all Technical Services at Bulyanhulu, including on-mine exploration activities.
Former COO of African Barrick Gold and a member of the executive team that took ABG public is Tembo Chairman Dave Anthony. Anthony has 10 years experience in Tanzania under his belt, during which he designed, constructed and was responsible for the operation of 3 of 4 world class Barrick operations – Bulyanhulu, Buzwagi and Tulawaka. He and Scott have both built up substantial government and industry contacts in Tanzania.
Along with its stellar Board of Directors, Tembo is also working with African experts The Mineral Corporation (TMC). A leading senior advisor to African and International resources companies, TMC was awarded Tembo’s exploration contract and has already deployed its team. Striving to provide a unique combination of skills and experience across a diverse range of commodities and geographies, TMC’s senior advisors include John Murphy, Director, with 20 years professional geological experience in base and precious metal exploration and mining in Africa and Dave Kershaw, Senior Geological Advisor, with 31 years professional geological experience in the African mining and exploration field. Safe to say that, whatever the future throws at them, Tembo is in very strong managerial hands.
With 40 percent insider ownership and just ~40 million shares fully dilluted ,~$13 million in cash, and Tembo is entering its most exciting period yet with a very healthy treasury in tow. Sitting on 11,000 hectares of historically promising land that is not only in the vicinity of, but actually along strike to ABG’s 20 million ounce mine, Tembo couldn’t have manoeuvred itself into a better position. With the IPO launched and its exploration team deployed, 2012 – regardless of what the Mayans say – promises to be a special year for Tembo Gold.
Follow the company’s progress at www.tembogold.com
There are no comments yet