EX-99.1 2 exh_991.htm EXHIBIT 99.1

EXHIBIT 99.1

 

  NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

 

 

 

 

Amended NATIONAL INSTRUMENT 43-101

Independent Technical Report Mineral Reserves Estimate and Pre-Feasibility Study on the Buckreef Gold Mine Project, Tanzania,

East Africa

 

for

TanzanianRoyalty Exploration Corporation (TRX)

 

 

 

 

Compiled by:

Wenceslaus Kutekwatekwa

BSc (Hons) Mining Eng. MBA, FSAIMM, FIoDZ, MAMMZ, MPMIZ

(Mining Consultant)

 

Frank Crundwell

BSc (Eng.) Chem, BSc (Hons), MSc (Eng.) Chem, PhD, Pr Eng, FSAIMM, FIChemE

(Metallurgical Consultant)

 

Virimai Projects

Reference No: VPTRX001-2018

Effective Date: 26th June 2018

Virimai Investments (Pvt) Ltd

30 Tunsgate Road, P.O. Box 1022,

Mount Pleasant, Harare, Zimbabwe,

Telephone +236 4 853 267

Mobile: +263 77 225 9821

www.virimaiprojects.co.zw

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

DATE AND SIGNATURES

This Report titled “Amended Independent Technical Mining Reserve Estimate Pre-Feasibility Study on the Buckreef Gold Mine Project, Tanzania, East Africa” prepared for Tanzanian Royalty Exploration Corporation has an effective date of 26th June 2018, and has been prepared and signed on 26th June 2018 by the following authors, as shown in the Appendices:

 

QUALIFIED PERSONS:

 

Wenceslaus Kutekwatekwa (Mining Engineer, Mining and Project Management Consultant)

 

BSc Hons (Mining Eng.), MBA, FSAIMM, FIoDZ, MAMMZ, MPMIZ

 

Frank Crundwell (Metallurgy Consultant)

BSc (Hons) Maths of Finance. BSc (Chemical Eng.), MSc (Chemical Eng.), PhD (Chemical Eng.) PrEng. FSAIMM, FIChemE

 

CONTRIBUTING AUTHORS:

 

Arimon Ngilazi (Resource Geologists)

 

BSc (Geology & Physics), BSC Hons Geology, CFSG (Mining Geostatistics) MBA, MSAIMM, MAusIMM, MGASA, MGSZ

 

Wonder Mutematsaka (Snr Mining Engineer)

 

BSc (Mining Eng.), ARSM, MBL Pr Eng. MASME, MZIE,

 

Clarence Ndunguru (Mining Engineer)

 

BSc (Mining Eng.), MSAIMM, MAusIMM

 

Peter Zizhou (Geologist)

 

MSc (Geology), BSc Hons (Geology), Pri. Sci. Nat

 

 

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

Table of Contents

 

1.EXECUTIVE SUMMARY 22

 

1.1            INTRODUCTION  22

 

1.2PURPOSE OF THIS REPORT 22

 

1.3PROJECT LOCATION 23

 

1.4MINERAL TENURE 23

 

  1.4.1 PERMITS AND PERMITTING PROCESS 24

 

1.5GEOLOGY AND HISTORY OF EXPLORATION 26

 

1.5.1REGIONAL GEOLOGY 26

 

1.5.2LOCAL GEOLOGY 26

 

1.5.3MINERALIZATION 26

 

1.6DATABASE 27

 

1.7MINERAL RESOURCES 27

 

1.8MINE DESIGN AND MINERAL RESERVES 29

 

1.9MINE DEVELOPMENT AND OPERATIONS 31

 

1.10MINERAL PROCESS AND METALLURGICAL TESTING 33

 

1.11CAPITAL AND OPERATING COST ESTIMATES 33

 

1.11.1CAPITAL COSTS 33

 

1.11.2OPERATING COSTS 34

 

1.12PROJECT ECONOMICS 35

 

1.13CONCLUSIONS 36

 

1.14RECOMMENDATIONS 36

 

2.INTRODUCTION 37

 

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2.1SCOPE OF STUDY 37

 

2.2EFFECTIVE DATES AND DECLARATION 38

 

2.3TERMS OF REFERENCE 38

 

2.4SOURCES OF INFORMATION 40

 

2.5SITE VISIT 41

 

2.6ACKNOWLEDGEMENT 41

 

3.RELIANCE ON OTHER EXPERTS 42

 

3.1REPORT RESPONSIBILITY AND QUALIFIED PERSONS 42

 

4.PROPERTY DESCRIPTION AND LOCATION 43

 

4.1MINERAL TENURE 43

 

4.2MINING RIGHTS IN TANZANIA 44

 

4.2.1BASIS FOR MINERAL TITLE 44

 

4.2.2EXPLORATION PERMITS (RIGHTS AND OBLIGATION) 44

 

4.2.3PROJECT MINING PERMITS 45

 

4.2.4UNDERLYING AGREEMENTS 47

 

4.2.5ENVIRONMENTAL CONSIDERATIONS 47

 

5.ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 48

 

5.1ACCESSIBILITY 48

 

5.2CLIMATE, PHYSIOGRAPHY, LOCAL RESOURCES & INFRASTRUCTURE 48

 

5.2.1CLIMATE 48

 

5.2.2PHYSIOGRAPHY 50

 

5.3LOCAL RESOURCES 51

 

5.4INFRASTRUCTURE 52

 

6.HISTORY 55

 

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6.1PREVIOUS EXPLORATION WORK 55

 

6.1.1STATE MINING CORPORATION (STAMICO) ERA (1960-1990) 55

 

6.1.2COMPREHENSIVE EXPLORATION ERA (1992-2010) 56

 

6.1.3POST 2010 ERA 56

 

6.2HISTORICAL MINERAL RESOURCE ESTIMATES 57

 

6.2.1EXISTING RESOURCE ESTIMATES 57

 

7.GEOLOGICAL SETTING AND MINERALIZATION 59

 

7.1REGIONAL GEOLOGY 59

 

7.2PROPERTY GEOLOGY 62

 

7.3DEPOSIT GEOLOGY 64

 

7.3.1BUCKREEF DEPOSIT 64

 

7.3.2BINGWA DEPOSIT 64

 

7.3.3EASTERN PORPHYRY DEPOSIT 65

 

7.3.4TEMBO DEPOSIT 67

 

7.3.5MINERALIZATION 67

 

8.DEPOSIT TYPES 69

 

9.EXPLORATION 70

 

9.1BUCKREEF GOLD PROJECT 71

 

10.DRILLING 74

 

11.SAMPLE PREPARATION, ANALYSES AND SECURITY 79

 

11.1CORE SAMPLING METHODS 79

 

11.2RC/RAB SAMPLING METHODS 80

 

12.DATA VERIFICATION 82

 

12.1DRILL DATA REVIEW 82

 

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12.2COLLAR LOCATION CHECKS 82

 

12.3DRILL HOLE AND ASSAYS CHECKS 83

 

12.4GEOLOGY CHECKS 83

 

12.5CORE ASSAY CHECKS 83

 

13.MINERAL PROCESSING AND METALLURGICAL TESTING 85

 

13.1INTRODUCTION 85

 

13.2PREVIOUS TEST WORK 85

 

13.3METALLURGICAL TESTWORK ON BUCKREEF SAMPLES – GEITA GOLD MINING LTD 85

 

13.4SCOPING AND DIAGNOSTIC TEST WORK – GALLERY GOLD 86

 

13.5PHASE 2 METALLURGICAL TEST WORK – IAMGOLD 86

 

13.5.1GRINDING TEST WORK 86

 

13.5.2PROCESS SELECTION TEST WORK 86

 

13.6HEAP LEACHING TEST WORK 87

 

13.6.1SIMULATED HEAP TESTS – SGS 2009 87

 

13.6.2HEAP LEACHING AMENABILITY TEST WORK – SGS 2016 87

 

13.6.3CONCLUSIONS CONCERNING HEAP LEACHING 88

 

13.7CONCLUSIONS FROM THE TEST WORK INITIATED PRIOR TO THIS STUDY 88

 

13.8DOCUMENTATION 88

 

13.9METALLURGICAL TEST WORK. 88

 

13.9.1PURPOSE OF THE TEST WORK 88

 

13.9.2SAMPLE ORIGIN 88

 

13.10GRADE AND DEPORTMENT 89

 

13.10.1HEAD GRADE 89

 

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13.10.2GOLD DEPORTMENT IN THE MILLED MATERIAL 90

 

13.11MILLING 91

 

13.11.1BOND MILLING INDEX 91

 

13.11.2PILOT MILLING 92

 

13.12GRAVITY CONCENTRATION 94

 

13.13CYANIDATION 95

 

13.14CONCLUSIONS 97

 

13.15RECOMMENDATIONS 97

 

14.MINERAL RESOURCE ESTIMATE 98

 

14.1INTRODUCTION 98

 

14.2MINERAL RESOURCE ESTIMATION MODELS 98

 

14.3MINERAL RESOURCE ESTIMATION CHECKS 99

 

14.4MINERAL RESOURCES AND CONCLUSIONS 104

 

15.MINERAL RESERVE ESTIMATE 107

 

15.1INTRODUCTION 107

 

15.2OPEN PIT MINING 108

 

15.3RESOURCE BLOCK MODEL 108

 

15.4OPEN PIT OPTIMIZATION 108

 

15.4.1BUCKREEF PIT 110

 

15.4.2BINGWA PIT 111

 

15.4.3EASTERN PORPHYRY PIT 112

 

15.4.4TEMBO PIT 113

 

15.5DETAILED MINE DESIGN 114

 

15.6IN-PIT DILUTION AND MINING RECOVERY 116

 

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15.7CUT-OFF GRADE CRITERIA 116

 

15.8OPEN PIT MATERIAL INVENTORY 117

 

16.MINING METHOD 118

 

17.RECOVERY METHODS 128

 

17.1INTRODUCTION 128

 

17.2APPENDICES TO THIS CHAPTER 128

 

17.3DOCUMENTATION 128

 

17.4DESCRIPTION OF THE ORE 128

 

17.4.1ORE TYPES 128

 

17.4.2HEAD GRADE 129

 

17.5PROCESSING STRATEGY 129

 

17.6OVERALL DESIGN CRITERIA 129

 

17.7MASS BALANCE 130

 

17.8PROCESS DESCRIPTION AND DESIGN CRITERIA 130

 

17.8.1CRUSHING AND MILLING 132

 

17.8.2GRAVITY CONCENTRATION 133

 

17.8.3THICKENING PLANT 133

 

17.8.4CARBON-IN-LEACH PLANT 134

 

17.8.5CARBON ACID WASH AND ELUTION 135

 

17.8.6CARBON REGENERATION 136

 

17.8.7TAILINGS TREATMENT 136

 

17.8.8REAGENTS 136

 

17.8.9UTILITIES 137

 

17.9EQUIPMENT 137

 

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17.9.1GENERAL EQUIPMENT SELECTION 137

 

17.9.2EDS MILL 137

 

17.10POWER CONSUMPTION 139

 

17.11SUMMARY AND CONCLUSIONS 139

 

18.PROJECT INFRASTRUCTURE 140

 

18.1INTRODUCTION 140

 

18.2SERVICE ROADS FACILITIES 140

 

18.2.1PRIMARY ACCESS ROAD 140

 

18.2.2ON-SITE ROADS AND HAUL ROADS 141

 

18.2.3AIRSTRIP 141

 

18.3ON-BUILDING INFRASTRUCTURE 142

 

18.3.1MAIN ADMINISTRATION BLOCK & WORKSHOP FACILITIES 143

 

18.3.2FUEL STORAGE FACILITIES 143

 

18.3.3MAIN CAMP 143

 

18.3.4EXPLOSIVES MAGAZINE 144

 

18.4POWER PLANT AND DISTRIBUTION 144

 

18.5PROCESS WATER SUPPLY 145

 

18.6FRESH WATER SUPPLY AND DISTRIBUTION 146

 

18.7SEWAGE COLLECTION AND DISPOSAL 146

 

18.8SITE SECURITY 146

 

18.9COMMUNICATION AND IT SYSTEMS 146

 

18.10TAILINGS MANAGEMENT 147

 

19.MARKET STUDIES AND CONTRACTS 152

 

19.1MARKET STUDIES 152

 

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19.2CONTRACTS 152

 

20.ENVIRONMENTAL AND SOCIAL IMPACT STUDIES PERMITTING AND SOCIAL AND COMMUNITY IMPACT 153

 

20.1GENERAL APPROACH 153

 

20.2ENVIRONMENTAL STUDIES 153

 

20.3COMMUNITY AND GOVERNMENT COMMUNICATIONS 153

 

20.4OVERVIEW 154

 

20.4.1CLIMATE, AIR QUALITY AND SOUND 154

 

20.4.2PHYSIOGRAPHY, SOILS AND GEOLOGY 154

 

20.4.3SURFACE WATER AND SEDIMENT 155

 

20.5GROUNDWATER QUALITY 155

 

20.6BIOLOGICAL ENVIRONMENT 156

 

20.6.1VEGETATION 156

 

20.6.2WILDLIFE 156

 

20.6.3HUMAN ENVIRONMENT 156

 

20.6.4POPULATION 157

 

20.6.5HEALTH 157

 

20.6.6FARMING 157

 

20.6.7LIVESTOCK 158

 

20.6.8COMMERCE 158

 

20.6.9GOLD MINING 158

 

20.7SEISMICITY 158

 

20.8ENVIRONMENTAL SENSITIVITIES 159

 

20.9REGULATORY CONTEXT 159

 

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20.10CURRENT REGULATORY STATUS 159

 

20.11PRELIMINARY IMPACTS 160

 

20.12PRELIMINARY CLOSURE AND RECLAMATION PLAN 160

 

20.12.1MINE EXCAVATIONS 160

 

20.12.2WASTE ROCK DUMP 160

 

20.12.3MINE INFRASTRUCTURE (WORK SHOP, OFFICES, PLANT, CAMP HOUSES) 160

 

20.12.4ROADS 161

 

20.12.5TAILINGS STORAGE FACILITY 161

 

20.12.6ROMPAD 161

 

21.CAPITAL AND OPERATING COSTS ESTIMATES 162

 

22.ECONOMIC ANALYSIS 173

 

22.1CASH-FLOW MODEL 173

 

22.2DISCOUNT RATE 173

 

  22.3 TAX 173

 

22.4INFLATION 174

 

22.5REVENUE 174

 

22.6ROYALTY 174

 

22.7SELLING COSTS 174

 

22.8SUMMARY OF THE PARAMETERS USED IN THE FINANCIAL MODEL 174

 

22.9FINANCIAL ANALYSIS 175

 

22.10FINANCIAL ANALYSIS SUMMARY 178

 

22.11FINANCIAL MODEL SENSITIVITY ANALYSIS 178

 

23.ADJACENT PROPERTIES 180

 

24.OTHER RELEVANT DATA AND INFORMATION 181

 

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25.INTERPRETATION AND CONCLUSIONS 182

 

25.1GENERAL 182

 

25.2MINERAL RESOURCES ESTIMATES 182

 

25.3MINERAL PROCESSING AND METALLURGICAL TESTING 182

 

25.4MINING METHODS 183

 

25.5RECOVERY METHODS 184

 

25.6PROJECT INFRASTRUCTURE 184

 

25.7CAPITAL COSTS 185

 

25.8OPERATING COSTS 185

 

25.9RISKS 186

 

25.9.1GOLD PRICE 186

 

25.9.2FINANCING AND LIQUIDITY 187

 

25.9.3OPERATING COSTS 187

 

25.9.4PIT SHELL SELECTION 187

 

25.9.5GEOTECHNICAL ASSESSMENT 187

 

26.RECOMMENDATIONS 188

 

26.1RESOURCE DEVELOPMENT 188

 

26.2RECOVERY TEST WORKS 188

 

26.3FUTURE GOLD PRICE 188

 

26.4LOW GRADE 189

 

26.5PIT SLOPE ANALYSIS 189

 

26.6IN-PIT DUMPS 189

 

26.7METALLURGY AND PROCESSING 189

 

26.8CAPITAL COSTS 189

 

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26.9OPERATING COSTS 189

 

27.REFERRENCE 191

 

28.ABBREVIATIONS GENERAL 192

 

29.MEASURES OF QUANTITY 193

 

30.ORGANISATIONS 194

 

31.GLOSSARY 195

 

32.APPENDICES 201

 

32.1CERTIFICATES OF QUALIFIED PERSONS 201

 

32.2PROCESS FLOW DIAGRAMS 205

 

32.3PROCESSING PLANT MECHANICAL ITEMS 219

 

32.4TABLES APPENDICES 223

 

 

 

 

 

 

 

 

 

 

 

 

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

List of Tables

 

Table 1.1: Block Models Provided   27
     
Table 1.2. 2014 Published Estimated Mineral Resources published & verified by Virimai Projects in 2018   28
     
Table1.3. Restated Estimated Mineral Resources for the 2018 Prefeasibility Study   29
     
Table 1.4: Buckreef Project Pit-Design Optimized Mineral & ROMPAD stockpile Reserves as at 26 June 2018   30
     
Table 1.5: Buckreef Mineral Reserve Statement as at 26 June 2018   30
     
Table 1.6: Buckreef Project Projected Mining Schedule   32
     
Table 1.7: Buckreef Project Life of Mine Estimate Capital Costs   34
     
Table 1.8: Buckreef Project Life of Mine Estimate Capital Costs   35
     
Table 1.9: Results of the After-tax Financial Analysis of the Buckreef Gold Project   35
     
Table 6.2 Buckreef Project NI43-101 Compliant Mineral Resource Estimate (0.50g/t cut-off-grade – Venymn April 2014)   57
     
Table 9.1 Summary of Buckreef Project, Historical Exploration Work, Geita District, Tanzania   70
     
Table 13.1. Key results from Gieta Gold test work.   85
     
Table 13.2. Key results from Gallery Gold test work.   86
     
Table 13.3. Milling characteristics.   86
     
Table 13.4. Recoveries for different processing options.   87
     
Table 13.7 Bond mill indices for oxide and sulphide ore materials.   91
     
Table 13.8. Cyanidation results for the oxide and sulphide ores.   95
     
Table 13.1 Buckreef Project Resource models, Geita District, Tanzania   99
     
Table 14.2: Buckreef Project May 2018 Mineral Resource Estimate at 0.50g/t cut-off grade   102
     
Table 14.3: Buckreef Project Comparative Mineral Resource   103
     
Table 14.4: Buckreef Project: Resource Upgrade Drilling Proposal Budget   105
     
Table 14.5: Buckreef Main proposed infill drill holes   106
     
Table 15.1: Key Economic Parameters   108

 

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Table 15.2: Main Operating Constraints   109
     
Table 15.3: Geotechnical Parameters   109
     
Table 15.4: Processing Parameters   109
     
Table 15-6 Mine Design Parameters   114
     
Table 15.7 Open Pit Reserves Summary   117
     
Table 16.4 Summary of Scheduled Milled Tonnages and Waste Tonnages (Refer –Appendix 32.3) 122 Table 16.5 Summary of Scheduled Tonnages by Pit Tonnages   123
     
Table 16.5 Summary of Waste Dump Volumes at each of the Pits   125
     
Table 17.1 Design head grade for oxide and sulphide ores   129
     
Table 17.2 Overall design criteria   129
     
Table 17.3 Design criteria for the scrubber/screen.   132
     
Table 17.4 Design criteria for the jaw crusher.   132
     
Table 17.5 Design criteria for the EDS mill and classification circuit.   132
     
Table 17.6 Design criteria for gravity concentrators.   133
     
Table 17.7 Design criteria for the shaking table.   133
     
Table 17.8 Design criteria for the dewatering cyclone.   134
     
Table 17.9 Design criteria for the thickener.   134
     
Table 17.10 Design criteria for the carbon-in-leach section.   134
     
Table 17.11 Design criteria for the tails screening.   135
     
Table 17.12 Design criteria for carbon elution.   135
     
Table 17.13 Design criteria for tailings detoxification.   136
     
Table 17.14 Industrial applications of the EDS mill.   138
     
Table 17.15 Status of Buckreef design.   139
     
Table 18.1 Summary of Tailing Dam Design Parameters   149
     
Table 18.2 Summary of Storm Water Storage Dam Design Parameters   150
     
Table 21.1 Summary of the Capital Costs estimates   163
     
Table 21.1 Summary of the Mining Operating Costs   168
     
Table 21.2: Mining rates for the Buckreef   169

 

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Table 21.3: Processing Chemical Consumption & Cost estimation   170
     
Table 21.4: Annual TSF Management Costs   170
     
Table 21.5: Summary of Processing Costs estimates   170
     
Table 21.6: Labour and General Costs Summary   171
     
Table 21.7: Operating Costs Summary   172
     
Table 22.1 Summary of Government taxes and levies used in costing and the Financial Model   174
     
Table 22.2 Summary of the inputs into the Financial Model   175
     
Table 22.3: Financial Analysis of the Buckreef Gold Project   176
     
Table 22.4: Results of the After-Tax Financial Analysis of the Buckreef Gold Project   178
     
Table 25.1: Results of the After-tax Financial Analysis of the Buckreef Gold Project   186
     
Table 32.1: Buckreef Project Full Schedule of Mined Tonnages   223
     
Table 32.2 Buckreef Project Summary of Schedule of Milled Tonnages   224
     
Table32.3: Full Schedule of Staffing Requirements of the Buckreef Project   225
     
Table32.4: Summary of Capital Costs Estimates   228
     
Table 32.50: Equipment Operating Costs\   230
     
Table 32.7: Buckreef Cash Flow Analysis   232

 

 

 

 

 

 

 

 

 

 

 

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LIST OF FIGURES

 

Figure 4.1: Location of the Buckreef Gold Project, Gieta District Tanzania   43
     
Figure 4.2: Buckreef Gold Project, TRX License Holdings, Geita District, Tanzania   44
     
Figure 4.2 Buckreef Project: Deposit Locality within Special Mining License Boundaries, Geita District    46
     
Figure 5.1 Buckreef Project, Summary of Average Climatic Conditions, Geita district; Tanzania   49
     
Figure 5.2 Buckreef Project, Summary of Average Annual Rainfall Patterns, Geita district; Tanzania   49
     
Figure 5.3 Buckreef Project, Summary of Average Annual Temperature conditions, Geita district; Tanzania   50
     
Figure 5.4 Buckreef Project: Physiographic Map of North western districts of Tanzania   51
     
Figure 5.5 Ortho-Photograph of the historical Buckreef Gold Mine Infrastructure, Looking North   53
     
Figure 7.1 Regional Geology Map, Buckreef Gold Project, Lake Victoria Greenstone Belt, Tanzania   59
     
Figure 7.2 Regional Structural Setting, Buckreef Project, Rwamagaza Greenstone Belt, Geita District, Tanzania   61
     
Figure 7.3 Local Geological Setting, Buckreef Project, Rwamgasa Greenstone Belt, Geita District, Tanzania   63
     
Figure 7.4 Local Geological Setting, Bingwa Deposit, Geita District, Tanzania   65
     
Figure 7.5 Local Geological Setting, Eastern Porpyhry Deposit, Geita District, Tanzania   66
     
Figure 7.6 Local Geological Setting, Tembo Deposit, Geita District, Tanzania   67
     
Figure 10.1 Location of Historical RC/DD exploration and Resource drill-holes, Buckreef Deposit, Geita District, Tanzania   74
     
Figure 10.2 Location of Historical RC/DD exploration and Resource drill-holes, Bingwa Deposit, Geita District, Tanzania   76
     
Figure 10.3 Location of Historical RC/DD exploration and Resource drill-holes, Eastern Porphyry Deposit, Geita District, Tanzania   77

 

 

 

 

 

 

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Figure 10.4 Location of Historical RC/DD exploration and Resource drill-holes, Tembo Deposit, Geita District, Tanzania   78
     
Figure 12.1: Ground truthing of hole collars   83
     
Figure 12.2: Core and RC pulp logging verification   84
     
Figure13.2. Sulphide ore before milling and after a single pass of milling in the multi-shaft EDS mill.   89
     
Figure 13.3. Gold grade and deportment by size fraction for the oxide ore, indicating that the gold deportment is higher in the fine fraction, bearing in mind that there is a high fines content of this ore. (Source: MMSA Report No 15/059 r1)   90
     
Figure 13.4. Gold grade and deportment by size fraction for the sulphide ore, indicating that the gold is not concentrated in any one size fraction. (Source: MMSA Report No 15/059 r1)   91
     
Figure 13.5. Principle of the EDS multi-shaft mill.   92
     
Figure 13.6. Particle-size distribution of the milled (product) oxide ore. (Source: MMSA Report No 15/059 r1)   93
     
Figure 13.7. Particle-size distribution of the milled (product) sulphide ore. (Source: MMSA Report No 15/059 r1)   93
     
Figure 13.9. Grade and recovery curves against mass pull for the sulphide ore using the Falcon L40 concentrator. (Source: MMSA Report No 15/059 r1)   95
     
Figure 14.1: Virimai Projects block grade checks   100
     
Figure 14.2: Virimai Projects average sample grade compared to average estimated block grade checks   101
     
Figure 14.3: Bingwa model grade distribution checks   102
     
Figure 14.4: Plan view of infill (red) and existing (black) drill holes in red superimposed on the resource shell   104
     
Figure 14.5: Different views of the planned drill holes showing pit outline   105
     
Figure 15-1: Pit by Pit Graph for Buckreef Pit   110
     
Figure 15-2: Buckreef Selected Ultimate Pit   111
     
Figure 15-3: Pit by Pit graph for Bingwa   111

 

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Figure 15-4: Bingwa Selected Ultimate Pit   112
     
Figure 15-5: Pit by Pit graph for Eastern Porphyry   112
     
Figure 15-6: Eastern Porphyry Pit Selected Ultimate Pit   113
     
Figure 15-7: Pit by Pit graph for Tembo   113
     
Figure 15-8: Tembo Pit Selected Ultimate Pit   114
     
Figure 15-8: Buckreef and Eastern Porphyry Pit and Waste Dump   115
     
Figure 15-9: Buckreef Pit Design Plan and Sections   115
     
Figure 16-1. Key Mining Equipment   119
     
Figure 16-2: Buckreef Rock Core Sample (Source Geology of the Rwamagaza Greenstone Belt and Au prospects therein. Andrew Tunks & Jamie Rogers September 2006)   119
     
Figure 16-1 Mining Annual Summary   120
     
Figure 16-2 Mill Feed Annual Summary   120
     
Figure 16-3 Gold Production Annual Profile   121
     
Figure 17.1. Model of the gold processing plant.   130
     
Figure 17.2. Block flow diagram of the process.   131
     
Figure 17.3. The EDS multishift mill (Source: Jeff Wain, EDS).   138
     
Figure 17.4. A view of the internals of the EDS multishift mill seen from the feed chute. (Source: Jeff Wain, EDS).   138
     
Figure 18.1 Buckreef Site Plan Showing the Main Highway from Mwanza   141
     
Figure 18.2 Buckreef Current Infrastructure Layout Plan   142
     
Figure 18.3: Buckreef Project Location of the Proposed Siting of Works, TSF1 And TSF2   148
     
Figure 18.4 General Layout of the TSF & Storm water Dam Facility   150
     
Figure 22.1 Buckreef After-tax Sensitivity Analysis on NPV @ 5%   179
     
Figure 23.1 Location of adjacent Gold Properties to Buckreef   180
     
Figure 32.1: Process flow diagram for Area 100   206
     
Figure 32.2. Process flow diagram for Area 200   207
     
Figure 32.3. Process flow diagram for Area 250   208
     
Figure 32.4. Process flow diagram for Area 300   209

 

 

 

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

Figure 32.5. Process flow diagram for Area 310   210
     
Figure 32.6. Process flow diagram for Area 350   211
     
Figure 32.7. Process flow diagram for Area 400   212
     
Figure 32.8. Process flow diagram for Area 410   213
     
Figure 32.9. Process flow diagram for Area 420   214
     
Figure 32.10. Process flow diagram for Area 500   215
     
Figure 32.11. Process flow diagram for Area 600   216
     
Figure 32.12. Process flow diagram for Area 610   217
     
Figure 32.13. Process flow diagram for Area 700   218
     
Figure 32.14. Expert Opinion on Buckreef Gold Project After-Tax Cashflow, NPV & IRR   234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

 

1.EXECUTIVE SUMMARY

 

1.1Introduction

 

The pre-feasibility study of the Buckreef Gold Mine Project discussed in this Independent Technical Report (ITR) has been prepared by Virimai Projects (Virimai) at the request of Tanzam2000, a subsidiary to Tanzanian Royalty Exploration Corporation (TRX) as a replacement to the ITR report that was initially prepared and compiled by MaSS Resources with an effective date of April 27, 2017. On publication of MaSS’ report entitled “Updated Independent Technical Mining Reserve Estimate and Economic Feasibility Study on the Buckreef Gold Mine Project, Tanzania, East Africa”, the Ontario Securities Commission (OSC) conducted a routine review of the report’s contents and raised some queries that necessitated a review of the original report compiled by MaSS. Virimai Projects was then commissioned by Tanzam2000, to carry out an in-depth review of the original report by MaSS with the objective of amending and recompiling the ITR in compliance with Canadian National Instrument 43- 101 “Standards of Disclosure for Mineral Projects” (NI43-101).

 

When TRX engaged Virimai Projects to review and respond to the comments raised by the OSC in relation to the MaSS report it was essential to start from the last published resource model and reconcile it to the present. Since no further exploration or infill drilling had been carried out since the January 2014 NI43-101 published mineral resources by Venmyn-Deloitte, these were the “current” mineral resource to be used in subsequent studies.

 

In undertaking its review, Virimai Projects identified an immediate problem regarding the files that were used by MaSS. Virimai Projects determined that Venmyn Deloitte had provided TRX with all the files it had generated during the resource estimation process including working files, instead of providing one final file only. MaSS made an error and used a test block model instead of the final block model. The details of this error by MaSS are fully explained in Section 14.2 of this report.

 

The main aim of this amended prefeasibility study is to provide a technical and economic review of the potential mining operations based on the Buckreef Gold Mineral Resource and other project definition activities such as metallurgical test work. This replacement ITR report, as titled, has been compiled by Virimai Projects to respond to the issues raised by the OSC. This Independent Technical Report (ITR) now replaces and supersedes the previous ITR published by MaSS Resources and it has an effective date of June 26, 2018.

 

1.2Purpose of this Report

 

This report is an independent mine design and costing Pre-Feasibility Study on the Buckreef Gold Mine Project located in the Lake Victoria Goldfields, Geita District, in North Central Tanzania. This report is compliant with the Canadian National Instrument 43-101 ‘Standards of Disclosure for Mineral Projects’.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

The intention of this report is to serve as an update NI43-101 compliant Mining and Economic Analysis Pre-feasibility Study on the Buckreef Gold Mine Project that takes into account a number of refinements, optimizations and alternatives that will form the basis for TRX to move to Feasibility Study and development of the Buckreef Gold Project as an open pit mine, which can be brought rapidly into production to benefit from the current favourable gold market conditions.

 

The Mineral Resources and pit-design optimized Mineral Reserves have been stated in compliance with NI43-101. No Exploration Targets or Inferred Mineral Resources have been used in the compilation of the Optimized Mineral Reserves stated in this study. Virimai Projects has taken full responsibility for the Buckreef Project Mineral Resources as previously published under two NI43-101 compliant technical reports by Venmyn Deloitte of South Africa and already in the public domain.

 

The supervising qualified person for this report, Mr. Wenceslaus Kutekwatekwa, deems this summary a true reflection of the content of the full report with the effective date of June 26, 2018.

 

1.3Project Location

 

The Buckreef Project area is located in East Africa, in north-central Tanzania, approximately 45km south-west of the town of Geita, ~110km south-west of the Mwanza city. Mwanza city is serviced by regional and domestic air flights. In addition, a tarred road (B163) from Mwanza to Geita provides access and service delivery to the project area. A functional aerodrome constructed at the mine site also provides direct connections suitable for light aircraft from Mwanza or Dar Es Salaam, the capital city.

 

Within the project area, access to the various prospects is via an all-weather dirt road from Katoro to the mine-site. Several poorly maintained local tracks and paths suitable for 2-wheel drive vehicles are used in the dry season and 4-wheel drive vehicles in the wet season.

 

For reference, the Buckreef Deposit in the central part of the Buckreef Project area is located at 03ᵒ 5′ 27.69″ S, 032o 1′ 20.65″ E (Arc 1960 UTM Zone 36M 391,367.93mE 9,658,326.9mN). The Buckreef Project comprises five gold deposits all located within a single Special Mining License, SML04/1992.

 

1.4Mineral Tenure

 

The Buckreef Gold Project is a gold exploration project which was originally held by IAMGOLD prior to July 2009. The “Agreement to Redevelop the Buckreef Gold Mine (ARBGM) between IAMGOLD and the Ministry for Energy and Minerals included at that point, a single Special Mining License and 12 Prospecting Licenses covering 98.19km2. In July 2010, IAMGOLD applied to surrender all licenses relating to the ARBGM, effective 25 October 2009, and the Commissioner for Minerals withdrew all license applications relating to the ARBGM.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

In 2010, TRX among others, was invited by STAMICO on behalf of the Ministry of Energy and Minerals, to tender for the opportunity to negotiate a joint venture agreement with respect to the Buckreef Project. TRX was awarded the tender, as confirmed in a letter from the Director General of STAMICO dated 16 December 2010. In October 2011, TRX signed a joint venture agreement with STAMICO with regards to the Buckreef Project. TRX holds a 55% interest in the Buckreef Project, with STAMICO holding the remaining 45%.

 

In terms of the agreement, TRX will manage the Buckreef Project and is responsible for providing mine development financing. If positive feasibility is achieved, TRX expects that the project will be financed through debt or a combination of debt and equity. Net profits will be divided in accordance with the parties’ ownership interests after payment of all project expenses including debt service.

The current Mineral Resources for the Buckreef Gold project are declared over Special Mining License block SML04/1992 to which the JV agreement company Buckreef Gold Company Limited hold the rights as part of the second renewal of the special mining license, valid to 16th June 2027. Virimai Projects Pvt Ltd, through MaSS Resources Pvt Ltd has reviewed the licence documentation as issued by the Ministry of Energy and Minerals of Tanzania and is satisfied that these are in order. The Buckreef special mining license (SML04/92) as renewed covers a total area of 16.04km2.

 

1.4.1Permits and Permitting Process

 

Basis for Mineral Title

 

The state owns title to all mineral resources in The Republic of Tanzania. All permits conferring rights to explore and extract mineral resources are granted by the Minister of Energy and Minerals, (“MEM”) in conjunction with the recently enacted Minerals Sector Mining Commission under the Tanzania 2010 Mining Act with revisions in enacted in 2017 by the 5th Parliament of Tanzania. The Mining Act serves as the legal framework governing mining in the Tanzania.

 

Exploration Permits (Rights and Obligation)

 

The Ministry of Energy and Minerals (MEM) is responsible for guiding the development of the mining industry in Tanzania through the Mineral Division. The Tanzanian Mining Act, 2010, the Explosives Act, 1963, and the Mining (Mineral Rights) Regulations, 2010, regulate the law relating to prospecting and exploiting minerals, including granting, renewals, royalties, fees and other charges.

 

Mineral property and control over minerals is vested in The United Republic of Tanzania. Only companies incorporated in Tanzania may hold mineral rights in Tanzania; however, exploration and mining is open to foreign concerns who can enter into joint venture agreements with locally registered Tanzanian companies and/or individuals granted mineral rights by the government.

 

Royalties are charged on gross value which for precious metals is 6% and district council where a gold mine is located is entitled to collect a 0.3% on the revenues from gold production as service levy. An additional export levy fee of 1%, payable to the government was enacted in early 2018. There is mandatory minimum 16% equity participation by the State when a project achieves mine development stage. Joint ventures with local companies are encouraged at both exploration and mine production stage with especially consideration on service provision with first preference being given to local indigenous companies.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

Mineral rights under the Mining Act include Prospecting Licenses (PL), Special Mining Licenses (SML), Mining Licenses (ML), Processing Licenses, Smelting Licenses and Refining Licenses. The prospecting license is granted for an initial period of 4 years and subject to two renewal periods as an extension of tenure. On 1st renewal, if the license area is greater than 20km2 then 50% must be relinquished and the license is then valid for a further 3 years. Upon second renewal, if the license is greater than 20sq km then 50% must be relinquished and the license is then valid for a further 2 years. Mining Licenses are granted for an initial period of 10 years for medium scale mining operations with a capital investment between US$100,000 and US$100 million and are renewable. An Environmental Certificate issued by the National Environment Management Council (NEMC) is a perquisite to the grant of a Mining License.

 

Special Mining Licenses (SML) are granted for large scale mining operations with a capital investment of more than US$100 million and are valid for the estimated mine life determined in the Feasibility Study (FS). Prior to the new regulations gazetted in March 2018, holders of special mining licenses may enter into a Mining Development Agreement (MDA) with the Government which is subject to review every five years and at the renewal of the mineral right. This has since been cancelled.

 

Now a recently established 6-man Mining Commission working with the Minister of Mines and both reporting to the Parliament will discuss and oversee that the Tanzanian government realizes maximum benefit from the project as well as guarantee fiscal stability for a long-term mining project, cover environmental matters which are project specific and not covered by the Mining Regulations, requirements for the procurement of goods and services available in Tanzania and the employment and training of citizens of Tanzania and the terms of State participation in long-term mining projects.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

1.5Geology and History of Exploration

 

1.5.1Regional Geology

 

The Lake Victoria Goldfield was discovered in 1894 and significant exploitation began in the 1930s at the Geita Gold Mine. By 1940 Tanzania was producing 4.5 t/y of gold. Post 1990, a new phase of modern exploration and companies with a focus on Archaean exploration in the Lake Victoria Goldfields developed after significant gold discoveries in the Lake Victoria region.

 

The historic Buckreef Gold Mine was an underground mine developed within the BRMA and operated by the Tanzanian State during the late 1980s. IAMGOLD Tanzania (IAMGOLD) held the rights to the Buckreef Project prior to July 2009 and in 2010 TRX entered a joint venture with Stamico with respect to the project. The project comprises prospecting licenses 33.2km2 in extent and a special mining license of 16.04km2. Within the prospecting licenses, there are 53 primary mining licenses registered to local Tanzanians as small-scale artisanal gold operations.

 

The Buckreef Project area covers the eastern portion of the east-west trending Rwamagaza Greenstone Belt (RWGB) which is one of several Archaean supra-crustal belts lying within the Tanzanian Craton of East Africa.

 

1.5.2Local Geology

 

Little outcrop is present on the Buckreef project licence portfolio properties limiting the amount of bedrock mapping that may be and/or has been conducted. The central part of the Buckreef license portfolio is underlain by lower Nyanzian mafic volcanics (basalts) and rock of dioritic to gabbroic texture. Within the basalts are interflow tuffaceous to argillaceous sediments and intruding quartz feldspar porphyries.

 

The predominant rock type on the Buckreef property is a generatively deformed mafic-felsic sequence, which ranges in composition from Mg rich to Fe-rich mafic rocks to the north. At Buckreef, drilling has indicated the presence of thin interflows of predominantly pelitic and cherty sediments. Varieties of porphyritic textured felsic intrusions have also been documented.

 

1.5.3Mineralization

 

The historical Buckreef underground gold mine was developed on an ENE-WSW trending, 5-30 m wide, brittle-ductile fault zone developed within relatively undeformed mafic volcanics. The fault zone contains early developed pervasive iron carbonate alteration which has undergone later brittle fracturing and brecciation with recementation by multiple events of grey to white quartz veining. Finely disseminated pyrite occurs in a halo surrounding the zones of quartz veining. The degree of quartz veining is directly related to the tenor of gold mineralization. Deep drilling has led to the definition of higher grade shoots plunging steeply to the north. Several narrow, more discontinuous sub parallel zones of similar alteration and mineralization have been defined both to the west and to the east of the main fault zone.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

Gold mineralization at Buckreef is non-refractory in both fresh and oxide material and is associated with small amounts of fine grained pyrite within the grey quartz veining. Detailed logging of drillcore reveals a prominent deepening of the oxidation profile above portions of both the main and north zones.

 

Gold mineralization is primarily localized in ENE-WSW and E-W trending brittle-ductile shear zones within relatively deformed mafic volcanics. Alteration within the shear zones is characterized by a silica carbonate- pyrite assemblage with the shear fabric being well preserved. Gold mineralization is associated with the alteration halos as well as grey quartz zones with the quartz occurring as thin veins, stringers and boudins generally parallel to the shear fabric.

 

1.6Database

 

Virimai Projects utilized and independently interrogated and reviewed four of the Venymn resource models (Table 1.1) for the Buckreef, Eastern Porphyry, Bingwa and Tembo deposits used in the original published 2012 PEA and the subsequent 2014 Mineral Resource Update Technical reports.

 

Table 1.1: Block Models Provided

 

 

Item

 

Ore Body

 

Datamine Model

Model Type

 

Comment

Final Model Used Opt
1 Buckreef main mod_br-mixed nospot Krigged Only mineralisation bm_mod_run3

 

2

Eastern Porphyry

 

mod_ep_mixed

 

Krigged

 

Only mineralisation

 

ep_mod_run3

3 Bingwa mod_bw_supercap Krigged Only mineralisation bw_mod_run3
4 Tembo mod_tb_mixed Krigged Only mineralisation tb_mod_run3

 

As per published reports, “the Mineral Resources were estimated using Multiple Indicator Kriging (MIK) techniques in GS3 software produced by Hellman and Schofield. The model estimates resources into panels, which approximate the drill hole sample spacing throughout the majority of the study area. The Mineral Resource estimates within each panel were classified according to the distribution of sampling in the kriging neighbourhood and took into account the uncertainty in the estimates related to the proximity and distribution of the informing composites”.

 

1.7Mineral Resources

 

Virimai Projects carried out site verification of the data used in the estimation of resources that included

 

a.Ground truthing of the drill hole collars
b.Geology and lithology verification through core and pulp inspection, compared to the geological logs

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

c.Validation of the database assays compared to the assay certificates

 

This was carried out largely on randomly selected drill holes. Only a few holes were selected on the basis of the high grades intersected. Virimai Projects concluded that the data integrity had been preserved throughout the chain of custody and, therefore, that the results could be used in resource estimation and subsequent business use.

 

No further drilling has been carried out since the publication of estimated Mineral Resources by Venmyn Deloitte in 2014. Virimai Projects carried out a review of the four resource models (Buckreef Main, Eastern Porphyry, Tembo and Bingwa) used in the published estimates and found that the grade estimates were robust. For this reason, Virimai Projects accepted and adopted the resource models for use in the current pre-feasibility study. However, Virimai Projects re-stated the Mineral Resources for two of the resource areas as follows

 

a)                  Virimai Projects declared about 10,000 t less Inferred Mineral resources as a result of surface correction

b)                  About 85,0000 t spread across the categories were removed for the declared Mineral Resources at Bingwa as a result of being located away from the main mineralised zone either located under overburden exceeding 40 m or existing as discrete non-contiguous bodies. The 85,000 tonnes remains in the Mineral Inventory outside the open-pitable mineral resource from current projections.

 

Table 1.2. 2014 Published Estimated Mineral Resources Published verified by Virimai Projects in 2018

 

 

 

 

Prospect

MEASURED INDICATED INFERRED MEASURED + INDICATED

 

 

Tonnes

 

 

Grade

 

In Situ Content

 

 

Tonnes

 

 

Grade

 

In Situ Content

 

 

Tonnes

 

 

Grade

In Situ Conten t

 

 

Tonnes

 

 

Grade

 

In Situ Content

 

(Mt)

Au (g/t)

 

Au (Oz)

 

(Mt)

Au (g/t)

 

Au (Oz)

 

(Mt)

Au (g/t) Au (Oz)

 

(Mt)

Au (g/t)

 

Au (Oz)

 

Buckreef

 

8.90

 

1.72

 

491,526

 

13.10

 

1.41

 

594,452

 

7.53

 

1.33

322,90

0

 

22.00

 

1.54

1,085,97

8

Eastern Porphyry

 

0.09

 

1.20

 

3,366

 

1.02

 

1.17

 

38,354

 

1.24

 

1.39

 

55,476

 

1.10

 

1.18

 

41,721

Tembo 0.02 0.99 531 0.19 1.77 10,518 0.27 1.93 16,521 0.20 1.70 11,048
Bingwa 0.91 2.83 82,386 0.57 1.38 25,274 0.31 1.29 12,922 1.48 2.27 107,660

 

Total

 

9.91

 

1.81

 

577,810

 

14.87

 

1.40

 

668,598

 

9.35

 

1.36

 

407,819

 

24.78

 

1.56

 

1,246,408

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

Table1.3. Restated Estimated Mineral Resources for the 2018 Prefeasibility Study

 

 

 

 

Prospect

MEASURED INDICATED INFERRED MEASURED + INDICATED

 

Tonnes

 

Grade

In Situ Content Tonne s

 

Grade

In Situ Content

 

Tonnes

 

Grade

In Situ Content Tonne s

 

Grade

In Situ Content

 

(Mt)

Au (g/t)

 

Au (Oz)

 

(Mt)

Au (g/t)

 

Au (Oz)

 

(Mt)

Au (g/t)

 

Au (Oz)

 

(Mt)

 

Au (g/t)

 

Au (Oz)

Buckreef 8.90 1.72 491,368 13.09 1.41 594,097 7.52 1.33 322,819 21.99 1.54 1,085,465
Eastern Porphyry

 

0.09

 

1.20

 

3,366

 

1.02

 

1.17

 

38,339

 

1.24

 

1.39

 

55,380

 

1.10

 

1.18

 

41,705

Tembo 0.02 0.99 531 0.19 1.77 10,518 0.27 1.92 16,461 0.20 1.70 11,048
Bingwa 0.90 2.84 82,145 0.49 1.48 23,331 0.22 1.49 10,541 1.39 2.36 105,477
Total 9.90 1.81 577,411 14.79 1.40 666,285 9.25 1.36 405,201 24.69 1.57 1,243,696

 

Virimai Projects recommended that some 29 holes totaling 4,463 m be drilled to upgrade the Inferred Mineral Resources within the reserve shell. There is also a component of extending the mineral resources where the drill holes go beyond the reserve shell. In the process some Indicated Mineral Resources are likely to be upgraded to Measured Mineral Resources. The actual metres to be drilled will be determined at the appropriate time in line with the compelling objectives of the Feasibility Study.

 

1.8Mine Design and Mineral Reserves

 

From the published 2014 Venymn Deloitte NI-43-101 compliant Mineral Resource estimate technical report, Virimai Projects essentially overhauled and improved on the original overall mining philosophy have produced a NI-43-101 compliant Mineral Reserve estimate for Buckreef Gold Project based on the original resource block models, achievable mining shapes, mining recovery, mining dilution and open-pit pre-production development cost considerations.

 

The Buckreef Project Mineral Reserve estimate is based on a gold cut-off grade of 0.37grams per tonne) which has been calculated from the following parameters:

 

a)Gold Price (pit shell): US$ 1,300 per oz
b)Mining Cost: US$19.00 per ton of ore
c)Process Cost: US$10.24 per ton of ore
d)Labour Cost: US$1.98 per ton of ore
e)Recovery: 92.3% for oxides
f)Recovery 85.0% for sulphides

 

The Mineral Reserve estimate for the Project is tabulated in Table 1.4.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

Table 1.4: Buckreef Project Pit-Design Optimized Mineral & ROMPAD stockpile Reserves as at 26 June 2018

 

 

Pits Design Reserves Summary

COG: Oxide & Trans = 0.38, Fresh = 0.41
Virimai 26th June 2018 Pit Design Reserves Summary
Prospect Reserves Tonnes Grade In Situ Gold Content
Name Category (Mt) Au (g/t) Kg oz

 

Buckreef

Proven 8,174,415 1.64 13,374.06 429,985.66
Probable 8,174,147 1.40 11,435.72 367,666.58
Waste 160,217,840      
Total (Proven + Probable) 16,348,562 1.52 24,809.78 797,652.24
           

 

Eastern Porphyry

Proven 79,385 1.17 93 2,982
Probable 976,281 1.03 1,003 32,242
Waste 9,823,917 0.02    
Total (Proven + Probable) 1,055,666 1.04 1,096 35,224

 

Tembo

Proven - - - -
Probable 70,183 2 165 5,312
Waste 1,354,468 -    
Total (Proven + Probable) 70,183 2.35 111 3,582

 

Bingwa

Proven 1,098,383 2.39 2,366 76,074
Probable 510,154 1.30 377 12,108
Waste 10,311,734      
Total (Proven + Probable) 1,608,536 2.04 2,743 88,182

 

Grand Total

Proven 9,352,183 1.72 16,092 517,358
Probable 9,730,764 1.36 13,265 426,492
Proven +Probable 19,082,947 1.54 16,749 943,851

 

Source: Virimai Projects 2018

(1)  Mineral Resource is inclusive of Mineral Reserve shapes, mining recovery, mining dilution and open-pit preproduction development costs. Mineral Reserve estimate includes dilution.

(2)  Mineral Reserve was estimated using NI43-101F compliant Standards on Mineral Resources and Reserves, Definitions. (3Ccontained metal may differ due to rounding.

The reserve statement for the Buckreef Gold Project is as summarised in table 1.5

 

Table 1.5: Buckreef Mineral Reserve Statement as at 26 June 2018

 

  Tonnes Grade In Situ Gold Content
(Mt) Au (g/t) Kg oz

 

Buckreef Project

Proven -Stockpile 119,726 1.86 223 7,160
Proven 9,352,183 1.72 16,092 517,358
Probable 9,730,764 1.36 13,265 426,492
Mineral Reserves 19,202,673 1.54 29,580 951,010

 

1) Mineral Resource is inclusive of Mineral Reserve shapes, mining recovery, mining dilution and open-pit preproduction development costs. Mineral Reserve estimate includes dilution.

(2) Mineral Reserve was estimated using NI43-101F compliant Standards on Mineral Resources and Reserves, Definitions. (3Ccontained metal may differ due to rounding.

 

Reserves were calculated from pit design. Full Grade Ore cut-off grade (FGO) calculations rely on inputs from this study and other sections of the Buckreef Prefeasibility study. Reserves were based on a gold price of $1300/oz for pit design, and cut-off grade 0.38g/t. Inferred Mineral Resources are considered geologically speculative and are not used in project economics, nor are they considered for mining plans. The study is only restricted to open pit mining at this stage with no detailed consideration of underground mine planning that is envisaged at the end of the pit life.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

1.9Mine Development and Operations

 

Buckreef project has been planned as an open pit truck and excavator operation. This is the best mining method for the deposit due to the geometry of ore bodies and near surface material. Trucks and loaders allows for reasonably good selectivity and cost benefits.

 

Equipment selected to haul waste and ore materials includes seventeen 40tonnes trucks, and four backhoe excavators through the life of mine (LoM) along with additional support and ancillary equipment. Virimai Projects produced a mining schedule using parameters for the selected mining equipment.

 

A single optimal mining sequence has been evaluated and considered for the life of mine (LOM) production schedule described in this report and this assumes that a processing plant will be established close to the Buckreef Pit and will treat ore from the Buckreef, Bingwa, Eastern Porphyry and Tembo deposits until depletion.

 

The optimal mining schedule is based on optimized pit shells for each of the deposit. The pit designs generated mineral reserves which come up to a total of 19.2Mt grading at 1.54g/t excluding the current existing ROMPAD stockpile of 119,726t @ 1.86g/t.

 

A production schedule has been developed based on the following constraints:

 

·Target ore production during commercial production to be 1,497,000 tonnes per year;
·Minimization of pre-strip quantities;
·Oxides material in all pits to be treated first;
·Initial process plant feed scheduled at 60tph (Yr1-2 with upgrades to 120tph (Yr3) and 180tph (Yr4 onwards)

 

A summary of the mining schedule is shown in Appendix and extend to the end of the life of the four open pits in year 16.

 

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 NI43-101 ITR Mineral Reserves Est. & PFS for Buckreef Gold Mine Project

 

 

Table 1.6: Buckreef Project Projected Mining Schedule

 

 

Description

 

Units

YEARS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Total
Total                                    
Tonnes of Oxide Ore kt 274 256 80 110 39 31 159 65 321 118 16 1 41 - - - 1510
AUMI of Oxide Ore g/t 2.04 1.53 1.13 0.89 0.7 1.22 1.02 2.08 1.98 3.92 0.74 0.79 2.11 - - - 1.78
Tonnes of Oxide Waste kt 2,713 1,443 2,087 598 191 1551 2086 2140 1978 3323 918 82 1046 - - - 20155
Tonnes of Oxide Ore & Waste g/t 2,988 1,699 2,166 707 230 1581 2245 2205 2299 3440 935 83 1086 - - - 21665
Tonnes of Trans. Ore kt 92 192 150 93 93 91 40 21 82 341 256 52 17 - - - 1520
AUMI of Trans. Ore g/t 2.18 2.86 1.63 0.87 1.01 1.01 1.57 1.04 1.05 3.1 1.29 0.91 2.72 - - - 1.92
Tonnes of Trans. Waste kt 1,296 1,097 2,134 1,410 733 1,525 1,930 1,277 1,629 2,700 2,878 1,368 368 - - - 20,346
Tonnes of Trans. Ore & Waste g/t 1,388 1,289 2,284 1,504 825 1,616 1,970 1,298 1,711 3,041 3,134 1,420 385 - - - 21,866
Tonnes of Hard Ore kt 43 187 346 555 1247 1522 1269 1263 1060 1122 1092 1440 1497 1386 1110 915 16053
AUMI of Hard Ore g/t 1.37 2.14 1.73 1.49 1.63 1.48 1.29 1.86 1.57 1.26 1.31 1.22 1.29 1.65 1.41 1.7 1.48
Tonnes of Hard Waste kt 508 1,766 4,055 6,824 7,781 6,839 7,985 9,294 14,640 12,160 14,550 15,490 12,149 12,888 13,176 1,102 141,207
Tonnes of Hard Ore & Waste kt 551 1,953 4,401 7,379 9,028 8,361 9,254 10,557 15,700 13,283 15,641 16,930 13,645 14,274 14,286 2,017 157,260
Oxide, Trans and Hard Ore kt 409 635 575 758 1378 1644 1469 1349 1462 1581 1364 1493 1555 1386 1110 915 19083
Ore grade kt 2.00 2.11 1.62 1.33 1.56 1.45 1.27 1.85 1.63 1.85 1.30 1.21 1.32 1.65 1.41 1.70 1.54
Waste Mined kt 4,518 4,306 8,276 8,833 8,705 9,914 12,000 12,712 18,248 18,183 18,346 16,940 13,562 12,888 13,176 1,102 181,708
Ore & Waste kt 4,927 4,941 8,851 9,590 10,083 11,558 13,469 14,060 19,710 19,764 19,710 18,432 15,117 14,274 14,286 2,017 200,791
SR (w/o)   11.04 6.79 14.38 11.66 6.32 6.03 8.17 9.42 12.48 11.5 13.45 11.35 8.72 9.3 11.87 1.2 9.52

 

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1.10Mineral Process and Metallurgical Testing

 

The process plant treatment philosophy is that all material above the cut-off grade is treated as ore to be processed through the plant. The ore processing circuit comprises crushing, grinding and gravity and concentration, followed by Carbon-in-Leach (CIL) processing on the gravity circuit. The process plant will operate on a 24-hour per day 7-day per week schedule. General arrangement of the ROM pad, crushing and processing facilities is shown in Appendix 32.2.

 

The process design for the Buckreef Project is based on extensive metallurgical test-work. Results from the work have established that high gold recoveries can be achieved with a conventional process of comminution (using the latest EDS system as a replacement for the conventional ball & roller mill circuit), gravity concentrate, flotation and leaching circuit.

 

The mine is estimated to produce sufficient ore to maintain an initial process plant feed scheduled at 60tph (Yr1-Yr2) with upgrades to 120tph (Yr3) and 180tph (Yr4 onwards). Targeted ore production during commercial production is 1,497,000 tonnes per year LOM.

 

Overall recoveries from the flotation and cyanide leach circuits are expected to be 92% and 85% for primary oxide and sulphide ores respectively.

 

Past and current processing analyses have shown no evidence of any deleterious elements such as arsenic, mercury, or antimony that would otherwise affect gold recovery in the leach circuit, however, copper in the leach circuit solution may occasionally be encountered.

 

1.11Capital and Operating Cost Estimates

 

1.11.1Capital Costs

 

The capital cost estimate for the Buckreef project includes all earthmoving equipment required for the mining of ore and waste, supply and commissioning of processing plant, construction of the tailings storage facility, and other support infrastructure to support a 1.5Mtpa gold operation. The capital estimates presented in the study include for the supply installation and commissioning of the defined production asset. Capital costs for the project will be phased as production facilities are ramped up over a period of say three years. Estimate capital costs for the Buckreef Project are put at US$76,5 million including projected sustaining capital costs over the life of the project. The capital costs estimates are summarised in Table 1.7. The project sustaining costs are estimated to USD22.95 million over the life of the project.

 

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Table 1.7: Buckreef Project Life of Mine Estimate Capital Costs

 

Item Description Amount
1 Mining Equipment (Fleet) 20,629,924
2 Processing Plant 40,277,625
3 Human Resources & Community 4,665,000
4 HSE 175,000
5 Finance + IT 774,913
6 Contingency 15% 9,978,369
7 Total 76,500,831

 

 

In addition, the cost of mine closure and remediation is estimated to be $4.5 million (per the existing accepted Closure Plan). These estimates have an accuracy of ±15% with a base date as of the effective date of this Technical Report.

 

In addition to the initial capital outlay a total of US$4.5 million has been estimated as the mine closure costs estimate. This sum is projected to be spent in the last year of production for the removal of mining and processing equipment and demolition of unwanted infrastructure. The general philosophy of the closure plan is to have progressive rehabilitation during the operation of the mine with some of the costs catered for in the operation of the mine. The pit excavations will be designed with a future use as water storage facilities for irrigation or fishing project.

 

1.11.2Operating Costs

 

The operating costs estimates have been estimated on the basis of inclusion of all recurring costs for labour, service contractors, mine operation maintenance parts and supplies, consumables supplies, freight transport etc to operate the facilities as described in the update study. Operating costs is defined as any recurring expenditure which can be expensed in the tax year in which it is incurred.

 

The average operating cost estimate for the project operation over the LOM is summarized in Table 1.8 which is calculated based on the cost per ton of ore mined and processed at the Project.

 

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Table 1.8: Buckreef Project Life of Mine Estimate Capital Costs

 

Item Description Unit Rate $/t
1 Mining Drilling and Blasting Waste $/t 0.62
2 Mining Drilling and Blasting Ore $/t 0.76
3 Load and Haul Ore $/t 1.13
4 Load and Haul waste $/t 1.03
5 Overhaul rate $/t/km 0.08
6 Mine Rehabilitation (Pits & Dumps) $/t 0.03
7 Processing Cost (per Tonne Milled) $/t 10.24
8 Unit Cost G&A $/t 1.98
9 Power Supply $/t 1.29

 

1.12Project Economics

 

The results of the Buckreef Project’s economic analysis based on mining the identified open-pit Mineral Reserve, indicate a positive after-tax Net Present Value (NPV) of $130.96 million at a discount rate of 5% and an Internal Rate of Return (IRR) of 74% as summarized in Table 1.9.

 

Table 1.9: Results of the After-tax Financial Analysis of the Buckreef Gold Project

 

Item Description Units Amount
1 Mining Profile    
1.1 Mineral Reserves (Prove +Probable) Mt 19.202
1.3 In situ Grade g/t 1.54
1.4 Waste in Pit Shell Mt 181
1.5 Mine Dilution % 5
2.4 Stripping Ratio in Area 1 waste/ore 9.54
2 Processing    
2.1 Annual Ore Milling Mtpa 1.497
2.1.1 Year 1-2 Mtpa 0.486
2.1.2. Year 3-4 Mtpa 0.972
2.1.3 Year 4-16 Mtpa 1.497
2.2 Life of Mine in Years Years 16
2.3 Gold Production    
2.3.1 Average Gold Production per year (oz) 51,000
2.3.2 Total Gold Production (LoM) (oz) 822,000
3 Capital Expenditure    
3.1 Start-up Capital Plant etc USD$ M 76.50
3.2 Sustaining capital costs USD$ M 22.95
3.3 Closure Costs (in Opex) USD$M 4.50
4 Financial Modelling Result    
4.1 Average LoM Cash Costs USD$/oz 735
4.2 After Tax NPV @ 5% pa USD$M 130.96
4.3 After Tax IRR % 74

 

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1.13Conclusions

 

This update study indicates that the Buckreef Gold Project based on the estimated Proven and Probable Mineral Reserves (Open Pit quantities) of 19.0MT grading at 1.5g/t can support a 1.497Mtpa mine for a period of 16years. The ore material will be mined from the four open pits and then sent for processing at a plant located at Buckreef designed to achieve gold recovery of 92.3% and 85.0% for the oxides and sulphides material respectively over the life of the project. Over the estimated life of the mine of 16 years approximately 822koz of gold is expected to be produced.

 

Based on owner mining philosophy the project initial capital outlay for the earthmoving equipment and processing equipment and related infrastructure it was estimated that the project will require US$76,5 million capital outlay with sustaining costs of $22.95 million over the life of the project. The life of mine average cash operating cost is estimated at US$735/oz Au.

 

The after-tax Project NPV is estimated to be $130.96 M at a rate of 5% per annum and an internal rate of return of 74%. The simple payback period of the Project is estimated at 4years.

 

Based on the information availed to Virimai Projects and the degree of exploration work carried out at Buckreef as of the effective date of this Report it is Virimai Projects’ opinion that Buckreef has mineral reserves sufficient to support an open pit operation processing 1.5Mt of ore over the period of say 16 years

 

Virimai Projects’ conclusion, based on the work performed and presented herein is that the Buckreef Gold Project is likely to be both economically and technically feasible. Virimai Projects has reviewed the underlying assumptions to the geologic, resource, reserve and economic models and is satisfied with their suitability for use.

 

1.14Recommendations

 

The following recommendations are made considering the results of the prefeasibility study and the project risk identified. Virimai Projects recommends progression to the next level of study that includes further drilling and other studies aimed at completing the characterisation of the Buckreef Project in preparation of detailed engineering design. The work program suggested includes for the following:

 

Additional drilling to upgrade the inferred resource to indicated or measured.
Pilot processing plant
Continued analysis for owner mining and contract mining.
Continuation of geotechnical investigation to optimize on the pit slopes
Continuation of hydro geological studies to feed into the pit slope studies.

 

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2.INTRODUCTION

 

Buckreef Gold Project (“Buckreef”) is an advanced exploration gold project which comprise of four gold deposits namely Buckreef, Eastern Porphyry, Tembo and Bwinga all within 4km of each other. Buckreef deposit is the major deposit of the area. The gold project is located in the Geita District in Tanzania East Africa. Tanzanian Royalty Exploration Corporation (TRX) a Canadian Listed company won 55% interest in the Buckreef Project with the other remaining 45% held by State Mining Corporation of Tanzania (Stamico) in 2010.

 

The Updated Independent Technical Mining Reserve Estimate and Economic Pre-Feasibility Study of the Buckreef discussed in this Technical Report have been prepared by Virimai Projects at the request of TRX. The study was prepared and compiled by Virimai Projects of Harare Zimbabwe and other specialised consultants fully defined in this report. This Technical report was prepared in accordance with the guidelines set out in the National Instruments 43 -101 Standards of Disclosure for Mineral Projects (NI43 -101). The main intent of this study is to provide a technical and economic review of the potential mining operations based on Buckreef’s most recent mineral resource estimate and other project definition activities such as metallurgical test work. The mineral resources used in the study are based on the Preliminary Economic Assessment (PEA) and the 2014 Technical Mineral Resource Update Report (ITR) both compiled and published by Venmyn Deloitte. The Amended Pre-Feasibility study is based on the development of an open pit mining operation feeding a processing plant to recover gold mineralisation. The processing will have a daily capacity at steady state of 1.5Mt per year. All monetary units used in this study are in USD Dollars unless otherwise specified.

 

2.1Scope of Study

 

The following Technical Report (“the Update Report”) presents the results of the amended pre- feasibility study for the development of the Buckreef Gold Project in Geita District in Tanzania East Africa. In 2017 TRX commissioned a Virimai Projects engineering consultancy and other specialist metallurgical consultancy companies to carry out the study. This study was prepared at the request of Mr Jeffrey Duval president of TRX. TRX is a Canadian publicly traded company listed on the Toronto Stock Exchange (TSX) under the trading symbol TRX with its head office situated at:

 

Tanzanian Royalty Exploration Corporation

82 Richmond Street West

Suite 208

Toronto ON

Canada N5C 1P1

 

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This report titled Amended NI43-101 Independent Technical Mineral Reserve Estimate and Pre- Feasibility Study on the Buckreef Gold Mine Project, Tanzania, East Africawas prepared by two Qualified Persons namely; Frank Crundwell and Wenceslaus Kutekwatekwa, following the guidelines of the NI43-101. Frank Crundwell was responsible for Item 13 (“Mineral Processing and Metallurgical Testing”) and Item17 (“Recovery methods”), while Wenceslaus Kutekwatekwa was the supervising QP responsible all sections of this Technical Report.

 

2.2Effective Dates and Declaration

 

This Technical Report titled “Amended Independent Technical Mining Reserves Estimate and Economic Pre-feasibility Study on the Buckreef Gold Mine Project, Tanzania, East Africa” is considered effective as on the 26th June 2018. Virimai Projects’ opinion contained herein is based on information collected by Virimai Projects and TRX throughout the course of their investigations, which in turn reflects various technical and economic conditions at the time of writing. Given the nature of the mining business, these conditions can change significantly over relatively short periods of time. Consequently, actual results may be significantly more or less favourable.

 

This Report may include technical information which requires subsequent calculations to derive subtotals, totals and weighted averages. Such calculations inherently involve some degree of rounding and, consequently, introduce some margin of error. Where this occurs, Virimai Projects does not consider it to be material.

 

2.3Terms of Reference

 

This report titled, “Amended NATIONAL INSTRUMENT 43-101 Independent Technical Mining Reserve Estimate and Pre-Feasibility Study on the Buckreef Gold Mine Project, Tanzania, East Africa” (the “Technical Report”) was prepared to provide Tanzam2000 Pvt. Limited (Tanzam) Company with an independent Canadian National Instrument 43-101 “Standards of Disclosure for Mineral Projects” (NI43-101) Pit-design optimized Mining Reserve Estimate and Economic Valuation Technical Report as an upgrade of the results of the 2012 Preliminary Economic Assessment (PEA) and the 2014 Technical Mineral Resource Update Report (ITR) both compiled and published by Venmyn Deloitte.

 

Tanzam2000 is a Tanzanian-based 100% wholly owned subsidiary of TSX listed Tanzanian Royalty Exploration Corporation (TRX), a gold exploration company that co-owns and operates Buckreef Gold Mine Re-Development Project in Central Tanzania, East Africa.

 

Venmyn Deloitte (Pty) Limited “Venymn Deloitte” was previously contracted by TRX and completed a Preliminary Economic Assessment (PEA) on Buckreef Gold Mine Re-development Project (Buckreef Project of the Project) in Tanzania in 2012. The results of the PEA were reported in a NI43-101 Independent Technical Report (ITR) (VIP 21 August 2012).

 

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Further to this, Venmyn Deloitte was again commissioned by Tanzam2000, a subsidiary to Tanzanian Royalty Exploration Corporation, to produce a second independent NI43-101 compliant report titled “Independent Technical Memorandum on the Mineral Resource Estimate for Tanzanian Royalty Exploration Corporation’s Buckreef Project in Tanzania” subsequently published as ITR V119R of 30th April 2014. Newly identified mineralization was identified in various deposit extensions were evaluated and led to an increase the Mineral Resource base of the Buckreef Project. Both reports are posted on SEDAR.

 

In October 2016, TRX, through its subsidiary, Tanzam2000, commissioned MaSS Resources Limited of Tanzania, to produce an internal and independent optimized mine plan using proven methods that provide production surety. The study was therefore expected to effectively encompass the following aspects:

 

·Estimation of mineral reserves
·Mining method analysis and selection
·Development and production scheduling with specialized mining software
·Optimization of production rate and sequencing
·Estimation of equipment and manpower requirements
·Mining logistics and infrastructure design
·Capital and operating cost estimation
·Benchmarking against current operations
·Financial analysis modeling &
·Identification of opportunities, risks and risk mitigation.

 

The subsequent report was published on SEDAR on May 4, 2017. On publication of the report, by MaSS, entitled “Updated Independent Technical Mining Reserve Estimate and Economic Feasibility Study on the Buckreef Gold Mine Project, Tanzania, East Africa”, the Ontario Securities Commission (OSC) conducted a routine review of the MaSS report’s contents and raised some queries that necessitated a review of the original report compiled by MaSS. Virimai Projects, from Zimbabwe, was then commissioned by Tanzam2000, to carry out an in-depth review of the original report by MaSS with the objective of amending and recompiling the ITR in compliance with NI43-101. Virimai Projects’ Consulting Director, Wenceslaus Kutekwatekwa (FSAIMM) is the Qualified Persons (QP) under the terms specified under of NI43-101.

 

The purpose of this Technical Report is to deliver a pit optimized Mineral Reserve estimate and projected mineral economics and financial analysis for the proposed open-pit gold mining and ore processing operations at Buckreef. The effective date for this Technical Report is June 26, 2018.

 

In addition to site visits, Virimai Projects held multiple discussions with technical personnel from the Company regarding all pertinent aspects of the project and carried out a review of available literature and historical documented reports and results on the property.

 

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The reader is referred to those data sources, which are outlined in the References section of this report, for further detail. TRX’s goal for this study is to maximize the underlying value of the mineral resource by employing the correct project concepts, in alignment with its corporate goals and development strategies.

 

The Buckreef Gold Mine Project is comprised of Buckreef Special Mining License Area (SML04/1992) which currently encompasses four (4) gold deposits namely, the Buckreef Prospect, the Eastern Porphyry Prospect, the Bingwa Prospect and the Tembo Prospect (Figure 4.1). This ITR was prepared by MaSS Resources Limited at the request of Peter Tererai Zizhou, General Manager (Operations) for Buckreef Gold Company Limited and amended by Virimai Projects.

 

The purpose of the Technical Report is to provide independent Mineral Resource and Mineral Reserve estimates of the gold mineralization present at the Project, in conformance with the Standards required by NI 43-101 and Form 43-101F1 as at June 26, 2018.

 

2.4Sources of Information

 

This Technical Report is based in part on various internal company reports, maps, published reports and public information as fully listed in Section 27 “References” of this report. Sections from reports authored by other specialist consultants who have been directly quoted or summarised in this report are indicated in Section 2.1 of this report. It should be noted that the authors of this report have made use of selected portions from material contained in the following NI43 101 Compliant Technical Report “Update National Instrument 43-101, Independent Technical Report on the Buckreef Project in Tanzania for Tanzanian Royalty Exploration Corporation” dated 24th February 2014 by Venmyn Deloitte. This report is publicly available on SEDAR (www.sedar.com)

This Study has been completed using the previously mentioned Technical Report as well as available information contained in, but not limited to, the following reports, documents and discussions:

 

·Technical discussions with Buckreef personnel
·Personal inspection of the Buckreef Gold Project property
·RSG Global, - Metallurgical Test-work Review and Recommendations for the Buckreef Project, July 2004;
·Metallurgical Project Consultants Pty Limited, - Phase 2 Metallurgical Test-work Summary, February 2007;
·Historic exploration information from previous holders of the exploration rights, IAMGOLD Corporation (IAMGOLD), which surrendered the rights and exploration information to the Tanzanian government in 2009. The historic information is in the possession of TRX by virtue of the joint venture with Stamico;
·In-house exploration results from surveys undertaken by IAMGOLD in the course of its tenure;
·Published Venmyn independent specialist studies commissioned by TRX for the 2012 PEA and

 

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·Published Venmyn independent technical Sound Mining (SMS), Buckreef Gold Project Mining Study, - Preliminary Economic Assessment, January 2012;
·Venmyn Independent Projects (Pty) Limited, - National Instrument 43-101 Preliminary Economic Assessment of Tanzania Royalty Exploration Corporation’s Buckreef Gold Mine, Re-development Project in Tanzania, May 31st, 2012;
·ENATA LTD, - Environmental Impact Assessment for Gold Mining Project at Mnekezi Village in Geita District, Geita Region, Tanzania; February 2014;
·Venmyn Deloitte, - Update National Instrument 43-101, Independent Technical Report on the Buckreef Project in Tanzania for Tanzanian Royalty Exploration Corporation; February 24th, 2014
·Internal Buckreef unpublished reports received from Buckreef staff and additional information from the public domain

 

Virimai Projects are of the opinion that the basic assumptions contained in the information above are factual and accurate and that the interpretations are reasonable. Virimai Projects has relied on the data and has no reason to believe that any material facts have been withheld. Virimai Projects also has no reason to doubt the reliability of the information used to evaluate the mineral resource presented herein.

 

2.5Site Visit

 

Virimai Projects representatives conducted a week-long site visit to Buckreef from the 13th April 2018 to 21st April 2018. Virimai Projects team comprised Messrs Arimon Ngilazi a geologist, Wenceslaus Kutekwatekwa, Wonder Mutematsaka and Clarence Ndunguru, all mining engineers. The purpose of the visit was to provide the project team members with a general overview of the Buckreef Gold Project property and review the current development milestones and planning that had taken place. Buckreef staff was at hand to provide a tour of the four properties of Buckreef Gold Project and give a background of the historical, geological setting of the gold project. During this period the team reviewed the core storage facilities and also had a chance to review the geological data.

 

2.6Acknowledgement

 

Virimai Projects would like to extend their gratitude and acknowledge the support provided by Buckreef staff during their visit to the project. The project team greatly benefited from the collaboration and input from Mr Peter Zizhou the General Manager of Tazam2000 and his staff. Further the team had two meetings with consultant team members from MaSS Resources of Mwanza who were involved in compiling some of the internal reports of Tanzam2000. The contributions of these team members are gratefully acknowledged.

 

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3.RELIANCE ON OTHER EXPERTS

 

3.1Report Responsibility and Qualified Persons

 

Virimai Projects prepared this Technical Report using the reports and documents noted in Section 27 Reference of this report. Virimai Projects has not performed an independent verification of the land title and tenure as summarised in Section 4 of this report. Virimai Projects did not verify the legality of any underlying agreements that may exist concerning the permits or other agreements between third parties but has relied upon the undertaking made by TRX. Any of the opinions expressed in this study are given in good faith and in the belief that such statements or opinion are not also and misleading at the date of this Report. Virimai Projects is not aware of any known litigation potentially affecting the Buckreef Gold Project.

 

The estimates are based on a certain number of drill holes and samples, and on assumptions and parameters currently available as stated in this report. The level of confidence in the estimates depend upon a number of uncertainties. These uncertainties include but are not limited to: future changes in gold price and/or production costs, differences in size, grade and recovery rates from those expected, and changes in project parameters. In addition, there is no assurance that the project implementation will be carried out in the stated time frame.

 

 

 

 

 

 

 

 

 

 

 

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4.PROPERTY DESCRIPTION AND LOCATION

 

The Buckreef Gold Project is a description of four gold prospects which are namely Buckreef, Eastern Porphyry Tembo and Bingwa located in the Mnekezi Village in Geita District in north-central Tanzania. The project area is located 40km south west of the town of Geita, which in turn is approximately 110km south-west of the second largest city Mwanza (Figure 4.1).

 

The area is fully located by the following Geographical co-ordinates:

 

·Latitude 03ᵒ 5′ 27.69″ S Longitude 032o 1′ 20.65″ E (ARC 1960 UTM Zone 36m: Latitude 391,367.93mE; Longitude 9,658,326.9mN)

 

Figure 4.1: Location of the Buckreef Gold Project, Gieta District Tanzania

 

4.1Mineral Tenure

 

The Buckreef Gold Project is a gold exploration project comprises, a single Special Mining License covering an area of 16.04km2 and 12 Prospecting Licenses covering 98.19km2 (Figure 4.2).

 

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Figure 4.2: Buckreef Gold Project, TRX License Holdings, Geita District, Tanzania

 

The current Mineral Resources and Mineral Reserves for the Buckreef Gold project are declared over Special Mining License block SML04/1992.

 

In March 2017, the Buckreef gold special mining license (SML04/92) which covers an area of 16.04km2, was successfully renewed for a further 10 years to 16th June 2027. The licenses are operated by Buckreef Gold Company Limited, the Tanzam2000 (a subsidiary company of Tanzanian Royalty Exploration).

 

4.2Mining Rights in Tanzania

 

4.2.1Basis for Mineral Title

 

The state owns title to all mineral resources in The Republic of Tanzania. All permits conferring rights to explore and extract mineral resources are granted by the Minister of Energy and Minerals, (“MEM”) in terms of the Tanzania 2010 Mining Act. The Mining Act serves as the legal framework governing mining in the Tanzania.

 

4.2.2Exploration Permits (Rights and Obligation)

 

The Ministry of Energy and Minerals (MEM) is responsible for guiding the development of the mining industry in Tanzania through the Mineral Division. The Tanzanian Mining Act, 2010, the Explosives Act, 1963, and the Mining (Mineral Rights) Regulations, 2010, regulate the law relating to prospecting and exploiting minerals, including granting, renewals, royalties, fees and other charges.

 

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Mineral property and control over minerals is vested in The United Republic of Tanzania. Only companies incorporated in Tanzania may hold mineral rights in Tanzania; however, exploration and mining is open to foreign concerns. Royalties are charged on gross value which for precious metals is 6% and district council where a gold mine is located is entitled to collect a 0.3% on the revenues from gold production as service levy. There is no mandatory participation by the State although joint ventures with local companies are encouraged

 

Mineral rights under the Mining Act include Prospecting Licenses (PL), Retention Licenses (RL), Special Mining Licenses (SML), Mining Licenses (ML), Processing Licenses, Smelting Licenses and Refining Licenses. The prospecting license is granted for an initial period of 4 years. Upon 1st renewal, if the area is greater than 20 sq. km then 50% must be relinquished and the license is then valid for a further 3 years. Upon second renewal, if the license is greater than 20sq km then 50% must be relinquished and the license is then valid for a further 2 years. Mining Licenses are granted for an initial period of 10 years for medium scale mining operations with a capital investment between US$100,000 and US$100 million and are renewable. An Environmental Certificate issued by the National Environment Management Council (NEMC) is a prerequisite to the granting of a Mining License.

 

Special Mining Licenses (SML) are granted for large scale mining operations with a capital investment of more than US$100 million and are valid for the estimated mine life determined in the Feasibility Study (FS). Holders of special mining licenses may enter into a Mining Development Agreement (MDA) with the Government which is subject to review every five years and at the renewal of the mineral right.

 

MDAs can guarantee fiscal stability for a long-term mining project, cover environmental matters which are project specific and not covered by the Mining Regulations, requirements for the procurement of goods and services available in Tanzania and the employment and training of citizens of Tanzania and the terms of State participation in long-term mining projects.

 

4.2.3Project Mining Permits

 

The Buckreef Project comprises four gold deposits, namely Buckreef (North, Main & South), Bingwa, Eastern Porphyry and Tembo all located within a single Special Mining License, SML04/1992 (Figure 4.2). Geographical co-ordinates for each respective deposit are:

 

·Buckreef North: Latitude 03ᵒ 5′ 27.69″ S Longitude 032o 1′ 20.65″ E (ARC 1960 UTM Zone 36m: Latitude 391,367.93mE; Longitude 9,658,326.9mN)

 

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·Buckreef Main: Latitude 03ᵒ 5′ 27.69″ S Longitude 032o 1′ 20.65″ E (ARC 1960 UTM Zone 36m: Latitude 391,367.93mE; Longitude 9,658,326.9mN)
·Buckreef South: Latitude 03ᵒ 5′ 27.69″ S Longitude 032o 1′ 20.65″ E (ARC 1960 UTM Zone 36m: Latitude 391,367.93mE; Longitude 9,658,326.9mN)
·Bingwa: Latitude 03ᵒ 5′ 27.69″ S Longitude 032o 1′ 20.65″ E (ARC 1960 UTM Zone 36m: Latitude 391,367.93mE; Longitude 9,658,326.9mN)
·Eastern Porphyry: Latitude 03ᵒ 5′ 27.69″ S Longitude 032o 1′ 20.65″ E (ARC 1960 UTM Zone 36m: Latitude 391,367.93mE; Longitude 9,658,326.9mN) &
·Tembo: Latitude 03ᵒ 5′ 27.69″ S Longitude 032o 1′ 20.65″ E (ARC 1960 UTM Zone 36m: Latitude 391,367.93mE; Longitude 9,658,326.9mN).

 

Figure 4.2 Buckreef Project: Deposit Locality within Special Mining License Boundaries, Geita District

 

The boundaries of the mining lease (SML04/1992) have been surveyed, whereas the boundaries of other, un-surveyed prospecting licenses are sourced from the Tanzanian Ministry of Energy and Minerals license maps.

 

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4.2.4Underlying Agreements

 

The Buckreef Gold Project is a gold exploration project which was originally held by IAMGOLD prior to July 2009. The “Agreement to Redevelop the Buckreef Gold Mine (ARBGM) between IAMGOLD and the Ministry for Energy and Minerals included at that point, a single Special Mining License and 12 Prospecting Licenses covering 98.19km2.

 

In July 2010, IAMGOLD applied to surrender all licenses relating to the ARBGM, effective 25 October 2009, and the Commissioner for Minerals withdrew all license applications relating to the ARBGM. In 2010, TRX was invited by STAMICO on behalf of the Ministry of Energy and Minerals, to tender for the opportunity to negotiate a joint venture agreement with respect to the Buckreef Gold Project.

 

TRX was awarded the tender, as confirmed in a letter from the Director General of STAMICO dated 16 December 2010. In October 2011, TANZAM2000, a 100% owned subsidiary of TRX signed a joint venture agreement with STAMICO with regards to the Buckreef Gold Project. Through this JV agreement, a Tanzanian registered JV company, Buckreef Gold Company Limited, was formed with an equity holding of 55% Tanzam2000 and 45% STAMICO. In terms of the agreement, TRX through its subsidiary, Tanzam2000 will manage the Buckreef Project and is responsible for providing exploration and mine development financing. TRX expects that the project to be financed through debt or a combination of debt and equity. Net profits will be divided in accordance with the parties’ ownership interests after payment of all project expenses including debt service.

 

4.2.5Environmental Considerations

 

TRX initiated an environmental study of the Buckreef project area in 2012 by commissioning ENATA to undertake a preliminary socio- environmental study. As a result of the socio-environmental studies that were undertaken during the period 2004 to 2014 Buckreef was issued with an EIA certificate in terms of the Environmental Management Act No 20 of 2004 in May 2014 which is valid for the life of the mining project. The EIA certificate was issued with four main conditions which included the following:

 

1)Installation of deep and shallow groundwater monitoring borehole around the waste rock dumps and the tailings storage facilities.
2)Installation of wall monitoring systems for the tailings dam facility to check for any likely movement of the walls.
3)Maintain a data base of the current and previous data on air, dust and noise levels in the Buckreef area.
4)Install water quality monitoring systems for the Nyamazovu River and Dam.
5)Carry out annual environmental audits of the mining area for submission to the EMA.

 

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5.ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

 

5.1Accessibility

 

The Buckreef Project is situated in the Geita district, approximately 110km southwest of Mwanza. The hinterland northwest of Dar es Salaam is connected by a poorly maintained bitumen road, unreliable train service and several daily commercial flights. Mwanza is the nearest major population centre to the project, approximately 60km northeast of Buckreef, and is the second largest city in Tanzania with a population of one million people.

 

Access to the project area is via ferry from Mwanza across Smith’s Sound, then via sealed road through the township of Geita. Alternative access is via sealed road through Shinyanga and Kahama, and subsequently via gravel road north to Bulyanhulu and then west to Nyarugusu.

 

The project can also be accessed by scheduled light aircraft flights (Coastal Air Services) from Mwanza to the airstrips located at Bulyanhulu or Geita Gold Mines, or more directly by charter to the bush airstrips located at Buckreef Mine or Nyarugusu Village. Access to the project area can be hampered in the rainy season

 

The project site itself lies 15 km south-east of Katoro Township on a series of unpaved roads. Within the project area, access is via local tracks and paths which are suitable for two-wheel drive vehicles in the dry season and four-wheel drive vehicles in the wet season.

 

5.2Climate, physiography, local resources & infrastructure

 

5.2.1Climate

 

In the project area, the wet season is overcast, the dry season is partly cloudy, and it is warm year-round. Over the course of the year, the temperature typically varies from 13°C to 30°C and is rarely below 11°C or above 32°C (Figure 5.1).

 

 

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The project experiences a temperate climate, with sub-humid moderate temperatures all year round. The mean annual rainfall is 1,264 millimetres (mm) (Veiga, 2004) and the Geita District has a bi-modal summer rainfall distribution, with two main rainy seasons: one from November to December and the other from February to May.

 

The period from June to August is usually dry. The rain occurs as localized storms rather than in a generalized downpour and runoff from the upland ridge and hardpan ferricrete areas on BRMA is very high (Figure 5.2). The run-off generates rapid response stream-flow and sheet-flow. The water table varies markedly from season to season which can influence drilling conditions. Consequently, the dry season, occurring between May and September is preferable for drilling programs and field operations. During the wet seasons, access is limited across black cotton soils. River drainages are impassable in the wet season without suitable bridge construction.

 

 

 

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The annual minimum and maximum temperatures for Geita range between 14°C and 30°C. September is the warmest month with an average temperature of 29.2°C at noon, while July is coldest with an average temperature of 14.6°C at night (Figure 5.3). The area has no distinct temperature seasons and the temperature is relatively constant during the year. July is on average the month with most sunshine (Henning, 2011). The proposed project area is regarded as humid and the climate is classified as a tropical savannah (winter dry season), with a subtropical moist forest bio-zone (Henning, 2011).

 

 

The climate in the Buckreef Project area is a major determinant of the geographical distribution of plant species and vegetation types. Local conditions of temperature, light, humidity and moisture vary greatly and the project design must accommodate this local climate variation to ensure that erosion is avoided, sensitive species or habitats are not destroyed, and material stockpiles are not damaged by meteorological events.

 

5.2.2Physiography

 

The average attitude of the Geita district ranges between 1,300 to 1,100 meters above sea level (m.a.s.l). The Geita district is characterized by hilly topography in the north, west and parts of the south west, with a gentle slope towards the south and southeast (Figure 5.4).

 

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Figure 5.4 Buckreef Project: Physiographic Map of North western districts of Tanzania

 

There are pediments that are gently sloping towards the drainage depressions which are vulnerable to erosion, particularly where vegetation cover has been removed through cultivation, mining or overgrazing.

 

The Buckreef Project is dominated by very subdued terrain. Low rolling plateaus are cut by incised rivers on north, south and west sides. Major features are long ridges capped by hard iron-rich laterite (“cuirasse”). Where indigenous vegetation has not been cleared is dominated by miombo woodland.

 

There is one dam and one borehole at the Buckreef site at present. Water is in relatively enough supply for the current requirement and will need to be upgraded to meet mine requirement. The current supply is enough for drilling purposes, domestic use at the camp etc.

 

5.3Local Resources

 

Geita town is an established mining community, located 45km northeast of the Buckreef Project, with a fluctuating population of approximately 2,500 people. The town was established to service AngloGold’s Geita Gold Mine that has been in existence since the early 1930s.

 

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Mining supplies, equipment, and services and a skilled mining and mineral exploration workforce are readily available in Mwanza and the mining communities in the Lake Victoria gold belt (LVG) that has a long history of mining, which helps to attract employees and contractors from throughout Africa.

 

The project area is densely populated with individual and/or agglomerations of dwellings related to transient artisanal gold mining activities and pastoral farming. Local small pastoral villages are poor sources of logistical support though communication in the area is provided by a modern cell phone network, which has coverage in virtually all sectors of the LVG (Figure 5.5).

 

5.4Infrastructure

 

Buckreef is 12km from the emerging town of Katoro and 5km from Rwamgasa, aslo an emerging town both essentially based on small-scale mining and farming activities. General area infrastructure includes provincial roads, a 110kV transformer sub-station from the Tanzania Electricity Supply Company (TANESCO) grid power to Buckreef Mine, Tanzania Telecom land line and modern cellular phone coverage by several providers including Vodacom, Airtel, Halotel and Tigo.

 

The surface rights and area covered by the Special Mining License are sufficient for future mining operations including processing plant, open pit development, waste rock sites, tailings storage facilities and office and housing needs. The process plant will be constructed and licensed to operate at up to 180t per hour. The Company will construct sufficient accommodation on-site for all personnel and provides cafeteria services for employees housed in the Project’s current onsite camp accommodation.

 

Geita town is the main full service community with available housing, hospital, police, fire department, potable water system, restaurants and stores. Geita town, located ~45km to the NE is linked to the emerging Katoro township by a wide tarred road and a dirt all-weather road links Katoro and Rwamagaza hamlets passing right through the Buckreef project area. Police posts are established at Katoro, Rwamagaza and Buckreef and manned by the Tanzanian Police personnel for security as well. The Buckreef Mine site is also serviced by a 1,000m gravel airstrip to provide emergency medical evacuation.

 

The Buckreef Mine infrastructure currently includes a defunct vertical shaft, open-pit and waste rock dump at the pilot South Pit, borehole for domestic water sources, pumps and waterlines, 110kV power sub-station, defunct heap leach pads, 10tph Carbon-in Column process plant, 200tph crusher unit with scrubbers plus mine buildings including offices and residential houses for workers. TANESCO provides electrical power to site via a single transmission line. Power and water availability are adequate for current requirements and will be upgraded to meet future mining requirements.

 

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Fuel will be trucked in from the town of Mwanza and the district is well serviced by access roads to various operating large and medium scale mines in the district. The infrastructure surrounding the Buckreef Project area is generally poor and unpaved roads are poorly maintained rendering access during the rainy season difficult but passable.

A site drawing of the Buckreef project access road and services is shown in Figure 5.5.

 

Figure 5.5 Ortho-Photograph of the historical Buckreef Gold Mine Infrastructure, Looking North

 

In order to comply with regulations pertaining to the 500m-blast safety zone for open pit mining, some of these facilities (used during exploration and pilot mining activities), will be moved and/or demolished during planned Buckreef mining operation.

 

The Buckreef mine planned mining activities, facilities and infrastructure are to be located within the Special Mining Lease SML04/92 and the key components of the Project are expected to include, but not be limited to open pit mines; waste rock dumps; a central ore stockpile; a central crushing plant and mill feed storage area; a central ore milling and processing plant; water management facilities; tailings storage facility (TSF); power supply and associated infrastructure; explosives storage area; mine operation buildings; service water supply and associated infrastructure; sewage treatment; mine-site roads and parking areas; hazardous materials storage and housing ad office facilities. Detailed descriptions of these facilities are provided in Chapter 18 below.

 

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Details for all project components will be provided in a certified closure plan to be developed following completion of the feasibility level engineering.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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6.HISTORY

 

The Lake Victoria Goldfield was discovered in 1894 by German explorers and significant exploitation began in the 1930s at the Geita Gold Mine. Several small gold mines exploiting near surface reefs, operated throughout the Rwamagaza Greenstone Belt, particularly near the village of Rwamagaza. By 1940, Tanzania was producing 4.5tpa of gold (Au).

 

Gold bearing quartz veins were reported from the current Buckreef Mine area in 1945 and reports from the 1950s attest to ongoing production at several localities near Rwamagaza, including the Buckreef area. The extent of the small-scale local and colonial mining activities is evident from the numerous pits and adits covering the entire Buckreef tenement, however no production figures are available.

 

The Buckreef Mine was an underground mine exploited in the name of the Buckreef Gold Mining Company owned by the Tanzanian State Mining Company (STAMICO) in 1972. A brief summary of the more significant exploration and mining activities covering the Buckreef project area is discussed below.

 

6.1Previous Exploration Work

 

6.1.1State Mining Corporation (STAMICO) ERA (1960-1990)

 

Following some artisanal mining activities in the 1960s, a United Nations Development funded 13-hole core drilling program for the government owned Tanzania Mineral Resources Department and this defined 107m long by 8m wide mineralized zone down to a depth of 122m. In 1968, the parastatal, Tanzania Mineral Resources department conducted another 13-hole core drilling program whose results were not made public.

 

The first attempt at underground development was undertaken by Williamson Diamonds Ltd in 1970, when the Buckreef Main shaft was sunk to 75m and lateral developments were done at 30m and 60m depths respectively based on a ore reserve estimate of 106,000t @ 8.7g/t. The mining results failed to meet expectations and no production records were availed and the mine closed down and the projected reverted back to the Tanzania Mineral Resources department.

 

In 1972, the Tanzanian government approved an investment decision on the project that resulted in the formation of the state-owned Buckreef Gold Mining Company (BGMC) as owner of the project. During the period 1973-1977, BGMC drilled a further 3 diamond core holes while undertaking further lateral underground developments. From 1978 to 1981, the Swedish International Development Agency (SIDA) financed construction of a carbon-in-pulp (CIP) process plant and other mine infrastructure facilities. From 1982 to 1988, underground mining was resumed on unspecified ore reserve figures.

 

However, gold production again failed to meet expectations and only achieved 25-40% of target forecast reportedly due to a 65% discrepancy between Mine laboratory and International Laboratory assays according to a consultant investigation report. Underground mined was ceased and the workings flooded in 1990 with a total reported ore extraction estimated as 100,000t @ 3-4g/t.

 

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6.1.2Comprehensive Exploration ERA (1992-2010)

 

From 1992 to 1994, East Africa Mines Ltd. entered into an exploration agreement with the Tanzania Mineral Resources Department, now renamed STAMICO and commenced regional and project scale reverse air blast (RAB), reverse circulation (RC) and diamond core (DC) drilling centered on the Buckreef main shear structure. The results of their exploration program culminated in the signing of the first Buckreef Redevelopment Agreement (“BRDA”) with Stamico.

 

In 1996, Spinifex Gold, an Australian registered junior exploration company acquired East Africa Mines Ltd and took over responsibility on the BRDA. In 2003, Spinifex Gold was acquired by Gallery Gold, another Australian registered mining and exploration company. In 2006, Gallery Gold was subsequently acquired by IAMGOLD, a Canadian registered mining and exploration company who then entered into the second BRDA with STAMICO.

 

IAMGOLD undertook a US$12 million a 4-year exploration program that included regional airborne geophysical surveys, project scale soil surveys and trenching, 65,000m of exploration and reconnaissance drilling and 70,000m of resource definition, metallurgical and hydrogeological drilling. This program resulted in the first Pre-Feasibility report published on the Buckreef project in 2009. The report indicated a historic (non NI 43-101 compliant) Mineral Resource on three major deposits as 9.9Mt @2.7g/t Au (Buckreef North, Main & South), 0.506Mt @3.87g/t Au (Bingwa) and 0.477Mt @2.9g/t Au (Tembo).

 

In early 2010, IAMGOLD then surrendered the project back to STAMICO as part of a corporate decision to relocate and concentrate on projects in Mali.

 

6.1.3Post 2010 ERA

 

In October 2010, Tanzanian Royalty Exploration Corporation (TRX) signed a Memorandum of Understanding (MOU) with STAMICO and commenced negotiating a Joint Venture (JV) on the Buckreef Re-Development Agreement. TANZAM200, a 100% owned subsidiary of TRX signed a substantive joint venture agreement with STAMICO with regards to the Buckreef Project.

 

Through this JV agreement, a Tanzanian registered JV company, Buckreef Gold Company Limited, was formed with an equity holding of 55% Tanzam2000 and 45% STAMICO. TRX thus acquired a 55% interest in and operatorship of the project.

 

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6.2Historical Mineral Resource Estimates

 

In 2011, Hellman and Schofield (Pty) Ltd, an independent consultant previously engaged by IAMGOLD, was retained by TRX to undertake Mineral Resource estimation for the Buckreef Project. The Mineral Resource estimates, independently interrogated and reviewed by Venmyn Deloitte (Pty) Limited, were subsequently reported and published on SEDAR in the June 2011 as an NI43-101 compliant Independent Technical Report (ITR D1030-Venymn) as part of a due diligence study of the Buckreef project for TRX soon after acquisition of the Project.

 

In 2012, Venmyn Deloitte (Pty) Limited then completed a Preliminary Economic Assessment of the Buckreef project for TRX and the results of the PEA were reported in a Canadian National Instrument 43-101 (NI 43-101) Independent Technical Report (ITR) (VIP 21 August 2012). The PEA was based on the previously published Mineral Resource estimate at a 0.5g/t Au cut-off grade, as presented in the table below:-

 

Table 6.1 Mineral Resource Estimate for the BRMA (NI 43-101 Compliant – Dec 2011)

 

 

DEPOSIT

MEASURED INDICATED INFERRED MEASURED & INDICATED

 

Tonnes (Mt)

Au Grade (g/t)

 

Cont,d Au (Moz)

 

Tonnes (Mt)

Au Grade (g/t) Cont,d Au (Moz)

 

Tonnes (Mt)

Au Grade (g/t) Cont,d Au (Moz)

 

Tonnes (Mt)

Au Grade (g/t) Cont,d Au (Moz)
Buckreef 5.18 2.05 0.34 3.71 1.86 0.22 7.16 1.89 0.44 8.88 1.97 0.56
Bingwa             1.12 2.40 0.90      
Tembo             0.73 2.18 0.05      
TOTAL 5.17 2.05 0.34 3.71 1.86 0.22 9.00 1.98 0.57 8.88 1.97 0.56

 

Source: Hellman and Schofield 2007, 2011, Venmyn 2011

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability

Mineral Resources inclusive of Mineral Reserves (although no Mineral Resources are reported for the PEA) Estimates over variable widths to 3m to 40m

Bulk Density ranges 2.0g/cm3 to 2.8g/cm3 Inconsistencies in totals are due to rounding down 55% attributable to TRX

Cut-off grade 0.5g/t Au

 

6.2.1Existing Resource Estimates

 

During the period 2013 to 2014, Venmyn was again commissioned by Tanzam2000, a subsidiary to Tanzanian Royalty Exploration Corporation, to produce a second independent NI43-101 compliant report titled “Independent Technical Memorandum on the Mineral Resource Estimate for Tanzanian Royalty Exploration Corporation’s Buckreef Project in Tanzania” subsequently published as ITR V119R of 30th April 2014. This incorporated newly identified mineralization identified in various deposit extensions and also from additional resource drilling conducted by TRX on the project. This led to an increase the published Mineral Resource estimate of the Buckreef Project at a 0.5g/t Au cut- off grade, as presented in the table below:-

 

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Table 6.2 Buckreef Project NI43-101 Compliant Mineral Resource Estimate (0.50g/t cut-off- grade – Venymn April 2014)

 

  Measured Indicated Inferred

 

Prospect

 

Tonnes

 

Grade

Contained Gold

 

Tonnes

 

Grade

Contained Gold

 

Tonnes

 

Grade

Contained Gold
Mt g/t oz Mt g/t oz Mt g/t oz
Buckreef 8.902 1.72 491,529 13.1 1.41 594,456 7.528 1.33 322,902
Eastern Porphyry

 

0.087

 

1.20

 

3,366

 

1.016

 

1.17

 

38,355

 

1.239

 

1.39

 

55,476

Tembo 0.017 0.99 531 0.185 1.77 10,518 0.267 1.93 16,521
Bingwa 0.906 2.83 82,387 0.569 1.38 25,274 0.312 1.29 12,922
Total 9.912 1.81 577,813 14.87 1.40 668,603 9.346 1.36 407,821

 

Source: Venmyn Deloitte 2013, CAE Mining 2013 and TRX 2013

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability

Mineral Resources reported inclusive of Mineral Reserves (although no Mineral Reserves are reported) Cut-off Grade 0.5g/t Au

Estimates over variable widths to 1m to 40m Specific Gravity ranges 2.0 to 2.8 Inconsistencies in totals are due to rounding 55% attributable to TRX

 

As no further or recent exploration work has been undertaken at the Buckreef project, Virimai Project resolved to independently check and verify the Mineral Resource estimates and information from Table 6.2 above that was taken from a report completed under NI 43-101 standards and amended and filed on the System for Electronic Document Analysis and Retrieval, “SEDAR”, (www.sedar.com), on April 30, 2014. The authors of the Buckreef Resource Independent Technical Report (ITR V119R), produced for TRX, were Qualified Persons F. Harper (Pri.Sci. Nat.; MGSSA) and S. Lambert (MSAIMM, MGASA, MSAIP).

 

 

 

 

 

 

 

 

 

 

 

 

 

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7.GEOLOGICAL SETTING AND MINERALIZATION

 

7.1Regional Geology

 

The Buckreef Project is situated within the LVG of northern Tanzania which consists of a number of east-west trending, linear, Archaean greenstone belts. The LVG is the third largest gold producing region of Africa, surpassed only by the Witwatersrand Basin in South Africa and the Tarkwa region of Ghana. Numerous gold occurrences have been identified in the LVG and new discoveries continue to be made. Since 1998, when the first mine, Golden Pride was commissioned, four additional large scale mines namely, Geita, Bulyanhulu, North Mara, and Tulawaka have come into commercial production. Geita and Bulyhanulu are considered world-class deposits, together representing in excess of 35Moz of gold resources.

 

The Sukumaland Greenstone belt is one of eight Achaean greenstone belts that occur within the Lake Victoria Goldfield of northern Tanzania. The stratigraphy of Lake Victoria Goldfield (LVG) can be divided into three major groups; the Lower Nyanzian, Upper Nyanzian and Kavirondian. The Sukumaland Greenstone Belt has an outer arc (Upper Nyanzian) and inner arc (Lower Nyanzian) stratigraphy cored by granitic rocks. The Rwamagaza greenstone Belt which forms the inner arc of Sukumaland Greenstone Belt (Figure 7.1) comprises dominantly mafic volcanic stratigraphy with minor felsic feldspar porphyry and quartz-feldspar porphyritic, flow-banded rhyolite all. Ultramafic rocks occur in isolated locations in the area to the west of the Busolwa-Buziba prospects.

 

Figure 7.1 Regional Geology Map, Buckreef Gold Project, Lake Victoria Greenstone Belt, Tanzania

 

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The top of the Lower and upper Nyanzian system is overlain by Kavirondian age rocks. Apart from occurrences in North Mara, Nikonga and BulangaMurwa, the Kavirondian is not widely distributed in the LVG. The Kavirondian rocks are generally coarse clastic molasses that include polymictic conglomerate, gritstones, quartzites, shales and siltstones, metatuffs and intermediate to acidic volcanics and while no clear tectonic setting has been put forward for these rocks, it is speculated that they were deposited in small pull apart basins.

 

The regional metamorphic grade of the Nyanzian is largely low grade, greenschist facies though areas of amphibolite facies are recorded, for example at Msasa and Tulawaka Mine. Local contact metamorphism caused by granite intrusions is also developed, but in general higher grade metamorphic complexes are rare.

 

The greenstone belts are set in a terrain of syntectonic granite, granite gneisses, late kinematic granites and associated felsic intrusives. There is a general lack of detailed regional mapping and standardization of lithological names in the LVG and consequently there is no officially recognized division of this terrain. Quennel (1960) has proposed a fivefold classification for the intrusions (G1 – G5), however subsequent authors, notably Barth (1990) and the UNDP (1986b) adopted a simpler two-fold classification dividing the intrusions into synorogenic and late kinematic cycles.

 

The synorogenic cycle (G1, G2 and G3 granites) is comprised of migmatites, foliated and porphyroblastic granites, biotite – hornblende granite, tronhjenite, granodiorite, tonalite, adamelite, monzanite and quartz diorite. These lithologies include all those formed by interaction with the greenstone belts and the theoretical pre Nyanzian age granitoid basement. It is probable that some of these early units are synvolcanic intrusives that fed the felsic volcanism of the Nyanzian greenstones. The late kinematic granites (G4 and G5) are probably post Nyanzian age and possibly post Kavirondian age intrusive events. Typically, these intrusive include biotite granites, porphyritic biotite granites, microgranite, feldspar porphyries and felsophyric dykes and where mixing with the greenstone belt lithologiesoccurs the rocks become locally gneissose in texture and granodioritic in chemistry. These late intrusions often appear circular and there is evidence of slight banding suggesting a diapiric origin. However, some are less regular in shape and in the Nzega, Geita and eastern Iramba Sekenke Greenstone belt appear to have an alignment along the 1100 and 0700 or have contacts affected by these directions.

 

Numerous dolerite, gabbro and ultramafic bodies have been intruded in to the Lake Victoria Goldfields. Possibly the most significant phase is related to a system of north south, west southwest trending magnetic dolerite dykes. While they rarely crop out they are often identifiable from magnetic surveys. The trends of the north south dykes maybe divided into two sub sets, 3500 and 0100 (Halls et al, 1984). The 3500 subset is largely confined to the Tanzanian craton area and where they intersect the Proterozoic age Ubendian or Usagaran belts they are highly altered hence have an age pre 2100Ma. In contrast the 0100 subset is largely unaltered and is observed cross cutting the Lower Proterozoic Ubendian belt indicating an age younger than this orogenic event. Barth does not differentiate between the two sets and believes them both to be of Karroo age.

 

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The regional structure is poorly understood and the correlation of specific structures from one greenstone belt to another is difficult.

Two phases of folding are generally recognized in the Nyanzian System (Barth, 1990). The first phase generated symmetric, east west trending, isoclinal folds. It is likely that this was coincident with tectonic stacking and thickening i.e. thrusting. Following this early phase, a second phase of cross folds with axial planes striking approximately 1000 - 1200 developed. These are coincident with major dextral lineaments that cross cut the LVG area (Figure 7.2).

 

Figure 7.2 Regional Structural Setting, Buckreef Project, Rwamagaza Greenstone Belt, Geita District, Tanzania

 

A key factor in the localization of gold mineralization seems to be where this second phase and/or regional lineaments cross cut the primary east – west phase.

 

The Lake Victoria Goldfield is the third largest gold producing region of Africa, surpassed only by the Witwatersrand Basin in South Africa and the Tarkwa region of Ghana. Numerous gold occurrences have been identified in the LVG, and new discoveries continue to be made. Since 1998, when the first mine, Golden Pride was commissioned, four additional large-scale mines namely, Geita, Bulyanhulu, North Mara, and Tulawaka have come into production. Geita and Bulyanhulu Mines are considered world-class deposits, together representing more than 60Moz of gold resources.

 

The Lake Victoria Goldfield has geological and structural similarities to major gold districts in the Canadian Shield (Val d´Or, Kirkland Lake) and the Yilgarn Craton in Western Australia (Kalgoorlie, Laverton, Leonora, Kambalda and Southern Cross). Gold mineralization within the Lake Victoria Goldfield occurs in number of styles including: -

 

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·quartz veins within minor brittle lineaments, most commonly worked on a small-scale by artisanal workers, due to their limited extent and erratic gold distribution (such as at Bulangamirwa workings in the Nzega Greenstone Belt);
·mineralization within major ductile shear zones;
·mineralization associated with replacement of iron formation and ferruginous sediments; and
·felsic (porphyry) hosted mineralization, such as within the Rwamagaza Greenstone Belt.

 

Nutt (2003) also notes that approximately 19% of known gold occurrences in the LVG are associated with or hosted in part, by felsic intrusives (excluding granitoids) and significantly at least four of the larger gold deposits have known diorite or quartz and/or feldspar porphyry’s in close association i.e.:

 

·Geita Group (diorites and felsics),
·Bulyanhulu (quartz porphyry),
·Golden Pride (quartz porphyry or rhyolite bodies) and
·Mobrama deposit – North Mara Group (siliceous felsic rock, protolith: quartz porphyry).

 

Regardless of the geological environment, it is accepted that structural control on the emplacement of the mineralization is critical. The following structural features have proven to be important foci of gold mineralization: -

 

·Structural lineaments trending at 120º;
·Flexures and splays to the 120º trend (such as at Golden Pride);
·Structural lineaments at 70º (such as at Golden Ridge); and
·Granite-greenstone contacts (such as at the Ushirombo and Rwamagaza Greenstone belts).

 

7.2Property Geology

 

Buckreef Gold Company Limited’s Buckreef Project is in the regionally east-west trending Rwamagaza greenstone belt. This belt is considered a segment of the larger Sukumaland greenstone belt and is one of the larger greenstone belts in northern Tanzania.

 

Substantial areas of the Buckreef Project are covered by lateritic units, dominantly gravels, mbuga soil and cuirasse. Cuirasse forms some highly indurated upper facies of the lateritic regolith. Several lateritization events have resulted in weathering to depths of up to 40m. The limited bedrock exposure has hampered the development of detailed geologic models for the region.

 

Hill (2006) reported on a geological investigation of the Buckreef Project area for IamGold Ltd. In this PowerPoint presentation, Hill (2006) described the geology of the Buckreef Project as consisting of a tightly folded sequence of lower mafic, upper mafic-ultramafic sequence. The Lower mafic unit appears to be more deformed than upper mafic unit. The two units are separated by magnetic ultramafic flow at unconformity boundary. The mafic –ultramafic units are sandwiched between older granite to the south and young late granite to the north. The margins of granite intrusions have higher magnetic signature suggesting contact metamorphisms (Figure 7.3).

 

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Figure 7.3 Local Geological Setting, Buckreef Project, Rwamgasa Greenstone Belt, Geita District, Tanzania

 

The belt is bisected by an East – West trending lineament, that is interpreted as a first-order, crustal scale, sinistral shear zone namely as the Rwamagaza Shear Zone (RSZ). The Rwamagaza greenstone sequences have been affected by at least two deformation events. The deformation D1 forms a weak E - W trending foliation and massive “buck” quartz veins that are weakly prospective for gold mineralization. D2 corresponds to the main phase of deformation and resulted in the progressive development of NE trending shear zones, and a pervasive NE foliation. N to NNE trending dextral shear faults formed during D2 and are associated with stock-work quartz veins and significant gold mineralization.

 

Several published data considered that regional gold deposition is tightly constrained to the pre- Lamprophyre intrusion (2697 ±10 Ma) and pre-Kuria volcanic rocks (approx. 2660Ma).

 

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7.3Deposit Geology

 

Buckreef Gold Company Limited has defined four mineral deposits on the Buckreef Property. As estimated in this technical report, from largest to smallest based on ounces of gold, these include the Buckreef mineralized corridor, Bingwa, Eastern Porphyry and Tembo Deposits. The following descriptions are summarized from Venmyn 2012.

 

7.3.1Buckreef Deposit

 

The Buckreef Prospect is a shear zone hosted gold deposit within a sequence of mafic basalts and dolerites, near basement granite. The defunct Buckreef Mine is located on a clearly defined, east- northeast/west-southwest trending, 5m-30m wide and 8km long, brittle-ductile shear zone within relatively un-deformed mafic volcanics. Based on preserved slickensides, the dominant displacement vector across the shear zone was sinistral, however the bulk of the ductile fabric is post mineralization. Gold mineralization is associated with intense brecciation and quartz, carbonate, sericite pyrite alteration in at least two phases and is controlled within the regional shear by a fault zone with a 10m true width, drilled continuously for over 1.5km strike length (Figure 7.3).

 

A late stage veining event characterized by white, buck quartz veins, is evident in the main zone and is barren of gold mineralization, but is the only visible sign of the structure in outcrop.

 

The gold mineralization at Buckreef Prospect is non-refractory in both fresh and oxide material. Deep drill-holes indicate that high grade mineralized zones plunge steeply to the north. Several narrow, more discontinuous sub-parallel zones of similar alteration and mineralization have been defined both to the west and to the east of the main fault zone.

 

Detailed logging of drill-hole core reveals a prominent deepening of the oxidation profile above portions of both the Main and North Zones. The base of the oxidation zone occurs between 15m and 40m, with an average depth of 30m, and the overburden consists of both black cotton soils and lateritised duricrusts with an average depth of ±3m-4m, to a maximum of 20m.

 

7.3.2Bingwa Deposit

 

The Bingwa Prospect is located at the northern margin of the RGB, adjacent to a sheared contact with a granitic intrusive and is approximately 4km east of the Buckreef deposit (Figure 7.4) Gold mineralization has been identified in a drilling program over a strike length of 350m and up to 100m below surface, with the main zone of mineralization occurring over a strike length of 150m. Gold mineralization at Bingwa is associated with quartz veining in strongly foliated and altered greenstone in a shear zone adjacent to the granitoid contact. The shear zone strikes northeast and dips steeply to the northwest. The main zone of mineralization is associated with the junction of a northwest striking, shallowly north dipping fault and the northeast striking shear zone.

 

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Figure 7.4 Local Geological Setting, Bingwa Deposit, Geita District, Tanzania

 

Source: TRX 2013

 

Deformation, alteration and gold mineralization appear to be limited to rheological contacts, between basalt and the early quartz veins and along the margin of the granite. The difficulty in constructing continuous grade envelopes may be due to limited continuity of the early quartz vein array, and/or the possibility that the veins are folded, transposed and boudinaged within shear zones.

 

Most the mineralization defined to date occurs within the oxide zone, which extends to 40m-60m below surface. The entire deposit is overlain by 5m to 8m of overburden and transported alluvial. Much of the Bingwa Prospect gold mineralization in the weathered profile occurs in lower saprolite, below the redox boundary.

 

There is negligible upper saprolite below the overburden cover. Given that there is typically limited chemical dispersion of gold in lower mafic saprolite, this may be one of the reasons for poor lateral grade continuity at the Bingwa Prospect. However, recent work at the Bingwa Prospect indicates that mineralization is hosted within the north-northwest to south-southeast trending structures at the intersection with the major northeast-southwest shear zone. The intersection between these structures is considered to play an important role in controlling high grade zones

 

7.3.3Eastern Porphyry Deposit

 

The Eastern Porphyry deposit is located 0.8km east of the Buckreef main deposit and consists of weakly to moderately sheared felsic porphyry and younger fresh feldspar quartz porphyry dykes up to 30m wide within a mafic sequence dominated by medium grained dolerite.

 

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The Eastern Porphyry structures occur within sheared basaltic lavas and medium grained dolerite intrusive of the northeast-southwest trending Nyamazama River lineament. The elongated intrusion attains a maximum thickness of 280m, but thins and disperses to the northeast and southwest into a series of relatively narrow quartz-feldspar-porphyry dykes (Figure 7.5).

 

 

 

Figure 7.5 Local Geological Setting, Eastern Porpyhry Deposit, Geita District, Tanzania

 

Source: TRX 2013

 

The Eastern Porphyry mineralization is associated with silicified and weakly pyritised shears, quartz veins and veinlets, and within quartz-feldspar porphyry. Quartz veining within the felsic unit may contain pyrite with or without low grade mineralization. However, zones of shearing within the dolerite up to 7m in width are associated with silica-carbonate-pyrite alteration. The mineralization has a total strike length of approximately 1,500m. The main intrusion is coincident with a circular magnetic anomaly in the area with a diameter of 350m (Barrett, 2000). In places the quartz-feldspar-porphyry is magnetite bearing, readily deflecting a hand magnet.

 

The gold mineralization occurs in a similar lithological and structural setting as at Buckreef Prospect, but the intensive carbonate-silica-pyrite alteration typical of the Buckreef deposit is lacking or poorly developed. The fact that mineralization on the Nyamazama River lineament is less well developed than at Buckreef may be due to less dilation of the northeast-southwest shear compared to that of Buckreef Prospect or the presence of the porphyry intrusion which inhibited fluid flow and was less chemically reactive than the basalt.

 

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7.3.4Tembo Deposit

 

The Tembo deposit locates approximately 3km southwest of Buckreef Mine, adjacent to the main Rwamagaza Shear Zone. The mineralized zones at Tembo are confined to the east – west trending shears within met-basaltic volcanic package. Alteration in the mineralized zones consists of silica- carbonate-pyrite with well-preserved shear fabric (Figure 7.6).

 

 

 

 

Figure 7.6 Local Geological Setting, Tembo Deposit, Geita District, Tanzania

 

Source: TRX 2013

 

Gold mineralization is associated with grey quartz thin veins, stringers and boudins parallel to the shear fabric. At Tembo deposit, the transported and residual soil cover is 7m to 9m deep, below which, completely altered and sheared mafic material occurs to a depth of 50m. Most of the oxidised zone has been exploited by artisanal mining.

 

7.3.5Mineralization

 

Gold mineralization on the Buckreef property is universally controlled by shear-related veining and alteration, developed in three dominant geological environments: meta-basaltic volcanic-hosted, intrusive-hosted and contacts. The meta-basaltic volcanic-hosted deposits Buckreef and Tembo, tend to consist of networks of anastomosing and steeply-dipping shear zones, exhibiting multiple, superimposed, phases of veining, alteration and deformation. The intrusive-hosted deposit, Eastern Porphyry, also exhibits multiple phases of veining, alteration and deformation, but tend to develop weak alteration and broader shear zones.

 

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Bingwa and Eastern Porphyry are associated with intrusive contacts. This could be attributed to thermal aureole effect; however, it may also be controlled by competence contrasts and its effect on structural dilation during deformation and the consequent enhancement of permeability at these sites.

 

Gold is strongly associated with silica-carbonate alteration and veining. Sulphide minerals associated with mineralization consist predominantly of pyrite and minor chalcopyrite. Gold grains up to 60 microns in size have been reported in both low and high grade zones. Visible gold is known from all deposits but is not common. High amount of gold is found as inclusion in pyrite as well as fracture- filling in pyrite and chalcopyrite. Gangue minerals of interest include clay, feldspar, quartz, dolomite, and hematite and goethite in the oxide and transition material.

 

 

 

 

 

 

 

 

 

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8.DEPOSIT TYPES

 

The Lake Victoria Goldfield hosts numerous small-scale and five large-scale orogenic gold deposits. Term ‘orogenic gold deposit’ is broad in scope and encompasses meso-thermal gold deposits, shear- hosted, lode-gold and metamorphic gold deposits. Orogenic gold is a distinctive class of mineral deposit that has been the source for much of world Au production.

 

The ores are widely recognized in both Phanerozoic mobile belts and older cratonic blocks. Orogenic gold deposits have formed over more than 3 billion years of Earth’s history, episodically during the Middle Archaean to younger Precambrian, and continuously throughout the Phanerozoic.

 

Typically, orogenic gold deposits are formed in regionally metamorphosed terranes, during compressional or transpressional tectonic processes at continental plates margins, in accretionary or collisional orogenic events. In both tectonic regimes, hydrated marine sedimentary sequences are added to continental margins. Subduction related thermal events then drive extensive hydrothermal fluid systems through the hydrated accretionary sequences, which results in the emplacement of gold bearing quartz veins from depths of 15km to 20km to surface (Groves 1997).

 

The mineralization is commonly post the deformation of the host rock but is syn-orogenic with respect to the on-going deep crustal, subduction related thermal processes (Groves 1997). In addition, mineralization has been theorized to be associated with short-lived pulses of metamorphic fluids that are released by the rapid devolatilisation of a rock column undergoing burial in a convergent orogen. The goldfield deposits are hosted by sedimentary units intercalated with volcanics and all are associated with quartz veining. The largest deposit at Geita is hosted by ferruginous chert-pelite units. The Rwamagaza Greenstone Belt hosts numerous small-scale gold deposits exploited by small-scale miners, as well as the Tulawaka Mine that has produced more than 1 Moz at the western limit of the RGB, 56km to the west of the Buckreef Mine.

 

All the deposits currently being exploited by artisanal miners in the Buckreef Project area consist of narrow discontinuous quartz veins within meta-basalts, shear zones, contact zones with felsic intrusives and metamorphic foliation.

 

Each of the four prospects, whilst generally formed under conditions described above, are unique in the mechanisms which concentrated the mineralization. The exploration programs undertaken have been specifically designed considering the unique set of local structural, lithologic and regional tectonic conditions which created potentially favorable sites for mineralization concentration.

 

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9.EXPLORATION

 

The Buckreef project has been the subject of numerous exploration programmes carried out by several companies over more fifty years. As summarized in section 6 of this report the project was originally defined by a 1966 United Nations exploration programme following up artisanal workings. The deposit was subsequently explored by the Tanzanian Mineral Resources Division and developed into a small underground mine by Buckreef Gold Mining Company a wholly owned subsidiary of the State Mining Corporation (Stamico). The mine closed down in 1990 due to low gold prices and lack of working capital resulting in inability to purchase fuel and maintain plant ending in the flooding of the mine.

 

 

Table 9.1 Summary of Buckreef Project, Historical Exploration Work, Geita District, Tanzania

 

DATE EXPLORATION UNDERTAKEN
1999-2000

EAGM signed an earn-in agreement with Ashanti AngloGold to explore

Buckreef Project which was terminated late 2000. 16,324m of drilling in 67 drill holes, 18 of which were RC and 49 drill holes diamond (15,363m)

2001 -2003

Spinifex Gold, operating for EAM, ran the project with very limited exploration work based on the follow up recommendations from the final exploration report by Ashanti AngloGold. 610 RC drill holes (49,000m) with 6 diamond drill holes.

IP geophysical survey over Buckreef

2004 -2005

Following the merger between Spinifex Gold and Gallery Gold in 2003 significant exploration work was concluded on the project and new resources established on the Buckreef Mining licence. Resources were improved at Tembo and Bingwa prospects. Geophysics and geochemical soil surveys completed with

additional RAB, RC and diamond drilling.

2006 - 2009

Following the merger between Gallery Gold and IAMGOLD Corporation of Canada in March 2006 EAM changed names to IAMGOLD Tanzania Ltd. Under IAMGOLDT, Buckreef Project was completed up to commencement of pre- feasibility studies before the company decided to close all its exploration activities in Tanzania in 2009 and in so doing decided to surrender back to the government all its exploration portfolio under the Buckreef Re development Agreement. 2,949 drill holes were drilled for 142,302m including 2,160 aircore, 745 RC and 44diamond drill holes. Regional soil and termite mound

reconnaissance sampling programme. Regional mapping

2010 - 2012

In March 2010 the government of Tanzania granted afresh all the surrendered

licences to Stamico, including the existed applications under IAMGOLDT.

 

Source: Venmyn Deloitte 2012

 

 

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9.1Buckreef Gold Project

 

A Section in Chapter 6 briefly summarized the exploration history on the Buckreef Project starting from 1960 soon after the area was designated as a potential strategic deposit by the Tanzanian government following an incursion by local artisanal gold miners. Table 9.1 below summarizes the major exploration work conducted over the decades by the various companies that have been involved with the Buckreef project over the last 50+ years.

 

As reported in the published NI43-101 reported mention in Chapter 6 above, Tanzanian Royalty Exploration Corporation, through its 100% owned subsidiary, Tanzam200 commenced mainly further resource drilling and exploration work covering the five main prospects that make up the Buckreef project in 2012. Most of the exploration work at the Project was completed previously during the IAMGOLD ownership as reported in the SEDAR posted reports.

 

As cited in the published Venymn Independent Technical Reports, regional and detailed exploration by IAMGOLD identified the four major gold prospects as Buckreef (Main, North & South), Bingwa, Tembo and Eastern Porphyry. IAMGOLD then conducted further resource drilling on the Buckreef (Main & North), Bingwa and Tembo prospects. Exploration criteria for the five prospects were essentially based on the normal Archean gold deposit formation criteria listed below:

 

·Presence of gold
·Favourable structure (shear zones and breccia zones)
·Significant quartz vein material
·Hydrothermal alteration minerals and assemblages
·Proximity to unconformities and disconformities; and
·Proximity to oxidation/reduction boundaries of regional scale

 

For detailed descriptions and in-depth discussion of the exploration work, some of whose results are briefly summarized below, the reader is referred to Venymn Independent Projects Preliminary Economic Assessment Technical Report (ITR) completed under NI 43101 standards and amended and filed on the System for Electronic Document Analysis and Retrieval, “SEDAR”, (www.sedar.com), on August 12, 2012.

 

The authors of the Buckreef PEA Independent Technical Report (ITR VIP21), produced for TRX, were Qualified Persons F. Harper (Pri.Sci. Nat.; MGSSA) and A.N. Clay (Pri. Sci. Nat; MSAIMM, FGSSA, FAusIMM). Brief discussions on some of the significant exploration work done are summarized below.

 

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9.1Geophysical Survey

 

Because of the limited bedrock exposure in the Buckreef Project area, numerous geophysical surveys have been conducted at the site in the quest for additional ore. These efforts are summarized in report by Venmyn Deloitte 2014. Geophysical surveys conducted include ground gravity and dipole-dipole IP/resistivity.

 

9.1.1Surveys

 

Spectral Geophysics (Botswana) was contracted during April 2008 to complete ground gravity surveys over 5km2 and the data was interpreted by Southern Geoscience Consultants (SGC) in Australia. The final results were compiled into a 1:20,000 scale geological interpretation delineating twenty-one targets and the Rwamagaza Shear Zone. Gravity surveys proved effective for the location of large first order structures and in 2008 the airborne magnetic data was interpreted into an image atlas for future target definition.

 

9.1.2Induced Polarisation Surveys

 

During 2007, 14 IP survey blocks were completed over the project area by Spectral Geophysics and processed by SGC Australia. The results of these surveys highlighted altered fault/shears zone structures and in conjunction with magnetics can be used for targeting prospective strike extensions of existing ore bodies.

 

9.1.3Geochemistry Surveys

 

Several historical soil and rock chip sampling programs were completed over the Buckreef Project area on a grid of 100m x 100m, with closer spaced grids (80m x 40m) over historical target areas and targets with a high density of lineaments and interpreted mineralized structures. A total of 2,028 rock chip samples, 29,546 soil samples and 481 termite mound samples were taken during the period 1992-2009.

 

Transported laterite, combined with Mbuga soils which cover 60% of the area, hamper geochemical sampling and interpretation and IAMGOLD completed termite mound sampling over the problematic areas. To date the termite sample density is too low for identification of meaningful anomalies. The results of the soil geochemistry results are consistent with the known structures in the area. The largest soils anomalies occur are over the main deposits at Buckreef Prospect.

 

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On surface, favourable structures are identified utilizing the 2006 airborne magnetometer survey covering the Rwamagaza greenstone belt. Due to lack of outcrop exposure, very limited ground geological mapping was employed to identify fabrics, offsets and abrupt changes in rock types that indicate structure. Rather detailed geological core logging was used to extrapolate the structural fabrics and hydrothermal assemblages typical for each prospect.

 

 

 

 

 

 

 

 

 

 

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10.DRILLING

 

As summarized in the various SEDAR posted Technical Reports by Venymn, the majority of the exploration and resource drilling at Buckreef’s four major prospects namely Buckreef, Bingwa, Tembo and Eastern Porphyry was done previously by IAMGOLD.

 

TANZAM2000 then conducted further resource drilling on the Buckreef (Main, South & North), Bingwa, Tembo and Eastern Porphyry prospects based on recommendations from the 2012 Preliminary Economic Assessment report by Venymn. Many surface targets meeting some or all of the relevant criteria remain to be tested by drilling.

 

10.1Buckreef Prospect

 

Surface exploration and resource definition drilling completed, by previous owners, along the NW-SE control lines are shown in Figure 10.1. The Buckreef resource has been drilled on local grid east-west oriented drill traverses at mostly 20meter intervals along the strike of the gold mineralization above 1100mRL (surface approximately 1225mRL). Below 1000mRL to the base of drill coverage (approximately 700mRL) the deposit has been variably intersected on 100m intervals south of 2600mN and 40-50m intervals north of 2600mN.

 

Many drill holes are angled steep (~60o) towards grid east or west normal to the strike of the gold mineralization. On many sections the drill holes targeting the near surface gold mineralization are spaced at 10mcentres providing approximate 20m spaced vertical intercept on the gold mineralization.

 

The RC resource delineation drill spacing was completed on a 40m to 20m x 20m spacing at Buckreef. On sections targeting the near surface gold mineralization, the drill-holes were spaced at 10m centres providing approximate 20m spaced vertical intercepts on the gold mineralization.

 

 

 

 

Figure 10.1 Location of Historical RC/DD exploration and Resource drill-holes, Buckreef Deposit, Geita District, Tanzania

 

Source: Venmyn Deloitte 2012;

 

 

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Between 2013 and 2014, the TANZAM2000 completed additional resource definition drilling mainly targeting the Buckreef South and North deposits in addition to the mandatory twinning preliminary due- diligence diamond core holes on selected portions of the Buckreef main deposit as part of recommendations from Venymn reports.

 

At Buckreef Prospect, the North and Main Zone mineralization occurs in a shear zone with a true width of 10m, dipping steeply to the west. As a precaution to minimize interference and sampling by artisanal miners, the RC 1m samples were collected daily and transported to a central sample store where they were sampled and bagged.

 

The 2012 core drilling program was aimed at defining mineralization between 150m and 250m depths at the Buckreef Main deposit. The results identified a wide zone of mineralization, as exemplified by two drill-holes which intersected a mineralized zone 26m wide with a grade of 4.5g/t Au at 215m depth and a zone, 19m wide with a grade of 10.58g/t Au at 155m depth.

 

The same 2012 drilling program also confirmed that the high-grade mineralization extends northwards beyond the previous identified Buckreef North Zone mineralized zone and two significant drill-hole intercepts included a 46m wide mineralized zone with a grade of 2.31g/t Au at a depth of 28m and a 14m wide zone with a grade of 1.75g/t Au at a depth 206m.

 

The diamond drilling core recovery was an average of 93% (Venmyn Deloitte, 2014). Most of the diamond drill-holes commenced with a tricone roller bit where near surface sampling was not required, followed by HQ diameter, which was reduced to NQ/NQ2 when fresh rock was encountered. Ten HQ core holes were drilled at Buckreef to twin anomalous RC and diamond drill-holes as part of a QA/QC program on historical assay practice and grade continuity. PQ metallurgical samples were collected at Buckreef Prospect.

 

The main objective for this work was to advance Mineral Resources from Inferred to Measured and Indicated categories and to increase the Mineral Reserve.

 

10.2Bingwa Prospect

 

Bingwa lies at the northern margin of the RGB adjacent to a sheared contact with a granitic intrusive and approximately 4km east of Buckreef. Surface exploration and resource definition drilling completed, by previous owners, along the NW-SE control lines are shown in Figure 10.2. An additional 1,500m of RC and 180m of diamond core drilling was completed on the prospect in the period 2012 to 2013 by the company.

 

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Figure 10.2 Location of Historical RC/DD exploration and Resource drill-holes, Bingwa Deposit, Geita District, Tanzania

 

Source: TRX 2013

 

The RC drilling tested the southwest strike and potential down-dip extension of the main Bingwa deposit while the core drilling is to accommodate additional metallurgical and specific gravity analytical test-work. The drilling confirmed gold mineralization over a strike length of 350m and up to 100m below surface with the main zone of mineralisation occurring over a strike length of 150m. The majority of the mineralization defined to date lies in the oxide zone, which extends to 40 to 60m below surface.

 

The results of this drilling program were used to advance Mineral Resources from Inferred to Measured and Indicated categories and to increase the Mineral Reserve.

 

10.3Eastern Porphyry Prospect

 

Historical exploration work by IAMGOLD identified the Eastern Porphyry as target with potential to host a significant resource that could be added into the Buckreef Project Resource inventory.

 

Venymn (2012) noted that the historical wide-spaced RC drilling conducted on the Eastern Porphyry Prospect, located on the strike extension of an ENE-WSW trending, 5-30m wide, brittle-ductile fault zone, defined the presence of finely disseminated pyrite and quartz veining slivers of persistent but discontinuous sub parallel zones of quartz porphyry units hosted in the main fault zone over a 300m strike length of continuous gold mineralization associated with quartz veins emplaced in sheared felsic porphyry and dolerite.

 

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An additional 10,814m of RC and diamond core drilling was completed on the prospect in the period 2012 to 2013 by the company. The combined historical and additional surface exploration and resource definition drilling along the NW-SE control lines are shown in Figure 10.3.

 

 

 

 

Figure 10.3 Location of Historical RC/DD exploration and Resource drill-holes, Eastern Porphyry Deposit, Geita District, Tanzania

 

Source: TRX 2012;

 

10.4Tembo Prospect

 

Venymn (2012) noted that the historical RC drilling conducted on the Tembo Prospect, defined gold mineralization within grey quartz stringers, veinlets and boudins (tension zones) all tightly constrained by a 3-5m wide ENE-WSW trending brittle-ductile shear zone hosted in basaltic volcanic units. Historical drilling by IAMGOLD covered a 200m strike length.

 

Tanzam2000 conducted additional RC and diamond core drilling for metallurgical and specific gravity tests to upgrade the deposit resource from inferred to measured + indicated category. The drilling will also test strike continuity of mineralization to the east (Figure 10.4).

 

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Figure 10.4 Location of Historical RC/DD exploration and Resource drill-holes, Tembo Deposit, Geita District, Tanzania

 

Source: TRX 2013

 

The results of this drilling program were used to advance Mineral Resources from Inferred to Measured and Indicated categories and to increase the Mineral Reserve.

 

 

 

 

 

 

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11.SAMPLE PREPARATION, ANALYSES AND SECURITY

 

This section of the report briefly summarizes the sampling methods, sample preparation, assay analysis, and security procedures for surface reverse circulation and diamond drill core sampling as reported and published by Venymn. For detailed descriptions and in-depth discussion of this topic, again the reader is referred to Venymn Independent Projects Technical Reports ITR-VIP21, ITR-VI199R and ITR- VMD1598 completed under NI 43101 standards and amended and filed on the System for Electronic Document Analysis and Retrieval, “SEDAR”, (www.sedar.com).

 

In brief, the procedures for both RC chips and core samples were developed and documented by the previous operator IAMGOLD and were largely adopted by TANZAM2000 to maintain continuity and congruity. Any changes made by TANZAM2000 were duly noted within the Independent Technical reports mentioned above.

 

11.1Core Sampling Methods

 

Diamond core drilling at the Project was conducted by contractors under the supervision of a qualified geologist. The drill core was then placed in labelled metal trays and depth marker blocks inserted by drilling contractor personnel prior to the removal of the core from the drill site by the project geologist. Upon arrival at the secure core logging facility, the core boxes were sequentially placed in a core rack and the spatial information on each box of core is checked for accuracy and consistency. Prior to any sampling, the drill core was digitally photographed by a geological technician under the supervision of a geologist.

 

Exploration geologists then logged the core and recorded observations first in a manual log sheet and then subsequently uploaded into a master drill log database. Sample selection were then based such geological considerations as presence of mineralization, favourable structure, presence of alteration halos and quartz veining. The samples were then marked and measured for sampling and identified with one part of a three-part assay tag placed at the end of the sample interval. 

 

Venymn Deloitte noted that the potentially mineralized portion of the drill-core was split in half using a core splitter. One half of the split core was then taken as a sample that was immediately placed in a sample bag by the geologist and identified with an assay tag, whose duplicate copy was kept in the sample book, and the sample number is recorded on the log-sheet prior to entry into the master database. Additional samples on either side of the presumed mineralized section were also collected to close off mineralization as is standard practice.

 

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The split core was then returned to the relevant core-tray and subsequently stored at the Project core- shed where these authors took the opportunity to re-look at some of the logging and sampling as part of Virimai Projects’ due diligence prior to compilation of this report.

 

Blind standards were routinely inserted into the sample sequence prior to delivery to the assay laboratory. Blanks (also routinely inserted every 50 samples and after all noted visible gold) consist of either intervals of un-mineralized core which are identified and flagged prior to shipment to the assay lab or were sourced from a commercial laboratory and inserted into the sample stream prior to shipment.

 

Sealed sample bags were then transported to the assay laboratory in a timely manner. Upon arrival at the assay lab, samples are received by laboratory personnel and transferred to the laboratory’s chain of custody procedures and protocols. Historical exploration companies including IAMGOLD and TANZAM2000 kept a chain of custody as well which was updated throughout the process.

 

11.2RC/RAB Sampling Methods

 

The RC/RAB drilling sampling methodology comprised collection through a cyclone at 1m intervals into large plastic bags. An exploration geologist logged the drill-chips on site as each meter sample was riffle split on site, weighed and moisture content recorded for every meter drilled.

 

RC holes were stopped if persistent wet samples were encountered. Most RC samples collected since 1992 were homogenized and reduced to 2kg to 3kg on site by passing reduced samples at least 4 times through a single tier Jones riffler, which is demonstrated to be a more representative sample than that produced by stacked three tier splitters. In later years, the entire length of RC and RAB drill-holes was collected as 1m samples with individual RC samples for assaying taken as 3m composites. During composite sampling, the individual 1m riffle split reduced samples were collected in the field and retained for future analysis if warranted.

 

As with the core samples, unique Sample ID ticket books with corresponding tear off sample tickets were printed and used to record sample details and assay samples.

Both drill core and RC pulp samples were submitted to various ISO accredited laboratories who in turn utilized comprehensive in-house QA/QC measures from sample preparation to instrumental finish and reporting of the results. Equipment was cleaned between batches and crushing and pulverizing was monitored by sieve testing. Routine laboratory Quality Control sampling (pulp duplicates and pulp repeats) was also completed on pulps retained at the laboratory. This provided an indication of any sample preparation/sub-sampling/sample digest and assay error at the primary laboratory.

 

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Both Hellman & Schofield and Venymn Independent Projects subsequently conducted a very intensive and detailed statistical assessment of the QA/QC Data for project area. They both concluded that the historic and recent QA/QC data available provided assurance that the data is not flawed by sampling or assaying bias. Further to that, they also considered the QA/QC performance to be good and the data suitable for incorporation in the published Mineral Resource estimates done in 2007, 2012 and 2014.

 

 

 

 

 

 

 

 

 

 

 

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12.DATA VERIFICATION

 

This section of the report summarizes the results of Virimai Projects’ due diligence for the data verification for the Buckreef Gold Project.

 

12.1Drill Data Review

 

Mr. Peter T. Zizhou, the General Manager for the Buckreef gold project provided Virimai Projects with the complete drill-hole database used by and geological resource models generated there from by Venymn Deloitte in the compilation of Independent Projects Technical Reports ITR-VIP21, ITR- VI199R and ITR-VMD1598 completed under NI 43-101 standards and amended and filed on the System for Electronic Document Analysis and Retrieval, “SEDAR”, (www.sedar.com).

 

The drill hole database and resource models were supplied as Datamine Studio 3 files with the drill hole files consisting of collar, down-hole survey and interval tables. The resource models were as 3D Datamine Studio 3 wireframe files encompassing discrete mineral zones identified by a zone number in the file name. Block models of the grade estimates were also supplied for these zones.

 

Surface Digital Terrain Models (DTMs) were supplied for each area and this also included the DTMs at (1) the interface of the oxide and intermediate material and (2) the interface of the intermediate and fresh material.

 

Virimai Projects then reviewed the data and models to verify the findings as previously reported and published by Venymn Independent Projects. Messrs Wenceslaus Kutekwatekwa, Wonder Mutematsaka and Arimon Ngilazi then visited the site from the 17th to the 19th April 2018 in the company of Mr. Peter T. Zizhou. A further two days, 21st and 22nd April 2018 were spent reviewing the data with MaSS Resources, as the immediate past consultants on the Buckreef project.

 

12.2Collar Location Checks

 

Virimai Projects’ team carried out field checks of pre-selected borehole collars on the Buckreef, Eastern Porphyry and Tembo anomalies from the 18th to the 19th of April 2018. The recorded co-ordinates of 20 collars were entered into a hand-held GPS and used to track to the positions in the field. Some of the collars at Buckreef anomaly have since been destroyed during pre-stripping but even so, some evidence was available through residual cement works. Using this method collar location for the surface diamond drill holes are considered to be reliable.

 

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12.3Drill hole and Assays Checks

 

Virimai Projects randomly selected several diamond and RC drill holes, and deliberately selected portions of holes with intersections of mineralization were selected by the Virimai Project team and the Buckreef project personnel and availed the core trays and pulp for inspection and verification logging in the core-shed.

 

12.4Geology Checks

 

Several randomly chosen manual log-sheets for drill-core availed at site were first manually logged to acquaint the Virimai Projects team with the geological units as described in the log-sheets. A comparison with the lithology database then revealed congruency as previously established by Venymn Deloitte. The diamond core drill-hole lengths and lithologic coding for the core drill-holes is thus considered to be reliable.

 

12.5Core Assay Checks

 

During the 18th to May 19th 2018 site visit, Virimai Projects carried out geology and assay checks as a single exercise. Pre-selected holes were laid out by Buckreef staff for verification logging to validate geology, depth of intersections and mineralisation. Comparison was made with the database entries and Virimai Projects found the geological and assay data to be representative of the observed geology and mineralisation.

 

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No assay check samples were collected for this report. Virimai Projects conducted verification of the randomly chosen drill holes to check assay entries against the assay certificates. The assay certificates were obtained in both digital and manual formats directly from the assay laboratories. Virimai Projects’ finding was that the assay database was considered to be reliable.

 

On the basis of the verified collar, geology and assay data, Virimai Projects deems the data fit for use in resource modelling, grade estimation and subsequent business use.

 

 

 

Figure 12.2: Core and RC pulp logging verification

 

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13.MINERAL PROCESSING AND METALLURGICAL TESTING

 

13.1Introduction

 

Chemical analysis, mineralogy, comminution, gravity separation and cyanidation tests have been completed that support the process design criteria for the proposed metallurgical operations. The results of these tests are summarised in this section.

 

13.2Previous test work

 

The following reports of work on the Buckreef deposits have been issued and reviewed:

 

·Metallurgical Testwork on Buckreef Samples – Geita Gold Mining Ltd, 15th September 2001;
 ·Scoping and Diagnostic Testwork on Tanzania Samples for Gallery Gold Ltd – IML (Pty) Ltd, September 2003;

·Phase 2 Metallurgical Testwork Summary – IAMGOLD, MPC Project 6011, February 2007
·Metallurgical Test Programme: IAMGOLD, SGS Southdale, 9 March 2009
 ·Heap leach Amenability Test work - SGS Southdale Metmin Report No 13/527, 16 April 2014

 

The relevant sections of each of these reports is summarised in order in the sections that follow.

 

13.3Metallurgical Testwork on Buckreef Samples – Geita Gold Mining Ltd

 

Three samples from three drill holes were prepared. For each drill, a composite sample was prepared from 53 sub-samples taken at one-metre intervals along the drill core. The results for these three holes is summarised in Table 13.1.

 

Table 13.1. Key results from Gieta Gold test work.

 

Sample
  Units BMRCD 185 BMRCD 191 BMRCD 204
Head grade g/t 11.7 4.9 2.7
Recovery (direct cyanidation) % 84 86 77
Recovery (CIL) % 91 91 77
Cyanide consumption kg/t 1.0 0.72 1.09
Lime consumption kg/t 1.17 0.50 0.87

 

Key observations from this work were the following:

 

·the gold is leached rapidly, with 80% dissolved within the first two hours;
·the gold is liberated with grinding,
 · diagnostic leaching and analysis indicated that the residual gold is refractory, associated with pyrite.

·Arsenic is present at about 22 g/t.

 

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13.4Scoping and diagnostic test work – Gallery Gold

 

Leaching tests, diagnostic leaching tests, and mineralogy were conducted by Independent Metallurgical Laboratory (IML), based in Perth, Australia. The leaching results are summarised in the Table 13.2.

 

Table 13.2. Key results from Gallery Gold test work.

 

Sample
  Units BMDD023 BMDD222
Head grade g/t 3.16 6.05
Recovery (direct cyanidation) % 71.6 87.0
Cyanide consumption kg/t 0.83 0.58
Lime consumption kg/t 1.31 1.47

 

13.5Phase 2 Metallurgical test work – IAMGOLD

 

IML performed further test work for IAMGOLD, with MPC acting as consultants. The results of this test work that are relevant to the current project plan are discussed in the sections that follow.

 

13.5.1Grinding test work

 

The bond rod mill and ball mill work indices (BRWI and BBWI, respectively) are given in Table 13.3.

 

Table 13.3. Milling characteristics.

 

Item Unit Oxide     Primary
  Buckreef Main Clay

Buckreef Main

Rock

Buckreef Main 92 Buckreef Main Buckreef North
BRWI kWh/t 10.6 11.4 19.5 21.2 24.3
BBWI kWh/t 9.9 12.9 22.3 17.5 17.2
Ai   0.014 0.154 0.586 0.424 0.042
Classification   Soft Soft to moderate Hard Moderately hard Moderately hard

 

  

13.5.2Process selection test work

 

Process selection test work was undertaken to determine the relative advantages of whole ore leaching, gravity/leaching or gravity/flotation/fine grinding/leaching.

 

The results of this test work suggested that a gravity/leaching circuit was best suited to this orebody. The comparison of the different options is shown in Table 13.4. The test work indicated that in order to get high recoveries of gold, the flotation tailings must be leached. The consumptions of cyanide and lime were significantly higher in the flotation/fine grinding option.

 

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Table 13.4. Recoveries for different processing options.

 

Recovery from Process Unit Buckreef Main Oxide

Buckreef North

Primary

Buckreef Main

Primary

Whole Ore Leaching % 92.7 88.6 85.3
Gravity/Leaching % 95.5 92.9 92.4
Gravity/Flotation/Leaching %   81.3 80.2
Gravity/Flotation/Tailings leaching %   92.1 94.5

 

The report recommended that the recoveries for the gravity and leaching sections that should be used in the project evaluation are those shown in Table 13.5.

 

Table 13.5. Recommended recovery assumptions for project evaluation.

 

Item Unit Buckreef Main Oxide Buckreef North Primary Buckreef Main Primary
Gravity recovery % 30 37 41
Leaching recovery % 65 55 51
Total recovery % 95 92 92

 

 

13.6Heap leaching test work

 

The process selection test work conducted summarised in Table 13.4 did not consider heap leaching as a possible option. Consequently, SGS was contracted to performed these tests. The first set of tests were “simulated heap tests’ using a bottle roll technique, and the second set were column tests at various column heights. These tests are discussed in the following sections.

 

13.6.1Simulated heap tests – SGS 2009

 

Simulated heap leaching tests were conducted using a bottle roll technique. The 7-day simulated heap leaching tests indicated that the extractions varied between 50.2% and 88.9%. The cyanide consumptions varied between 1.08 kg/t and 3.11 kg/t.

 

13.6.2Heap leaching amenability test work – SGS 2016

 

The recommended height of the heap was determined by pressure percolation tests. The results indicated that the heights are 4.0, 8.2 and 16.5 m for the oxide, transition and primary orebodies, respectively.

 

Column tests conducted using 4.0 m columns yields leaching extractions of 67.7%, 51.0% and 52.4% for the oxide, transition and primary orebodies, respectively.

 

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13.6.3Conclusions concerning heap leaching

 

The heap leaching results were not sufficiently promising compared with those achieved using a gravity recovery and leaching process to justify this process option.

 

13.7Conclusions from the test work initiated prior to this study

 

The process selection test work indicated that the optimal process is a combination of gravity concentration with leaching of the gravity tails. This is the process route that has been proposed in the current study.

 

13.8Documentation

 

Apart from the historical test work that has been summarized in the previous section, test work has been undertaken to specifically support the metallurgical design of the plant for the project. This section is a summary of that supporting documentation. The relevant documents are the following:

 

(i)                 REPORT NO 15/059 r1, prepared by Juan van der Merwe of MMSA, dated 11 January 2016; and,

 

(ii)               Project 6011, prepared by Peter Banovich of Metallurgical Project Consultants Pty Ltd, dated February 2011.

 

These documents are attached as Appendix 13.1 and 13.2, respectively, to this chapter.

 

13.9Metallurgical test work.

 

13.9.1Purpose of the test work

 

The process selection work conducted by MPC on behalf of IAMGOLD (attached as Appendix 13.2 to this chapter) indicated that the optimal process for this material is a gravity circuit followed by leaching of the gravity tails. The test work conducted in this study is aimed to specifically provided confirmatory information for design purposes. As a result, the test work does not simulate the process, because that was done and reported in Appendix 13.2. Instead, the test work was intended to determine the design parameters, which are discussed in the sections that follow.

 

13.9.2Sample origin

 

A sample of 3.9 t of material was shipped to Emisha Mining Innovations. This sample consisted of the following two bulk samples:

 

(i)                 a composite sample of 2 t of material from Buckreef South and Buckreef Main oxide/transition ore, and

 

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(ii)               a composite sample of 1.9 t of material from Buckreef Main sulphide ore.

 

These samples are referred to here as “oxide” and “sulphide”, respectively. The oxide ore is more weathered, as can be seen in Figure 13.1, while the sulphide ore is more competent, as can be seen in Figure 13.2.

 

 

Figure13.1. Oxide ore before milling and after a single pass of milling in the multi-shaft EDS mill. (Source: Emisha Mining Innovations)

 

 

Figure13.2. Sulphide ore before milling and after a single pass of milling in the multi-shaft EDS mill. (Source: Emisha Mining Innovations)

 

 

13.10Grade and deportment

 

13.10.1 Head grade

 

The head grade of the oxide and sulphide ores is given in Table 13.6. The oxide ore is lower in grade than the sulphide ore, and possibly displays greater variability.

 

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Table 13.6. Head analysis for gold

 

(Source: MMSA Report No 15/059 r1)

 

  Gold analysis, g/t
Sample Replicate 1 Replicate 2 Replicate 3 Average
Oxide ore 1.76 2.12 1.91 1.93
Sulphide ore 4.73 4.51 4.55 4.60

 

 

13.10.2 Gold deportment in the milled material

 

The deportment of gold by size fraction in the milled product was determined. The results of this analysis are shown in Figures 13.3 and 13.4 for the oxide and sulphide ores, respectively.

 

The results for the oxide ore indicate that the grade of gold is slightly lower in the fine fractions. Because of the large mass of fine material in the oxide ore, this fraction accounts for most of the gold. These results indicate that there is no justification for discarding a particular size fraction.

 

The results for the sulphide ore indicate that the grade of gold is relatively evenly distributed with size fraction. A similar conclusion to that reached for the oxide ore is applicable, that is, that these results indicate that there is no justification for discarding a particular size fraction.

 

 

 

Figure 13.3. Gold grade and deportment by size fraction for the oxide ore, indicating that the gold deportment is higher in the fine fraction, bearing in mind that there is a high fines content of this ore. (Source: MMSA Report No 15/059 r1)

 

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Figure 13.4. Gold grade and deportment by size fraction for the sulphide ore, indicating that the gold is not concentrated in any one size fraction. (Source: MMSA Report No 15/059 r1)

 

 

13.11Milling

 

13.11.1Bond milling index

 

The bond mill indices for the different ore type is given in Table 13.7. The oxide ore is soft, while the sulphide ore is moderately hard.

 

Table 13.7 Bond mill indices for oxide and sulphide ore materials.

 

(Source: Phase 2 Metallurgical Test work Summary Project 6011)

 

Domain Description

BRWI

kWh/t

BBWI

kWh/t

AI Classification
Oxide
  Buckreef Main Clay 10.6 9.9 0.014 Soft
  Buckreef Main Rock 11.4 12.9 0.154 Medium
  Buckreef Main 92 19.5 22.3 0.586 Hard
  Busolwa Oxide 9.1 8.9 0.052 Soft
  Busolwa Quartz 12.8 19.0 0.335 Soft
  Buziba Oxide 11.1 9.2 0.103 Soft
Sulphide
  Buckreef Main 21.2 17.5 0.424 Moderately hard
  Buckreef North 24.3 17.2 0.042 Moderately hard
  Busolwa 19.1 15.1 0.131 Moderately hard
  Buziba 23.2 17.6 0.339 Moderately hard

 

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13.11.2Pilot milling

 

Both the oxide and sulphide bulk samples were milled in a demonstration-scale multi-shaft EDS mill. This is a unique mill, which is designed to maximize the number of particle-particle impact events to achieve milling. The mill does not require media (balls, rods or ceramics). As a consequence, the weight of mill and the associated infrastructure requirements are substantially reduced. The principle of the EDS multi-shaft mill is shown in Figure 13.5.

 

 

 

Figure 13.5. Principle of the EDS multi-shaft mill.

 

 

The material before and after the milling is shown in Figures 13.1 and 13.2 for the oxide and sulphide ores, respectively. These photographs indicate the effectiveness of a single pass through the EDS multi- shaft mill.

 

The particle-size distribution for the oxide material after a single milling stage is given in Figure 13.6, and that for the sulphide material is shown in Figure 13.7. These results indicate that the oxide material has a d50 of less than 25 µm, while that of the sulphide ore is about 250 µm. This is a direct consequence of the differences in the intrinsic hardness and the feed distribution of the two materials.

 

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Figure 13.6. Particle-size distribution of the milled (product) oxide ore. (Source: MMSA Report No 15/059 r1)

 

 

 

Figure 13.7. Particle-size distribution of the milled (product) sulphide ore. (Source: MMSA Report No 15/059 r1)

 

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13.12Gravity concentration

 

Gravity concentration test work was undertaken using a laboratory-scale Falcon L40 concentrator. These tests were conducted as sequential separations with inter-stage grinding. The grinding stages were as received, 50% less than 75 µm and 70% less than 75 µm.

 

The results of these tests are shown in Figures 13.8 and 13.9 for the oxide ore and the sulphide ore, respectively.

 

The gravity concentration tests for the oxide ore indicates that more than 50% of the gold can be concentrated in about 4% of the mass with a grade of about 25 g/t.

 

The gravity concentration tests for the sulphide ore indicates that about 20% of the gold can be concentrated in about 4% of the mass with a grade of about 25 g/t.

 

 

 

 

Figure 13.8. Grade and recovery curves against mass pull for the oxide ore using the Falcon L40 concentrator. (Source: MMSA Report No 15/059 r1)

 

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Figure 13.9. Grade and recovery curves against mass pull for the sulphide ore using the Falcon L40 concentrator. (Source: MMSA Report No 15/059 r1)

 

13.13Cyanidation

 

Samples of the as-received ores were ground to a p80 of 75 µm and tested with and without the addition of carbon. The results of these tests for the oxide ore and the sulphide ore are shown in Table 13.8. The other conditions of these cyanidation tests are as follows: pH 10.5; NaCN 5 kg/t; cyanidation time 48h. The cyanide and lime additions are excessive, and the expected cyanide and lime consumptions are closer to those determined in previous test work. See section 2 of this chapter.)

 

These results indicate that a leach efficiency of 93.8% can be achieved with the addition of carbon for the oxide ore, and 85.4% for the sulphide ore. These results suggest that a carbon-in-leach circuit will be beneficial in the processing of these ores.

 

Table 13.8. Cyanidation results for the oxide and sulphide ores.

 

(Source: MMSA Report No 15/059 r1)

 

Domain Carbon addition, g/L

NaCN

addition, kg/t

CaO addition, kg/t

Leach efficiency,

%

Oxide
  0 5 1.3 82.4
  20 5 1.3 93.8
Sulphide
  0 5 0.6 79.8
  20 5 0.6 85.4

 

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The MMSA test work summarised in Table 13.8 did not establish the residual concentrations of cyanide and lime after leaching, which means that an accurate estimate of the cyanide and lime consumptions cannot be determined from this test work. Previous work has established the cyanide and lime consumption, and these results are summarised in Table 13.9.

 

Report Name Ore Type Source

Milled Particle size

(Microns)

Lime Consumption (kg/t)

NaCN

Consumption (kg/t)

Recovery (%)

MPC IAMGOLD

Phase 2 Met Testwork Summary Project 6011

Feb 2007

Buckreef Main oxide Gravity tailings 80% - 106 3.84 1.14

*L=62.3

*G+L=96.9

Buckreef

North Primary

Gravity tailings 80% - 106 1.05 0.59

*L=56.7

*G+L=94.4

Buckreef Main Primary Gravity tailings 80% - 106 0.36 0.36

*L=55.9

*G+L=93.9

Busolwa Main Oxide Gravity tailings 80% - 106 3.05 1.58

*L=37.2

*G+L=98.0

Busolwa Main

Primary

Gravity tailings 80% - 75 0.78 0.55

*L=53.8

*G+L=98.9

Buziba Oxide Gravity tailings 80% - 106 3.19 1.07

*L=43.3

*G+L=97.9

Buziba

Primary

Gravity

tailings

80% - 75 0.74 0.34

*L=54.0

*G+L=97.6

MMSA 15/059r1

Report Jan 2016

Sulphides (48 hours) Ore As Received 0.6 4.98 71.7

Oxides

(48 hours)

Ore

As

Received

1.3 4.98 62.7
Sulphides No Carbon Ore 80% - 75 0.6 *5 79.8

Sulphides

with Carbon

Ore 80% - 75 0.6 *5 85.4

Oxides

No Carbon

Ore 80% - 75 1.3 *5 82.4

Oxides

with Carbon

Ore 80% - 75 1.3 *5 93.8
Sulphides (24 hours) Ore As Received 0.6 4.98 70.0

Oxides

(24 hours)

Ore

As

Received

1.3 4.98 61.1
 

 

*L = Leaching

 

*G+L = Combined recovery for gravity concentration and cyanidation of gravity tailings

 

*5 = Cyanide added at the beginning of the testwork and residual cyanide after the testwork was not provided

 

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13.14Conclusions

 

Process selection: The test work conducted by MPC and SGS has shown that more than 90% of the gold can be recovered by a combination of gravity concentration and leaching of the tails. The MMSA test work established that 93% of the gold from the oxide ore can be recovered without gravity concentration by carbon-in-pulp leaching. The work established that 85% of the gold from the sulphide can be recovered in a similar manner.

 

Gold deportment: There does not appear to be a concentration of gold with size fraction.

 

Gold head grade: The gold head grade for the metallurgical tests varied between 1.5 and 6 g/t Au. For the bulk samples supplied that were milled using the EDS mill, the oxide head grade was about 1.9 g/t and the sulphide head grade was 4.6 g/t.

 

Milling: The bond mill index for the oxide ore is in the range of 9-12 kWh/t, while that for the sulphide ore is in the range of 19 to 24 kWh/t.

 

Gravity concentration: The gravity concentration test work confirmed that 50% of the gold can be recovered from the oxide ore, and 20% of the gold from the sulphide ore. The mass pulls in both cases is about 4%.

 

Leaching: The cyanidation test work confirmed that the gold recovery in the presence of activated carbon for the oxide ore was about 93% and for the sulphide ore was about 85%, without gravity concentration at a grind size of 80% less than 75 µm. The expected cyanide consumption is 1.1 kg/t, and the expected lime consumption is 1.5 kg/t.

 

13.15Recommendations

 

The test work has established the basic process parameters. There is no data on settling and thickening test work, and no data on the tailings storage facility. These aspects should be addressed.

 

It is recommended that the following test work is conducted:

 

 ·A process simulation run of the EDS mill in recirculation mode using a screen size of 100 micron, followed by bulk gravity concentration and bulk leaching of the tailings;
·Site water characterization;
·Settling and thickening test work;
·Tailings characterization;
·Variability test work.

 

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14.MINERAL RESOURCE ESTIMATE

 

14.1Introduction

 

CIM’s Definition Standards for Mineral Resources and Mineral Reserves (May 2014) defines a mineral resource as a “concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.”

 

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no guarantee that all or any part of the Mineral Resource will be converted into Mineral Reserve. Confidence in the estimate of Inferred Mineral Resources is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure.

 

All Mineral Resource estimation review and due diligence work reported in this section was carried out or reviewed by Virimai Projects. This Mineral Resource estimate is based on information and data supplied by Tanzam2000 Limited. On further review, the block models supplied for the four Mineral Resource areas (Buckreef Main, Eastern Porphyry, Tembo and Bingwa), the Buckreef Main and Tembo block models were contentious because Venmyn Deloitte had handed over five different block models for each of these two areas. Furthermore, the supposedly final block models were materially different from the published Mineral Resources in terms of classification for Buckreef Main and both tonnage and classification in the case of Tembo.

 

14.2Mineral Resource Estimation Models

 

Virimai Projects was availed with a Mineral Resource grade models based on the resource models supplied generated by Venmyn Deloitte. The Mineral Resource estimate was informed by both the diamond drilling and reverse circulation drilling results using only samples confined within the Mineral Resource wireframes constructed by CAE Mining in Datamine™ Studio 3 (version 3.21.7164). For the hard boundary grade estimation, Venmyn Deloitte applied the Ordinary Kriging (OK) method in Datamine™ Studio 3 (version 3.20.5321).

 

The resource models availed for the four deposits considered in this report are listed in Table 14.1. On the 9th of May 2018, Virimai Projects’ Arimon Ngilazi and TRX’s Peter Zizhou visit to Venmyn Deloitte’s offices in Johannesburg to seek clarity on the Buckreef Main and Tembo block models which Venmyn Deloitte had handed to TRX. Furthermore, the supposedly final block models were materially different from the published Mineral Resources in terms of classification for Buckreef Main, and both tonnage and classification in the case of Tembo. Venmyn Deloitte officially identified the correct models on the 10th of May 2018, which Virimai Projects had managed to independently identify during the review. Virimai Projects considered this to be the official handover from which further studies were then conducted. The other block models are deemed to be working models which had been inadvertently handed over.

 

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The resource models availed for the four deposits considered in this report are listed in Table 13.1.

 

Table 13.1 Buckreef Project Resource models, Geita District, Tanzania

 

Mineralisation Area Block Model Model Type Comment
1 Buckreef Main mod_br_uncapped OrdinaryKriging Resource only
2 Eastern Porphyry mod_ep_mixed OrdinaryKriging Resource only
3 Tembo mod_tb_mixed OrdinaryKriging Resource only
4 Bingwa mod_bw_supercap OrdinaryKriging Resource only

 

The block models reflect the general dimensions of the drilling grid that covers each prospect and consist of separate zones with fields for estimated grade, rock code, density and classification among other attributes.

 

 

14.3Mineral Resource Estimation Checks

 

Virimai Projects carried out inverse distance squared estimate out as a high-level check of the global and local (block by block) of the Venmyn Deloitte ordinary kriging estimates. The comparison is shown in Figure 14.1. Although the estimates are spread around the line of equality, the high-level check validates the robustness of the Venmyn Deloitte estimates.

 

Virimai Projects also validated the block models using swathe analysis where the average of length weighted sample grades within a 100 m wide corridor for Buckreef and 50 m for the other prospects were compared to block model grades within the same swathe. This was done in order to verify that the block models correctly reflected the average of the sample grades within the same swathe (Figure 14.2). The results generally show the same trend as the sample grades and the expected smoothening effect of the ordinary kriging process with very high/low sample grades being moderated by the low/high sample grades in the neighbourhood.

 

 

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Buckreef Eastern Porphyry

Tembo Bingwa
Figure 14.1: Virimai Projects block grade checks

 

 

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Buckreef Eastern Porphyry

Tembo Bingwa
Figure 14.2: Virimai Projects average sample grade compared to average estimated block grade checks

 

 

It is pertinent to note that the Bingwa average grades drop below 0.50 g/t from the easting X+396200 (Figure 14.2). The model checks showed that in the north-eastern half of the strike, continuity is poor and resource grades only start at about 40 m below surface (Figure 14.3). The exclusion of this portion is reflected in the difference of the mineable resources declared by Virimai Projects in Table 14.1.

 

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Plan view of resource model   Plan view of resource model at 0.50 g/t cut-off

 

 

 

3D perspective view facing north-west at 0.50 g/t cut off
Figure 14.3: Bingwa model grade distribution checks

 

Given the checks carried out as outlined, Virimai Projects accepted and adopted the Venmyn Deloitte resource and grade models as being acceptable for further use in mining and economic studies.

 

The NI-43101 compliant Mineral Resource estimate as revised by Virimai Projects is shown Table 14.2.

 

Table 14.2: Buckreef Project May 2018 Mineral Resource Estimate at 0.50g/t cut-off grade

 

 

 

Prospect

Measured Indicated Inferred Total Measured + Indicated
Tonnes
(Mt)
Grade
Au (g/t)
Content
Au (Oz)
Tonnes
(Mt)
Grade
Au (g/t)
Content
Au (Oz)
Tonnes
(Mt)
Grade
Au (g/t)
Content
Au (Oz)
Tonnes
(Mt)
Grade
Au (g/t)
Content
Au (Oz)
Buckreef 8.90 1.72 491,368 13.09 1.41 594,097 7.52 1.33 322,819 21.99 1.54 1,085,465
Eastern Porphyry 0.09 1.20 3,366 1.02 1.17 38,339 1.24 1.39 55,380 1.10 1.18 41,705
Tembo 0.02 0.99 531 0.19 1.77 10,518 0.27 1.92 16,461 0.20 1.70 11,048
Bingwa 0.90 2.84 82,145 0.49 1.48 23,331 0.22 1.49 10,541 1.39 2.36 105,477
Total 9.90 1.81 577,411 14.79 1.40 666,285 9.25 1.36 405,201 24.69 1.57 1,243,696

 

 

Table 14.3 summarises the differences in the 2014 and 2018 Mineral Resource estimates due to the validation process by Virimai Projects on the geological models supplied by Venymn Deloitte.

 

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Table 14.3: Buckreef Project Comparative Mineral Resource

 

  Virimai May 2018 @ 0.50g/t Au cut-off Venmyn Jan 2014 @ 0.50 g/t Au cut-off Virimai - Venmyn
Prospect Name Resource Category Tonnes (Mt) Grade Au (g/t) In Situ Gold Content Tonnes (Mt) Grade Au (g/t) In Situ Gold Content Virimai Projects
kg oz kg oz Tonnes Content

 

 

Buckreef

Measured 8.90 1.72 15,283 491,368 8.90 1.72 15,288 491,526 0.0% 0.0%
Indicated 13.09 1.41 18,479 594,097 13.10 1.41 18,490 594,452 -0.1% -0.1%
Inferred 7.52 1.33 10,041 322,819 7.53 1.33 10,043 322,900 0.0% 0.0%
Total Measured + Indicated 21.99 1.54 33,762 1,085,465 22.00 1.54 33,778 1,085,978 0.0% 0.0%
                       

 

Eastern Porphyry

Measured 0.09 1.20 105 3,366 0.09 1.20 105 3,366 0.0% 0.0%
Indicated 1.02 1.17 1,192 38,339 1.02 1.17 1,193 38,354 0.0% 0.0%
Inferred 1.24 1.39 1,723 55,380 1.24 1.39 1,725 55,476 -0.1% -0.2%
Total Measured + Indicated 1.10 1.18 1,297 41,705 1.10 1.18 1,298 41,721 0.0% 0.0%
                       

 

 

Tembo

Measured 0.02 0.99 17 531 0.02 0.99 17 531 0.0% 0.0%
Indicated 0.19 1.77 327 10,518 0.19 1.77 327 10,518 0.0% 0.0%
Inferred 0.27 1.92 512 16,461 0.27 1.93 514 16,521 -0.2% -0.4%
Total Measured + Indicated 0.20 1.70 344 11,048 0.20 1.70 344 11,048 0.0% 0.0%
                       

 

 

 

Bingwa

Measured 0.90 2.84 2,555 82,145 0.91 2.83 2,563 82,386 -0.9% -0.3%

 

Indicated

 

0.49

 

1.48

 

726

 

23,331

 

0.57

 

1.38

 

786

 

25,274

- 15.8%

 

-8.3%

 

Inferred

 

0.22

 

1.49

 

328

 

10,541

 

0.31

 

1.29

 

402

 

12,922

- 42.3%

 

-22.6%

Total Measured + Indicated 1.39 2.36 3,281 105,477 1.48 2.27 3,349 107,660 -6.1% -2.1%
                       

 

Grand Total

Measured 9.90 1.81 17,960 577,411 9.91 1.81 17,972 577,810 -0.1% -0.1%
Indicated 14.79 1.40 20,724 666,285 14.87 1.40 20,796 668,598 -0.6% -0.3%
Inferred 9.25 1.36 12,603 405,201 9.35 1.36 12,685 407,819 -1.1% -0.6%
Measured + Indicated 24.69 1.57 38,684 1,243,696 24.78 1.56 38,768 1,246,408 -0.4% -0.2%

 

Note:

 

1. Virimai Projects "lost" some 10,730t from re-modelling of surface DTM by extending it constrain blocks projecting above surface.

 

2.  Virimai Projects restated Bingwa Resources to exclude the North-eastern portion which has deep seated, discontinuous resource grade pockets

 

Given that the valid reasons outlined above, Virimai Projects has modified the Mineral Resource estimates for classification into Measured, Indicated and Inferred categories and thus takes full responsibility for the updated Mineral Resource and considers the data to be reliable.

 

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14.4Mineral Resources and Conclusions

 

There is a fair amount of Inferred Mineral Resources from surface to about 200 m below surface the envisaged open-pit mining depth. In order to upgrade only the mineable resources, Virimai Projects recommends that some infill drilling be carried out prior to the feasibility study primarily in order to upgrade the Inferred Mineral Resources within the reserve shell. During that process, it is expected that some Indicated Mineral Resources will be upgraded to Measured Mineral Resources. There are 29 recommended holes totalling 4,463 m laid out as shown in Figure 14.4.

 

 

 

Figure 14.4: Plan view of infill (red) and existing (black) drill holes in red superimposed on the resource shell

 

As shown in Figure 14.5, the planned holes do not necessarily terminate at the pit shell boundaries as there is an exploration component for extension beyond the pit limits as currently optimised. Therefore, there is scope to optimise the drilling programme at the execution stage to suit the compelling objectives of the feasibility study.

 

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Perspective view of planned holes facing NE   Perspective view of planned holes facing SSE

 

 

 

Cross section view of classifed blocks, planned (red) and existing (black) drill holes facing NE
Figure 14.5: Different views of the planned drill holes showing pit outline

 

The estimated cost of the infill drilling to be carried out in two months are summarised in Table 14.4 based on the proposed hole parameters in Table 14.5. The drilling is expected to start in July 2018.

 

Table 14.4: Buckreef Project: Resource Upgrade Drilling Proposal Budget

 

Item Month 1 Month 2 Totals
Drilling Costs-Contractor (RC Drilling) $162,000 $239,670 $401,670
Contractors –Mobilisation and Demobilisation $10,000 $0 $10,000
Consumables Sample bags $1,350 $1,997 $3,347
Consumables Packaging $90 $133 $223
Consumables QAQC Standards (4 CRMs) $450 $666 $1,116
Consumables Ticket books $288 $426 $714
Sample delivery (Truck/fuel/Accommodation) $300 $300 $600
Assay/analysis $28,350 $41,942 $70,292
Contingency (5%) $10,141 $14,257 $24,398
Totals $212,969 $299,391 $512,361

 

 

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Table 14.5: Buckreef Main proposed infill drill holes

 

BHID XCOLLAR YCOLLAR ZCOLLAR DIP AZIMUTH DEPTH (m)
PBR01 391539 9658636 1224 55 303 186
PBR02 391407 9658469 1227 65 303 151
PBR03 391367 9658495 1229 60 303 93
PBR04 391509 9658283 1227 50 303 222
PBR05 391359 9658202 1218 55 303 168
PBR06 391297 9658182 1229 60 303 269
PBR07 391362 9658141 1228 60 303 173
PBR08 391255 9658150 1226 60 303 203
PBR09 391215 9658177 1229 60 303 164
PBR10 391300 9658121 1224 60 303 220
PBR11 391182 9658138 1228 60 303 122
PBR12 391222 9658112 1225 60 303 164
PBR13 391288 9658069 1219 60 303 115
PBR14 391208 9658061 1223 60 303 220
PBR15 391160 9658093 1228 55 303 192
PBR16 391161 9658033 1225 55 303 150
PBR17 391111 9658065 1230 55 303 122
PBR18 391112 9658005 1222 65 303 147
PBR19 391038 9657993 1231 55 303 115
PBR20 391058 9657920 1223 60 303 153
PBR21 391095 9657837 1226 55 303 237
PBR22 391041 9657872 1228 55 303 173
PBR23 390990 9657905 1227 55 303 147
PBR24 391108 9657769 1225 55 303 82
PBR25 390966 9657861 1228 65 303 111
PBR26 391011 9657832 1227 55 303 137
PBR27 391057 9657742 1225 60 303 112
PBR28 391094 9657718 1224 50 303 67
PBR29 391027 9657702 1223 60 303 48
Total metres proposed 4,463

 

 

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15.MINERAL RESERVE ESTIMATE

 

15.1Introduction

 

This section describes the Mineral Reserves estimation process completed by Virimai Projects in June 2018. By definition a Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. The Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. The Mineral Reserve takes into account diluting material that will be mined in conjunction with the economic mineralized rock and delivered to the processing plant also takes into account the likely unrecoverable material that will be either left in the ground or will be associated with disposed waste rock.

 

Further, the Mineral Reserves are classified as only Proven and/or Probable in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) classification of NI 43-101 Resource and Reserve definitions, and the Companion Policy 43-101CP.

 

In the calculation of reserves the most important step is to ascertain the portion of mineral resource that can be mined economically. Various parameters are put together and used as inputs for the purpose of carrying out criteria-based computations, in the process of defining economic limits of the orebody. In case of surface mining, these computations are done through a process known as Pit Optimization which is performed by using a well-known Lerch’s-Grossman algorithm. The algorithm is implemented in various mine planning software applications such as Geovia Whittle, NPV Scheduler and many others. Given the right input parameters such as geological block model grades, rock classification, mining and processing costs, metal recoveries, geo-technical parameters and the metal price, the software generates a series of nested pit shells. For the purposes of pit optimization, costs are grouped into five key categories as mining, processing, selling, rehabilitation/reclamation and general/administration costs.

 

From optimization results, final pit shell is selected usually on the basis that it in general maximizes undiscounted or discounted cash flow at the given economic parameters and the applied physical constraints; however, it can also be selected by considering other factors such as the maximum quantity of metal product being able to realistically produce without adversely affecting the overall economic outcome of the project.

 

Once the optimal pit shell is selected, it is necessary to carry out designs for the purpose of putting into consideration various practical aspects such as access ramps, benched pit walls, geotechnical berms, minimum mining widths and pit phasing. Using the created pit designs, mineral reserves are calculated within those designs to determine tonnage and grade only of the indicated and measured part of the mineral resources, which are respectively converted to probable and proven mineral reserves. An economic cut-off grade is usually applied in the calculation to discriminate ore and waste that fall within the designed pit. Mined rock material of grade below cut-off grade would not be profitable if processed basing on the prevailing economic and technological conditions; these materials together with completely barren rock are reported as waste. Reserves estimates presented in this report followed this process and include four deposits that are Buckreef, Eastern Porphyry, Bingwa and Tembo. These deposits contain gold mineralization starting from near the ground surface with generally continued spatial distribution in a manner that is suitable for surface mining particularly open pit mining method.

 

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15.2Open Pit Mining

 

Considering that all the four deposits somehow start from or near the ground surface, Open Pit mining method was a logical choice made by Virimai Projects in completing reserves preparation.

 

Open pit mining involves cutting vertical or subvertical faces in the ground with reasonable step-ins technically known as benches. Access between benches to the lowest one, is via inclined ramps wrapping around the wall of the pit. Ramps are developed progressively as the pit continues to develop downward. Open pit design follows as closely as possible the selected pit shell in order to stay within expected economic limits. Design also follows geotechnical recommendations in order to ensure long term stability of the mine and reduced risks wall failures .

 

15.3Resource Block Model

 

Virimai Projects used resources models discussed in chapter 14 of this report for completing mine planning. The model contains among many others important attributes including gold grade field, rock type coding, ore zones coding, mineral resources classification field etc.

 

15.4Open Pit Optimization

 

Pit optimisations were done using Lerch-Grossman algorithm available in Whittle software. The geological block models were imported into the software considering no depletion of any mined surfaces. The input parameters used in running pit optimisations are shown in Tables below.

 

Table 15.1: Key Economic Parameters

 

Parameters Value Units
Long Term Gold Price - Reserves 1,300 $/Oz
Long Term Gold Price - Resources 1,600 $/Oz
Gov. Royalties 6.00 %
Export Fee 1.00 %
Other Applicable Fees (Local Service Levy) 0.30 %
Discount Rate 8.00 %
Other Selling Costs (Smelting, Insurance, Security etc) 4.40 $/Oz
Exchange Rate 2,250 TZS/USD
Fuel/Diesel Price 1.20 $/L

 

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Table 15.2: Main Operating Constraints

 

Parameters Value Units
Maximum Mining Limit 14.00 Mtpa
Processing Limit 1.45 Mtpa
Ore Dilution (External) 5.00 %
Ore Loss 5.00 %
Call factor 100.00 %

 

 

For running optimizations geotechnical parameters are an integral part and must be understood and applied correctly. Since optimization shells do not include access ramps and/or geotechnical berms, it is vital that sufficient allowance is made to account for these berms and possible geotechnical stability step offs.

 

Table 15.3: Geotechnical Parameters

 

Inter-ramp Slope Angle Weathered/Soft Transitional Fresh Rock
For Pit Design (Degrees) 29 46 52
For Optimization (Degrees) 28 44 47
Flattening for Ramps (Degrees) -1 -2 -5

 

It is noted that the hard rock part has been penalized with higher IRA flattening in order to account for ramps wrapping around the pit walls several times. Geotechnical berms are also taken into consideration.

 

Table 15.4: Processing Parameters

 

Processing Units Oxide Trans Hard
Recoveries % 92.33% 92.33% 85.50%
Processing Cost ($/t) 10.09 10.09 10.24
Rehabilitation Cost ($/t) 0.03 0.03 0.03
G&A Costs ($/t) 1.98 1.98 1.98
Total Ore Cost ($/t) 12.10 12.10 12.25

 

The following is a summary of the outcome of pit optimization for the four deposits.

 

·There are in total 4 possible push-backs for Buckreef Pit.
·Bingwa is a single pushback to the final limits
·Eastern Porphyry is also a single pushback to the final limits
·Tembo is mined to the ultimate pit limits in one single phase also.

 

Optimizations were carried out based on $1300/Oz gold price where by nested pit shells were create using a range of revenue factors between 0.3 and 2 at $20 increments for each deposit.

 

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Analysis for each of the pits was completed resulting in cashflow summaries and charts showing various metrics including discounted and undiscounted cashflow useful for decision making in shell selection.

 

Guided by the corporate policy where by the company intends to maximize gold production at the best possible economic value, pitshells selected were not necessarily of highest undiscounted cash flow as shown in the charts for each deposit. Selected pits strike a balance between best pit value and gold ounces produce to also maximize mine life which give optionality for developing other potential targets within the area.

 

15.4.1Buckreef Pit

 

Due to its relatively larger size, Buckreef pit was split into a total of four phases; as a result, its overall value improved significantly by differing waste stripping and improves cash flow in the early years of its life.

 

 

 

 

Figure 15-1: Pit by Pit Graph for Buckreef Pit

 

Buckreef has been determined to be mineable in 4 phases; which by doing so would allow for deferment of waste stripping hence improve cashflow in the earlier years. Pit shell number 12 was selected to be Phase One or the starter pit, Pit shell number 19 Phase Two, pit shell 29 phase three and the final pit shell was 49. By looking at pit by pit graphs, usually at step changes represent significant pits shell size change hence suitable for picking pit phases.

 

Isometric view of the selected pit shells with ore blocks as presented below, depict that Buckreef pits is generally high stripping pit due to its subvertical orebody.

 

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Figure 15-2: Buckreef Selected Ultimate Pit

 

 

15.4.2Bingwa Pit

 

Bingwa is the second in size on tonnage basis, it however is not large enough to warrant phasing. And is also a short life pit which as a result phasing would not bear any beneficial outcome. Therefore, only the ultimate pit was selected.

 

 

 

 

Figure 15-3: Pit by Pit graph for Bingwa

 

 

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Figure 15-4: Bingwa Selected Ultimate Pit

 

15.4.3Eastern Porphyry Pit

 

Eastern Porphyry is a small pit just next to the main Buckreef pit, similar to Bingwa it is a small satellite pit that cannot be practically phased. Ultimate pit shells was selected to be shell number 38

 

 

 

Figure 15-5: Pit by Pit graph for Eastern Porphyry

 

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Figure 15-6: Eastern Porphyry Pit Selected Ultimate Pit

 

15.4.4Tembo Pit

 

Tembo is the smallest of all the four deposits and follows the same trend as other satellite pits being too small for any possible phasing. Ultimate selected shell is number 13.

 

 

 

 

Figure 15-7: Pit by Pit graph for Tembo

 

 

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Figure 15-8: Tembo Pit Selected Ultimate Pit

 

 

15.5Detailed Mine Design

 

Open pit mine designs followed the selected economic limits represented by the selected pit shells. Considering that, the deposits are made up of weathered/soft, Transitional and fresh rocks which differ in competency, the design parameters differed based on rock type. Detailed geotechnical study is yet to be completed which may optimize these parameters. However, present assumptions are quite reasonable and are within the limits of parameters applied by mines around the Buckreef project with similar rock characteristics. Pit design parameters used for design of all the four pits are summarised in Table 15-6

 

Table 15-6 Mine Design Parameters

 

Design Criteria Weathered/Soft Transitional Fresh Rock
Bench Height (m) 5 10 10
Berm Width (m) 6 8 6
Batter Angle (Degrees) 60 80 80
Ramp Width (m) 10 10 10
Stack Height (m) 40 40 40
Stack Berm Width (m) 10 10 10
Inter-ramp Slope Angle (Degrees) 29 46 52

 

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Additionally, waste rock dumps were designed taking into account the final footprint after rehabilitation shaping for rehabilitation purposes. A summary of waste rock dump design parameters are as follows: -

 

  · Lift Height 15m
  · Ramp Width 10m
  · Ramp Gradient 10%
  · Tipping Angle 32 degrees
  · Final Angle of Rehab 18 degrees

 

 

 

 

Figure 15-8: Buckreef and Eastern Porphyry Pit and Waste Dump

 

 

 

 

Figure 15-9: Buckreef Pit Design Plan and Sections

 

 

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15.6In-Pit Dilution and Mining Recovery

 

Dilution is the term used to describe the grade drop of mined ore in relation to the originally computed insitu grade due to addition of lower grade material or completely barren material. Technically there are two types of dilution, these are internal and external dilution.

 

Internal dilution is usually a result of averaging material grade to include waste lenses that may be within the ore zone. This is taken care off during resource modelling and so the estimated grade has already accounted for internal dilution. Of particular concern for mine planning purpose is external dilution which is taken into account in order to a consider practical limitations of mining the ore without mixing it with lower grade or barren material. In real life it is not practically possible to completely avoid the mixing consequently the ore grade is diluted due to mining practices. For this project, no extensive mining has taken place hence estimation of dilution is based on experience from other deposits of similar characteristics. It is further expected that responsible mining will be practiced in order to minimize ore dilution. For the purpose of this study it was therefore assumed that 5% will be the applicable dilution.

 

On the other hand, ore loss is a result of poor recovery from especially ore body contacts where by part of the ore is left in the ground or the split in waste and ore boundaries is not precise enough as a result portion of the ore is sent to the waste rock disposal areas. This is also an outcome of mining practices. With application of leading practices, it can be controlled and reduced. An ore loss of 5% was also considered.

 

15.7Cut-Off Grade Criteria

 

In order to determine ore and waste within the pit designs, fixed cut-off grades by rock type were computed based on break-even analysis. In this analysis, all materials with grades equal or above the prescribed cut-off were classified as ore, whereas the rest with grades lower than the cut-off were considered as waste.

The breakeven calculation formula is used is as follows: -

 

 

Where

·Cut-Off is expressed in grams per tonne (g/t)
·Processing cost is in dollars per tonne of ore processed ($/t)
·Rehabilitation cost is in dollars per tonne of mined ($/t)
·Gold price in dollars per gram recovered ($/gm)
·And recovery in percentage or fraction of contained gold in the ore fed to the process.

 

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15.8Open Pit Material Inventory

 

After completing all the steps in preparation as described in this section for computation of reserves pit design and cut off grades were used to calculate reserves for each deposit. The obtained Cut off grade was used to classify ore and waste but also resource class Indicated and Measured were used to convert ore tonnes in those categories into Probable and Proven reserves respectively.

 

Table 15.7 Open Pit Reserves Summary

 

 

Pits Design Reserves Summary Round 3

COG: Oxide & Trans = 0.34, Fresh = 0.37