EXPLORATION ROUNDUP — Underground development begins at Bulyanhulu gold project

As diamond drilling continues to explore the huge Bulyanhulu gold deposit in Tanzania, Sutton Resources (STT-V) has started an independent study of underground development.

Sutton holds an 85% intereset in the project, with the remainder held by the Tanzanian government.

The underground study, to be conducted by an independent engineering firm over a period of 17 months, will entail 3,200 metres of workings, including a decline and two levels at 120 and 180 metres below surface. By February 1997, the decline is expected to reach bedrock, and Reef 1 (one of two mineralized horizons) should be reached by July.

The workings will also form the production headings for the first three years of full-scale mining prior to shaft-sinking.

A bankable feasibility study is expected to get under way by the first quarter of 1998.

Preliminary engineering studies indicate the project is capable of producing 200,000 oz. gold annually, with cash costs estimated at US$125 per oz.

Current resource estimates for the deposit are 7.25 million tonnes grading 15.4 grams gold per tonne, equivalent to 3.5 million contained ounces. These resources are contained in Reefs 1 and 2.

Two diamond drill rigs are currently on site, with another expected shortly.

One will explore Reef 1 at a depth of 600-800 metres, while another conducts infill-drilling. The third rig will test other targets in the area, as well as attempt to extend known zones.

Also, a reverse-circulation (RC) drill, due to arrive shortly, will test the oxidized zone above Reef 1 for open-pit potential. The RC program will consist of 10,000 metres of drilling.

The total cost of the underground and surface program is expected to approach US$20 million, of which US$5 million is earmarked for drilling.

Itetemia project

Meanwhile, on an adjoining property to the east, Tan Range Exploration has been conducting diamond drilling on its 90%-owned Itetemia property. The program is testing the southeastern extension of the Bulyanhulu deposit.

To date, two holes have been completed, both of which intersected the same stratigraphy that hosts the Bulyanhulu deposit. One hole intersected an 11-metre-thick pyrite zone underlain by a 3-metre-thick, carbonate-quartz stringer zone. At a depth of 230 metres, the stringer zone is hosted by pyrite-bearing, graphitic tuff and sediment. Assay results from the two holes are pending.

In the hope of identifying other zones in the area, the company has allocated US$2.1 million for the 1996-1997 season. Tan Range is also conducting exploration programs, including diamond drilling, on other properties in Tanzania.

Mgusu project

Northeast of the Itetemia property, Pangea Goldfields (PGD-T) has completed a first-phase program of RC drilling on its 90%-owned Mgusu project.

Highlights include: 9 metres grading 14.92 grams gold for hole 2; 21 metres grading 5.89 grams gold, including 9 metres grading 11.12 grams gold, for hole 8; and 5 metres grading 21.09 grams gold for hole 11.

The intersections are associated with mineralized shear zones in a porphyritic intrusive and near the contact between porphyry and banded-iron formation. In January, the company plans to carry out diamond drilling to continue testing these shear zones and other geophysical targets on the Mgusu property, as well as conduct diamond drilling on other properties in Tanzania.

Ikungu project

Elsewhere in Tanzania, Patrician Gold Mines (PXX-A) reports that 11 diamond drill holes have been completed on its wholly owned Ikungu property, which hosts the past-producing Forest Reef gold mine. The holes were drilled by South African mining house JCI, which can earn a 70% stake in the property by spending US$1.7 million on exploration.

The 11 holes tested the Forest Reef, Phoenix and 18 Pennyweight Reef zones.

Highlights from the Forest Reef drilling include: 7.16 metres (from 94.21 to 104.34 metres) of true width grading 1.46 grams gold, including 2.89 metres (from 95.21 to 98.10 metres) grading 3.57 grams gold, for hole 2.

Results from the 18 Pennyweight Reef include: 25 metres of true width (from 194.9 to 238.47 metres) grading 1.16 grams gold, including 13.84 metres (from 206.72 to 230.85 metres) of true width grading 1.98 grams gold, for hole 4.

The company also plans to drill four more holes, two of which will be completed on the 18 Pennyweight Reef; the other two holes will be drilled on the Phoenix Reef.