Tan Range Exploration Corp -
Tan Range and Ashanti agree to explore at Geita East
Tan Range Exploration Corp TNX
Shares issued 35,449,547 1999-01-25 close $0.26
Tuesday Jan 26 1999
Also Ashanti Goldfields Co Ltd (AHD.U)
Mr. Marek Kreczmer reports
Tan Range Exploration has signed a heads of agreement with Ashanti Goldfields under which Ashanti will have the exclusive option to acquire an undivided 60 per cent interest (two-thirds of Tan Range's 90 per cent interest) in the Geita East prospecting licence by completing a bankable feasibility study by Dec. 31, 2002. Upon completion of the bankable feasibility study, Ashanti will be required to make a production decision regarding the licence within 60 days or make a cash payment to Tan Range of $100,000 (U.S.). The payments will escalate annually by $100,000 (U.S.) for every year that a production decision is not made, to a maximum of $500,000 (U.S.) annually.
The licence is adjacent to Ashanti's Geita mine property in the Lake Victoria greenstone region of Tanzania. Ashanti has started work on the 3.4 million ounce Geita mine, a $150-million project which will be developed into one of Africa's biggest mines, producing about 450,000 ounces annually by early 2000. In late 1998 Ashanti increased its landholdings at Geita through the purchase of Samax Gold Inc. for approximately $185-million. Samax had previously announced a gold resource of 1.6 million ounces at Kukuluma. Tan Range has conducted a rapid air blast drilling program which has traced the favourable gold horizon on to the licence.
The technical representatives from both companies are already preparing a first phase exploration program which will commence as soon as the formal agreement has been signed. The agreement contemplates the formation of a technical committee for the purpose of administering an exploration program on the licence. Ashanti and Tan Range have agreed that the budget for 1999 provide for costs of at least $500,000 (U.S.); however, Ashanti has the right to terminate the agreement any time after costs of exploration in 1999 amount to $150,000 (U.S.). All costs of exploration, including the feasibility study, will be borne by Ashanti.
Ashanti operates the largest bio-oxidation plant in the world at its Obuasi mine in Ghana which produces over 850,000 ounces of gold annually. The company has hedged 6.5 million ounces at $401 (U.S.) per ounce and is actively seeking to expand its proven and probable gold reserves of 23 million ounces through exploration of the significant gold belts of Sub-Saharan Africa. Ashanti has expressed an interest in reviewing the technical data on other Tanzanian properties held by Tan Range.
Tan Range is a gold company which holds a large portfolio of exploration licences in the Lake Victoria greenstone region of Tanzania. This region of Africa has attracted the world's major gold producers with the discovery of several multimillion ounce deposits. Due to its early involvement in gold exploration in Tanzania, Tan Range now controls some of the region's key exploration licences. Tan Range's principal project, Itetemia - Golden Horseshoe Reef, is at an early drilling stage and results to date are highly encouraging. This project is adjacent to the 7.7 million ounce Bulyankhulu deposit currently being developed by Sutton Resources Ltd.
The agreement is subject to the approval of the boards of directors of Ashanti and Tan Range, to all required stock exchange or regulatory approvals, and to completion and execution of a formal agreement in a timely fashion.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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