New TanGold Rapidly Executing Business Plan and Reports Second Quarter 2021 Results
April 14 2021 - 7:00AM
Tanzanian Gold Corporation (TSX:TNX) (NYSE American:TRX) (TanGold
or the Company) today announced results for the second quarter of
2021 (“Q2 2021”). Financial results for Q2 2021 will be available
on the Company’s website and will be filed on SEDAR and provided on
EDGAR on or before April 14, 2021. All figures are in Canadian
dollars unless otherwise expressed.
Highlights
Overview
- Raised USD $24.4 million significantly
improving net working capital, liquidity and corporate position in
Tanzania
- Strong additions to
senior management team and alignment of operating management at
Buckreef
- Working with
Stamico (Government of Tanzania) to advance the Buckreef Project
and modernizing the joint venture agreement
- Positive operating
results on oxide test plant to build larger oxide operation
targeting production of 15,000 - 20,000 ounces of gold per
year
- Positive
metallurgical test results, now moving to variability metallurgical
testing of the first 5- 7 years of production
- Positive exploration
results that enables the Company to advance drilling activity
across mineral resource
Stephen Mullowney, Chief Executive Officer of
TanGold stated: “The first 120 days of my tenure have been
exhilarating. I am extremely excited with all the improvements we
have made across the entire business. Please enjoy reading about
some of our accomplishments below. We believe that the work done to
date and the work ahead of us positions the Company for continued
success over the short, medium and long term. This is an exciting
time! I would like to congratulate everyone involved on a job well
done and look forward to working closely with the TanGold team, the
Buckreef team and our joint venture partner, Stamico, to continue
to advance the development of the Buckreef Project to become a
major new mine in Tanzania.”
Accomplishments and
Highlights
Operations
- Continued
operation of the 5 tonnes per hour (“tph”) test oxide plant, 7 days
a week with two 12-hour shifts, producing 285.9 ounces of pure gold
in Q2-2021. The test plant significantly de-risks the development
of a much larger oxide operation, which will target production
capacity of 15,000 – 20,000 ounces of gold per year. During the
quarter the plant continued to show increases in gold recovery and
continues to substantiate our grade control block model. The plant
is also providing valuable tailings test samples for the envisaged
dry-stack tailings facility.
- Positive
exploration results continue to be returned from the Buckreef West
Zone. As of this quarter, over 400m of a shallow gold mineralized
shear zone has been delineated. The zone remains open along strike
to the north and south, and at depth.
- The Company,
through Buckreef Gold Company Limited (BGCL), announced highly
favourable metallurgical test results from the sulphide component
of the Buckreef mineral resource. Three diamond drill core samples
were taken from the fresh rock (‘sulphide’ mineral resource) of the
Buckreef deposit for the purposes of metallurgical test work. The
following intercepts and gold recovery rates were observed:
- MC01: 0.54 g/t
over 78.88m – 94.1%
- MC02: 19.4 g/t
over 27.99m – 95.4%
- MC03: 1.71 g/t
over 52.53m – 85.3%See the Company’s press release of February 25,
2021 for further detail.
- TanGold, through BGCL also
announced that SGS Canada Inc. has advised that a straightforward
sulphide flowsheet for the sulphide plant consisting of crush/grind
and flotation followed by regrinding of the rougher concentrate and
cyanidation at site, along with cyanidation of the flotation
tailing is currently the metallurgically optimal mill circuit. Dore
will be produced at site.
- The Buckreef
geological team has commenced their 2021 geological fieldwork
season and has discovered an additional gold bearing shear zone at
surface approximately 0.5km to the south- east of the main Buckreef
Shear Zone. Field mapping, shear zone delineation and sampling are
in progress.
- TanGold, through
BGCL recommenced the tender process with prospective EPC and
‘owner’s engineer’ service providers to re-submit their bids for a
40 tph oxide CIL process plant. Once complete, the Company will
complete an internal assessment and adjudication of the bids in
partnership with its JV partner, Stamico.
- TanGold, through
BGCL hired a surveying consultant (Property Matrix Company Limited)
to commence the land compensation and procurement process required
under Tanzanian mining law to construct the 40 tph oxide mining and
processing operation. Land compensation is anticipated to be
finalized by fiscal 2021.
- A mine-based
assay / chemical laboratory has arrived at site and is currently
being installed at Buckreef. The laboratory is on schedule for test
work and operation by the end of Q3-2021.
- A local road
currently passes through the ultimate pit shell for the Buckreef
deposit. The Company has developed a plan to relocate the road.
Survey of the new road location is anticipated to commence in
Q3-2021.
- The Company
reported zero lost time injuries (“LTI”), zero medical aid
incidents and had no COVID related cases in Q2-2021.
Management
- On February 8th,
2021, the Company appointed Andrew Cheatle, P.Geo., MBA, FGS, ARSM
as Chief Operating Officer of Tanzanian Gold Corporation. A
graduate of the Royal School of Mines, Imperial College, London,
his 30-plus-years international career has encompassed
operations/production, development, and exploration in both the
senior & junior mining sectors. His considerable operational
and project management experience includes senior positions with
the development of (at that time) Anglo American Corporation’s Moab
Khotsong Gold Mine, JCI’s South Deep Project and major expansions
of Placer Dome’s/Goldcorp’s Musselwhite Mine.
- On March 1st,
2021, the Company appointed Michael P. Leonard, CPA, CA as Chief
Financial Officer. He was previously at Barrick Gold Corporation in
a series of progressively senior financial leadership positions and
brings a wealth of experience in investor relations and corporate
global finance. He will fill a vital role for the Company’s
strategy moving forward including use of state-of-the-art
technology and development and implementation of financial models,
financial controls and procedures for financial management.
- TanGold, through
BGCL, appointed Isaac Bisansaba and Gaston Mujwahuzi as Co-Acting
General Managers for Buckreef, on an alternating basis. Mr.
Bisansaba and Mr. Mujwahuzi are directly responsible for monitoring
and improving the mining and processing operations at Buckreef. Mr.
Bisansaba has a BS.Geo, Masters in Mining Engineering, Mineral
Resources Evaluation, and twenty years of experience in the gold
mining industry. Mr. Mujwahuzi has a BS, Mineral Processing
Engineering, and over sixteen years of experience in the gold
mining industry. Collectively, their experience encompasses all
aspects of gold mining operations, including managing mining,
process plant and exploration activities. Their prior experience
includes roles with AngloGold Ashanti, Barrick Gold, Teranga Gold,
PanAust Limited and various consulting firms. Together, they
possess the knowledge and experience BGCL requires going forward,
as well as strong team leadership capabilities for safe, smooth and
ongoing management of on-site operations.
- On March 17, 2021,
the Company appointed Shubo Rakhit, CPA, CA to the Board of
Directors of Tanzanian Gold Corporation. His 30+ year career has
included positions at several large investment banks and advisory
firms including Canada’s major bank owned investment banks, BofA
Securities, KPMG Corporate Finance and Echelon Wealth Partners
where he most recently served as Managing Director, Head of Mergers
and Acquisitions. His career includes leading over $80B of M&A
transactions and over $100B of global capital markets issuance
including many complex strategic and capital solutions. His
background and experience will assist the Company in broadening its
access to capital markets at a time of rapid growth for the
organization.
- TanGold, changed
its nominees to the BGCL board to: (i) Stephen Mullowney; (ii)
Andrew Cheatle; (iii) Michael Leonard; and (iv) Shubo Rakhit to
better reflect the new management team and vision for the Company.
Stephen Mullowney was nominated Chairman of BGCL.
Financing
- On December 23,
2020, the Company completed the sale of 5,554,588 common shares
together with warrants to purchase 2,777,268 common shares for
approximately USD $3.0 million in the aggregate with certain
investors. The common shares and warrants were issued at USD $0.54
for each common share and a one-half purchase warrant, with the
right of each whole warrant to purchase one common share at USD
$1.50 for a period of three years from the issue date.
- USD$7.0 million
of Tranche A debentures, representing the entire outstanding
balance, were converted and retired, resulting in the issuance of
12,150,447 common shares.
- On February 11,
2021, the Company completed the sale of 32,923,078 common shares
together with warrants to purchase 16,461,539 common shares for USD
$21.4 million in the aggregate. The common shares and warrants were
issued at USD $0.65 for each common share and a one-half purchase
warrant with the right of each whole warrant to purchase one common
share at USD $0.80 for a period of five years from the issue date.
The Company also issued 1,152,307 broker warrants with the same
terms.
- Following the
completion of two capital raises, the Company had net working
capital of $18.0 million, including cash of $27.7 million, as at
February 28, 2021 reflecting a significant improvement in overall
liquidity and financial flexibility.
Other
- The Company was
honored to have Stamico Buckreef Directors visit the Buckreef
Project on December 5, 2020 and the Honourable Minister for
Minerals, Mr. D. Biteko visit the Buckreef Project on December 31,
2020. Both visits were well received and continue to demonstrate
the importance of developing the Buckreef Project.
- In January 2021,
representatives TanGold and Stamico representatives met with the
Ministry of Minerals of Tanzania and the Mining Commission in
Dodoma. The Company also attended the Tanzanian Minerals and Mining
Investment Conference in February 2021, in which BGCL was a
sponsor.
- As previously
disclosed, TanGold and Stamico agreed in principle to amendments to
the Buckreef Joint Venture Agreement (the “JV Agreement”) to bring
the JV Agreement in line with recent changes in Tanzanian mining
laws and to modernize the working arrangement between the parties
(the original JV Agreement was entered into in 2011). The Company
continues to advance documentation of the amended JV Agreement and
anticipates finalizing the agreement in fiscal 2021.
- Subsequent to
February 28, 2021, the Company renegotiated the final delay penalty
in the JV Agreement. The Company agreed to pay Stamico USD $0.75
million in six monthly installments of USD $0.125 million with
retrospective effect from January to June 2021. Upon payment of the
final installment, Stamico shall have no further claim related to
delay penalties.
- Subsequent to
February 28, 2021 the Company confirmed all amounts in arrears with
the Mining Commission related to annual mining and exploration
license fees and paid $0.3 million to settle all amounts owing,
including unpaid license fees and penalties. Subsequent to February
28, 2021 the Company has no further amounts in arrears related to
license fees and has fully accrued for all valid and active mining
licenses.
- The Company,
through BGCL procured and donated 300 school desks to the Kaseme
Secondary School in Geita Region.
Outlook
- The Company,
along with Stamico, will evaluate the economic feasibility and
required regulations to expand the 5 tph test plant to 15 tph as an
interim expansion, while at the same time constructing the 40 tph
oxide mill. An expanded test plant would further de-risk the larger
operations and potentially provide the ability to ultimately
operate a larger oxide mining operation.
- As mentioned
above, the tender process with prospective EPC and ‘owner’s
engineer’ service providers to re-submit their bids for a 40 tph
oxide ore CIL process plant has commenced. Once complete, the
Company will complete an internal assessment and adjudication of
the bids in partnership with its JV partner, Stamico. This
assessment and adjudication of bids is anticipated to be completed
by the end of fiscal 2021.
- As mentioned
above, TanGold, through BGCL hired a surveying consultant (Property
Matrix Company Limited) to commence the land compensation and
procurement process required under Tanzanian mining law to
construct the 40 tph oxide mining and processing operation. Land
compensation is anticipated to be finalized by fiscal 2021.
- The feasibility
study will continue throughout the year. In Q3-2021 metallurgical
testing will move to variability testing of the first 5-7 years of
production, including tailing characteristics for dry stack
(tailings). Site layout will be confirmed, and geotechnical and
groundwater work will commence on identified areas (i.e. plant,
tailings, waste rock storage facility). The Company is also
interviewing potential ‘owner’s engineer’ service providers to
assist with the management of the feasibility study.
- Geological work
has commenced on evaluating the full extent of exploration
potential at the Buckreef Project. Analysis of Inferred Mineral
Resources, Exploration Targets, advanced exploration and grassroots
exploration through to conceptual targets are being evaluated. The
Company will provide further updates on its exploration targets,
Buckreef West and deep exploration results in the future.
- The Company will
undergo a full review of its exploration portfolio and strategy to
meet core strategic objectives. The Buckreef Project licenses cover
highly prospective ground with many geochemical and soil anomalies.
Further, the geological terrane is the Lake Victoria Archean
greenstone belt, where numerous anomalous gold bearing shear zones
have been identified.
- TanGold is also
updating its marketing plan and is in the process of revising its
website and marketing materials. The Company will continue to
assess talent across the organization and make further additions
and changes as deemed necessary.
About
Tanzanian Gold
Corporation
Tanzanian Gold Corporation along with its joint
venture partner, STAMICO is building a significant gold project at
Buckreef in Tanzania that is based on an expanded Mineral Resource
base and the treatment of its mineable Mineral Reserves in two
standalone plants. Measured Mineral Resource now stands at 19.98MT
at 1.99g/t gold containing 1,281,161 ounces of gold and Indicated
Mineral Resource now stand at 15.89MT at 1.48g/t gold containing
755,119 ounces of gold for a combined tonnage of 35.88MT at 1.77g/t
gold containing 2,036,280 ounces of gold. The Buckreef Project also
contains an Inferred Mineral Resource of 17.8MT at 1.11g/t gold for
contained gold of 635,540 ounces of gold. The Company is actively
investigating and assessing multiple exploration targets on its
property. Please refer to the Company’s Updated Mineral Resources
Estimate for Buckreef Gold Project, dated May 15, 2020, for more
information.
Tanzanian Gold Corporation is advancing on three
value-creation tracks:
- Strengthening its balance sheet by
expanding near-term production to 15,000 - 20,000 oz. of gold per
year from the processing of oxide material from an expanded oxide
plant.
- Advancing the
Final Feasibility Study for a stand-alone sulphide treating plant
that is substantially larger than previously modelled and targeting
significant annual gold production.
- Continuing with
a drilling program to further test the potential of its property,
Exploration Targets and Mineral Resource base by: (i) identifying
new prospects; (ii) drilling new oxide/sulphide targets; (iii)
infill drilling to upgrade Mineral Resources currently in the
Inferred category; and (iv) a step-out drilling program in the
Northeast Extension.
Andrew M. Cheatle, P.Geo. is the Company’s
Qualified Person as defined by the NI 43-101 who has verified the
data disclosed in this news release and has otherwise reviewed and
assumes responsibility for the technical content of this press
release.
The information contained herein summarizes details
reported in the interim financial statements of the Company for the
period ended February 28, 2021, and management’s discussion and
analysis thereof. Interested parties are encouraged to review those
filings in their entirety by visiting the Company’s profile at
www.sedar.com.
For further information, please contact Michael
Martin, Investor Relations, m.martin@tangoldcorp.com, 860-248-0999,
or visit the Company website at www.tangoldcorp.com
The Toronto Stock Exchange and NYSE American
have not reviewed and do not accept responsibility for the adequacy
or accuracy of this release.
U.S. Investors are urged to consider closely the
disclosure in our SEC filings. You can review and obtain copies of
these filings from the SEC's website at
http://www.sec.gov/edgar.shtml.
Forward-Looking
StatementsThis press release contains certain
forward-looking statements as defined in the applicable securities
laws. All statements, other than statements of historical facts,
are forward-looking statements. Forward-looking statements are
frequently, but not always, identified by words such as “expects”,
“anticipates”, “believes”, “hopes”, “intends”, “estimated”,
“potential”, “possible” and similar expressions, or statements that
events, conditions or results “will”, “may”, “could” or “should”
occur or be achieved. Forward-looking statements relate to future
events or future performance and reflect TanGold management’s
expectations or beliefs regarding future events and include, but
are not limited to, statements with respect to the estimation of
mineral reserves and resources, recoveries, subsequent project
testing, success and viability of mining operations, the timing and
amount of estimated future production, and capital expenditure.
Although TanGold believes the expectations
expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance. The actual achievements of TanGold or other
future events or conditions may differ materially from those
reflected in the forward-looking statements due to a variety of
risks, uncertainties and other factors. These risks, uncertainties
and factors include general business, legal, economic, competitive,
political, regulatory and social uncertainties; actual results of
exploration activities and economic evaluations; fluctuations in
currency exchange rates; changes in costs; future prices of gold
and other minerals; mining method, production profile and mine
plan; delays in exploration, development and construction
activities; changes in government legislation and regulation; the
ability to obtain financing on acceptable terms and in a timely
manner or at all; contests over title to properties; employee
relations and shortages of skilled personnel and contractors; the
speculative nature of, and the risks involved in, the exploration,
development and mining business. These risks are set forth under
Item 3.D in TanGold’s Form 20-F for the year ended August 31, 2020,
as amended, as filed with the SEC.
The information contained in this press release
is as of the date of the press release and TanGold assumes not duty
to update such information.
Note to
U.S. Investors
US investors are advised that the mineral
resource and mineral reserve estimated disclosed in this press
release have been calculated pursuant to Canadian standards which
use terminology consistent with the requirements CRIRSCO reporting
standards. For its fiscal year ending August 31, 2021, and
thereafter, the Company will follow new SEC regulations which uses
a CRIRSCO based template for mineral resources and mineral
reserves, that includes definitions for inferred, indicated, and
measured mineral resources.
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