African #Gold #Mining Landscape Posturing for
Changing Future; Players in the Game (CSE: $ZBR.C) (OTC: $ZNZBF) (NYSE: $GOLD)
(TSX: $ABX.TO) (NYSE: $AU) (NYSE: $TRX)
Point Roberts WA,
Delta BC – May 30, 2019 - Investorideas.com, a global investor
news source covering mining stocks releases a snapshot looking at the recent
developments in the African Gold mining sector, specifically in Tanzania.
In Tanzania, revenues from the country's
mineral resources are on the rise, thanks to
government efforts to curb smuggling and strengthen the Mining Commission's
capacity.
The March 2017 government’s decision to ban
the export of mineral concentrates has led to increased mineral production and
exports, and by March this year, the country had earned nearly $244 billion
from minerals, representing 78.63 percent of the year's $310 billion collection
target.
Minerals Minister, Doto Biteko, tabling the
ministry's budget estimates for the 2019/2020 fiscal year, told the National
Assembly that out of the collected amount, $223.5 billion, which is 72 percent
of total collections, was from royalties and inspection fees.
The remaining 20.5 billion, he said, was from
other sources of revenues, including annual fee and geological survey fees.
Minister Biteko assured that by the end of this fiscal year on June 30, the
ministry will meet the collection target.
Zanzibar Gold Inc. (CSE: ZBR) (OTC: ZNZBF), a junior mineral exploration
company, that engages in the acquisition, exploration and development of
natural resource properties in Canada and Tanzania recently reported that its consultants
have initiated their exploration evaluation of the Mkuvia Gold Property in the
Nachengwea area of southern Tanzania.
The Mkuvia property
has had small scale local placer operators mining gold from the property since
2005. In 2009, a 43-101 Compliant Reserve report was calculated on the central
portion of the main gold producing area which outlined an inferred reserve 6
million grams of gold.
The initial
assessment is to determine that the identified reserve is intact, and the
purity of the gold being recovered. A field visit to the property and the
collection of the alluvial gold for analysis is being completed by the report’s
original author.
“This work will
determine how much of a gold bullion inventory can be established for the
company by a low cost placer operation,” Company President S.A. Farrage
outlined, “As well as enabling the company to evaluate other gold prospects in
the region.”
Tanzania has moved
from an insignificant gold producing country in the last century to a 50 tonne
per year producer in the early part of the 21st century with AngloGold
Ashanti’s Geita Gold mine (7 million ounces produced since 2000 with reserves
estimated at 7.7 million ounces) and Acacia’s (Barrick gold) Buylanhulu
(initial reserves 17 million ounces) as the forefront operations.
Tanzania as a country seems well aware of the
increased gold mining interest and has begun picking and choosing its partners
having recently announced it will no longer
allow Acacia Mining Plc to manage its mines in the country and will only work
with the company’s parent, Barrick Gold
Corp. (NYSE:GOLD) (TSX:ABX), to resolve a
two-year impasse that has stymied operations.
“We will no longer work with Acacia,” Hassan
Abbasi said Tuesday by phone. “Under no circumstances can Acacia be a party to
the agreements, or have any role in the operation or management of the Barrick
mining subsidiaries in Tanzania. The ball is now in Barrick’s court.”
Acacia has been at odds with Tanzania’s
government since July 2017, when the state handed the London-listed gold
producer a $190 billion tax bill, saying it under-declared bullion exports.
Barrick has since led discussions with the government and, in an effort to
solve the impasse, surprised the market last week with an informal plan to buy
out Acacia’s minority shareholders.
Abbasi said the government of Tanzania will
continue to try to resolve the dispute based on a previous tentative agreement
with Barrick.
“The initial agreement that we reached with
Barrick in October 2017 is the one that is guiding the negotiations,” Abbasi
said.
In a 2017 meeting between Tanzania’s President,
John Magufuli and Barrick Executive Chairman John Thornton, it was tentatively
agreed that Acacia would pay $300 million to the government to settle tax
claims and would split future returns from operations with the country. At the
time, Acacia criticized the move and blamed Barrick for its worsening
relationship with Tanzania after Thornton took over negotiations.
Last week, Barrick said the government of
Tanzania had made clear it won’t negotiate a settlement with Acacia. Barrick
Chief Executive Officer Mark Bristow has repeatedly spoken about the breakdown
of the relationship between the two companies, and between Acacia and the
government.
President Magufuli has vowed to secure more
revenue from the country’s resources. His government is targeting boosting
income from minerals by half in the 2019-20 fiscal year to 470.9 billion
shillings ($205.1 million), according to the Mines Ministry.
While some are looking at new prospects in
African Gold mining, others like AngloGold
Ashanti (NYSE: AU) recently announced that it was
embarking on a process to review divestment options for its remaining South
African assets. This process will consider all ownership options, with a view
to maximizing the value and future prospects of these assets. This is in line
with AngloGold Ashanti’s ongoing review of its portfolio and a disciplined
approach to allocation of capital and other resources to ensure it generates
maximum value for all its stakeholders.
AngloGold Ashanti has dedicated significant
time and resources over the past few years to restructure its South African
operating portfolio into a more focused business with enhanced operating and
financial metrics. The successful completion of the restructuring has resulted
in this portfolio comprising a single underground mine, Mponeng, a surface rock
dump processing business and a mine waste retreatment operation, Mine Waste
Solutions. These assets are now better positioned for the future, with the potential
for further enhanced production growth, profitability and free cash generation
from the significant remaining ore reserve base of 16.8 million ounces.
Mponeng is ramping up production from the
Below 120 Level project, which is expected to give it a lifespan of around
eight years, with improved margins from anticipated higher grades within this
new mine area. In the medium term (starting in around two years), Mponeng will
require additional capital investment to further extend its life and to realize
the full potential of this operation.
“We believe that under the right ownership,
our South African assets offer a compelling long term value proposition that
may allow for an extension to Mponeng Mine’s current life,” Chief Executive
Officer Kelvin Dushnisky said. “The investment to extend Mponeng’s life beyond
eight years has very strong competition for capital and other scarce resources
from a host of other projects in our portfolio, which at current planning
assumptions are more attractive, generating higher returns and quicker payback
periods - we have therefore decided to review divestment options for our South
African business.”
This process is at an early stage and may not
ultimately result in any change to the ownership of the South African business.
AngloGold Ashanti’s priority is to ensure that the process is conducted with
the appropriate thoroughness to ensure the best possible outcome for all
stakeholders.
Tanzanian Gold
Corporation (TSX: TNX) (NYSE:TRX) announced the first set of
assay results from its deep level diamond core drilling program at the Buckreef
Project, aimed at better defining potential mineralized zones below the open
pit as reported and published in the June 2018 Pre-Feasibility 43-101 Technical
Report. Infill drilling within the open pit is continuing, highlights from
which will also be announced.
Assay results for a third mineralized zone at
depths below 450m are expected soon from the assay lab. The drill-hole was
drilled to a depth of 555 meters, one (1) meter is equal to 3.2808 feet for a
total depth of 1,820 feet, all diamond core.
Mr. Jim Sinclair, Chairman (TRX) commented,
“We are pleased with the first results from our deeper drilling below the open
pit using core drilling to better define more robust mineralized zones that may
extend below the pit bottom." Mr. Sinclair also noted, "Our in-fill
drilling program in the open pit area has passed the mid-point of planned
drilling, and, I believe, that the results will help move Inferred Resources into
the Measured and Indicated categories."
A recent CNBC article discussed how gold
has had some of its best
days in nearly three months, due to market turmoil triggered by China
announcing that it will retaliate over levies imposed by the Trump
administration.
This
rise in gold stocks, as well as new government regulations in the African
mining community could bring renewed interest into the region, and the
companies already looking for new opportunities in growing production regions
like Tanzania may benefit from this recent gold surge.
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