Tanzanian Royalty Positive Buckreef Preliminary Economic Assessment Pre-Tax NPV US$392 Million, Post-Tax IRR 48%
The Company is pleased to announce the results of a Preliminary Economic
Assessment ('PEA?) for the Buckreef Project located in the Mwanza
Provincial District, Tanzania. The results of the PEA are contained in a
Technical Memorandum prepared by Venmyn Independent Projects which has
reviewed and approved the contents of this press release. The Company
plans to file a National Instrument 43-101 compliant Independent
Technical Report on the PEA results within 45 days. The Board of
Directors has approved the PEA and has directed management to proceed to
a pre-feasibility study. All references herein to '$? are United States
dollars.
Highlights:
The Buckreef Project has Measured and Indicated Resources of 44.2
million tonnes at a grade of 1.23g/t gold (at a 0.5g/t gold cut-off
grade) that contain 1.74 million ounces of gold and the main shear
hosted gold deposit is open along strike and down dip. The PEA is based
on a mining schedule to produce at least 100,000 oz of gold per year;
initially from plant feed of 1.8 million tonnes per year which increases
in year six to a plant feed of to 3.6 million tonnes per year. Over the
estimated 12 year production life the Buckreef Project produces 1.35
million ounces of recovered gold.
The five deposits consist of upper, weathered, oxidized zone overlying
variable transition zones and lower, primary, fresh sulphide zone at
depth. The mineralization is free milling with direct leach recoveries
in the lower 90% range and is amenable to gravity recovery.
The mine designs consist of a number of conventional open pits, the
largest of which is 1.8 km in length and extends to a depth of 210
metres below surface. Mining consists of excavator loading of run of
mine material ('RoM?) and waste, and Articulated Dump Truck hauling via
planned access ramps. The possible pit deepening and/or underground
extensions of the mine design have not been included in the PEA. The
initial capital cost of the mining equipment is $61.5 million.
RoM will be processed at conventional carbon-in-leach, modular plants.
Initially 150,000 tonnes per month of RoM is crushed, screened and ball
milled; and later on 360,000 tonnes per month of ROM is crushed and SAG
milled. The downstream circuit includes gravity concentration, intensive
cyanidation and carbon in leach. The life of mine weighted average total
operating cost is estimated to be in the range of $750 per ounce (before
royalty and taxes). The initial capital cost for the plant is $133.9
million.
The total initial capital cost is $ 238.3 million. The Net Present Value
('NPV?) is based on a gold price of $1,600 per ounce and a US$:South
African Rand exchange of 8.0. The NPV on a pre-tax basis at a 5%
discount rate is $392 million; and at a discount rate of 10% it is $268
million. The NPV on an after tax basis at a discount rate of 5% is 288
million; and at a discount rate of 10% it is $196 million. The most
sensitive cost parameter is the plant operating cost, which is most
affected by the cost of power. All costs used in the PEA were based
either on quotes obtained from suppliers or benchmarking against current
similar African operations.
A high level environmental and sensitivity review for purposes of the
PEA has not identified any unusual potential remediation measures or
fatal flaws.
According to Joseph K Kahama, Chairman and Chief Operating Officer
(Tanzania), 'The PEA provides a development framework that we believe
will be greatly enhanced by our recent exploration successes at
Buckreef, results from which remain to be included in the PEA. Based on
our exploration work to date, we see considerable growth potential on
the resource side, strong potential for improved grades and thicknesses
at depth, and the possibility of an underground mining operation to
compliment surface operations.'
Mineral deposits that are not mineral reserves do not have demonstrated
economic viability.
Qualified Persons
Venmyn Independent Projects (Pty) Limited was appointed by Tanzanian
Royalty to independently co-ordinate a group of specialist consultants
conducting the PEA, to independently review the study results and to
compile the 43-101 compliant Independent Technical Report on the PEA.
Specialist consultants contributing to the PEA are African
Geo-Environmental Services (Pty) Limited, EnviroSim Consulting (Pty)
Limited, Epoch Resources (Pty) Limited, Sound Mining Solution (Pty)
Limited and K′Enyuka (Pty) Limited. The Qualified Persons are F. Harper
B.Sc Hons (Geol), Pr Sci Nat; MGSSA and A.N.Clay M.Sc (Geol), M.Sc (Min.
Eng), Dip.Bus.M, Pr Sci Nat, MSAIMM, FAusIMM, FGSSA, IOD, SPE, CIMMP,
MPMI, both are full-time employees of Venmyn Projects.
Respectfully Submitted,
Joseph Kahama
Chairman and Chief Operating Officer (Tanzania)
For further information, please contact Investor Relations at
1-800-811-3855
Visit our website: www.TanzanianRoyalty.com
The Toronto Stock Exchange and NYSE Amex Equities have not reviewed and
do not accept responsibility for the adequacy or accuracy of this release
Cautionary Note to U.S. Investors - The United States Securities and
Exchange Commission limits disclosure for U.S. reporting purposes to
mineral deposits that a company can economically and legally extract or
produce. We use certain terms on this news release, such as 'reserves?,
'resources?, 'geologic resources?, 'proven?, 'probable?, 'measured',
'indicated', or 'inferred' which may not be consistent with the reserve
definitions established by the SEC.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
This news release contains certain forward-looking statements and
forward-looking information. All statements, other than statements of
historical fact, included herein are forward-looking statements and
forward-looking information that involve various risks and
uncertainties. There can be no assurance that such statements will prove
to be accurate, and actual results and future events could differ
materially from those anticipated in such statements. Important factors
that could cause actual results to differ materially from the Company's
expectations are disclosed in the Company's documents filed from
time-to-time with the British Columbia, Alberta and Ontario provincial
securities regulatory authorities.
Certain information presented in this release may constitute
'forward-looking statements? within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on numerous assumptions, and involve known and
unknown risks, uncertainties and other factors, including risks inherent
in mineral exploration and development, which may cause the actual
results, performance, or achievements of the Company to be materially
different from any projected future results, performance, or
achievements expressed or implied by such forward-looking statements.
Investors are referred to our description of the risk factors affecting
the Company, as contained in our SEC filings, including our annual
report on Form 20-F and Registration Statement on Form F-10, as amended,
for more information concerning these risks, uncertainties, and other
factors.
Tanzanian Royalty Exploration
David Duval, 1-800-811-3855
