Tembo Gold Corp. holds a portfolio of prospecting licences and licence applications for gold in the Archean
greenstone belts of Tanzania. This region of Tanzania is one of Africa’s most prolific gold camps and is host to a number of world class gold mining operations, including African Barrick’s (LON:ABG) Bulyanhulu Mine.
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Introduction
Tembo Gold Corp. is a Canada-based company focusing on development of prime gold exploration targets in Africa.
The company holds a portfolio of prospecting licences and licence applications for gold in the Archean
greenstone belts of Tanzania. This region of Tanzania is one of Africa’s most prolific gold camps and is host to a number of world class gold mining operations, including African Barrick’s (LON:ABG) Bulyanhulu Mine.
The Tembo Project
Tembo currently holds 125 square kilometers of licensed areas in the Lake Victoria mine camp, Tanzania, on strike with African Barrick’s Bulyanhulu mine, which produces 270.000 ounces of gold per annum at a cash cost of $700/oz.
Tembo’s licenses were previously owned by Lakota Resources, a junior exploration company that filed for bankruptcy because of mismanagement in the aftermath the 2008 Global Financial Crisis.
The Tembo project is one of the most obvious Nearology-Games in the world, as drilling has proven that Bulyanhulu’s mineralized veins extend onto Tembo’s land holdings.
Tembo’s Exploration Results in 2012
Earlier this year, Tembo started a 90,000-meter drill program to test how far the Bulyanhulu veins extend onto their ground. Over 60,000 meter has been completed now, and the received assay results are extremely encouraging. The latest batch of results included 3m of in excess of 27g/t at the Nyakagwe East zone.
The company expects to complete its 2012 drill program by the end of this year, which should lead to a resource calculation in Q1-Q2 2013. Although the management team is reluctant to express its expectations for this resource estimate, we are aiming for in excess of 2 million ounces of gold in the 2013 resource estimate. An NI43 compliant resource estimate should put them on several other companies’ radar screens, as it doesn’t happen very often that high-grade vein systems are found in decent mining countries.
Conclusion
We’ve met CEO David Scott and VP Corporate Development Marc Cernovitch several times now, and are convinced they are capable people who definitely can move the project and the company forward.
The main risk involved with Tembo is the financing risk. The company is raising C$4M at a price of 50 cents a share, but will probably have to return to the markets later this winter (and we hope they’ll be able to raise more money at higher prices than today’s share price).
Although the current share price is very disappointing, the exploration results from the Phase I drill results have been very encouraging, and warrant further exploration efforts and drilling. We are looking forward to their maiden resource estimate next year, and we strongly believe Tembo has its hands on Tanzania’s next multi-million ounce deposit.
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Disclosure: The author visited Tembo Gold’s project in Tanzania in February 2012, and all of his costs have been reimbursed by the company. Tembo Gold Corp. is a sponsoring company. Please see our disclaimer for current positions.
