January 24, 2023

Tembo Gold (CVE:TEM) CEO Reveals New Gold Discovery in Tanzania

Midas Letter
Midas Letter
Tembo Gold (CVE:TEM) CEO Reveals New Gold Discovery in Tanzania
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Tembo Gold Corp (CVE:TEM, OTCKMTS:TBGPF, FRA:T23A), a mining company in Tanzania, has made a significant new discovery at their Tembo Project.

The new artisanal working, known as Mwasabuka, is located along strike of the neighboring Bulyanhulu Mine, which is operated by Barrick Gold Corp (NYSE:GOLD, TSE:ABX). This is an entirely new location for artisanal activity and grab samples from the site have returned excellent grades averaging 11.21 g/t gold. The excavations consist of a series of vertical, hand-excavated shafts along a linear zone approximately 200m in strike. The zone being mined at Mwasabuka corresponds closely to two Priority 1 target locations identified during the Goldspot study announced on June 1, 2021 with further sampling continuing.

CEO David Scott also discusses Tanzania’s improved infrastructure, new costs of drilling in relation to inflation, and attending PDAC mining conference in March.

The discovery at Mwasabuka is a promising development for Tembo Gold and the mining industry in Tanzania. It highlights the potential for further discoveries in the area and the importance of continued exploration and development in the region.

Company Bio:

Tembo Gold has a 100% interest in the Tembo Gold Project which has over forty thousand meters of drilling and is located adjacent to Barrick’s 20Moz Bulyanhulu Mine in Tanzania’s prolific Lake Victoria Goldfield. Tembo recently completed a transaction with Barrick (who now owns approximately five percent of Tembo), whereby Tembo sold six of its non-core licenses to Barrick for $6mm USD, and Barrick is committed to spending $9mm USD over the first four years. Additionally, Tembo will receive contingent payments of up-to $45mm USD on the first five million ounces discovered by Barrick. The company has assembled a highly experienced team with a track record of developing, financing, and operating mining projects in Africa. Tembo is focused on the discovery and development of world-class gold projects in Africa as well as seeking additional opportunities that can bring value to the company and shareholders.

Links & Resources:

Timestamps:

00:00 Tembo CEO David Scott

00:47 New Gold Discovery

01:31 Continuation of Barrick Structure?

02:09 Exploration Plan

02:58 Plans at other sites

03:56 Barrick Drilling

04:28 Barrick Development investment for 2023

05:02 Cost of Drilling

05:40 Tanzania Infrastructure

07:19 Other Foreign Companies in Tanzania

07:59 Tanzania Barriers to Entry

08:41  African Mining Indaba & PDAC

Transcript

James West, Midas Letter CEO: I’m joined now by David Scott. He’s the CEO of Tembo Gold Court trading on the TSX Venture under the symbol TEM and in the United States under the symbol TBGPF. David, welcome back.

David Scott, Tembo Gold CEO: Thank you James. good to be chatting to you again in this new year.

James West: Yes, you bet. And in this new year, David, it’s, you recently put out some news that you’ve made a new discovery in Tanzania. Can you tell us about that, please?

David Scott: Yeah, basically what’s happened is that an artisanal working has started up on the, northwestern extent of the Buly structures. As you know, Buly consists of a number of Northwestern trending structures, and one of those  has now sprung up to be an artisanal working on our side of the boundary. The guys are pretty busy there. There’s, I think there’s at least 15 to 20 active shafts and the guys are getting down to 10, 15, 20 meters already.

James West: Well, that’s fantastic. And so what kind of so this is this, is this a continuation of the structure then that is on the Barrick property next door, or is it something new altogether?

David Scott: I’m almost certain that it’ll be a structure that does exist on the Buly side. Obviously it hasn’t been mined by them because we now, we, we are three kilometers away from their shaft. But, you know, there’s a number of structures that make up the Buly zone all Northwest trending Reef to Reef One and Reef Zero, and I’m sure there must be others as well. And this is one of those, and it’s mineralized on our side of the boundary. And it, it basically set almost in the middle in that cluster of structures.

James West: Okay. And so what is the sort of plan to expand upon that discovery at this point? What can we expect in terms of drilling and further exploration?

David Scott: Yeah, so we’ve obviously gotta prioritize what’s most important in our work program. As you know, we’ve been drilling to define the structure around our known targets where we’ve had good results and, and that remains a priority now to, to start developing results on those. This one definitely has to be drilled at at some stage and sooner rather than later. Particularly because it’s on the Buly trend itself, obviously got a little bit of a excitement about it. And I think we need to put two or three holes in there just to test it out.

James West: And so what is happening generally in terms of the expanded exploration program on all of the Tembo ground, as well as how is that meshing with what’s going on in the Barrett ground next door?

David Scott: So, we are waiting now for the second quarterly report to come from Barrick. They are busy on the ground. I believe they, if they haven’t started drilling already, they will be sorting fairly shortly and doing some ground geophysics. The recent announcements that they’ve made and, and presentations that they’ve given they’ve interpreted structures that come through off the Buly trend up into our ground and they, they’ve swung them north and end up into the ground that they purchased from us. So, obviously they still targeting this, the Buly trend as such  as well as looking at other targets on their ground. I’m hoping to get their quarterly report shortly and, and we’ll hear more about what they’re up to.

James West: Sure, so then is it the expectation on Barrick’s part that they’re going to start drilling the land that they acquired from Tembo?

David Scott: Yeah, I think they must and obviously they will  aside from the obligation that they have contractually, you know, the ground is great ground and I’m pretty sure by now they’ve started to define some good targets. So I’d expect drilling to be underway fairly shortly.

James West: Sure. And how much has Barack invested in their development program for 2023, or how much have they earmarked for that, do you know?

David Scott: I don’t have a number. I do know that their total commitment to us for the four years is, is the 9 million.  And it goes up in a sliding scale, which is pretty normal. You know, your early reconnaissance work doesn’t cost a lot, and then you build up and once you start drilling, of course, it burns through cash really quickly.

James West: Sure. So in the context inflation has driven the costs of everything up everywhere in the world. Has the cost of drilling in Tanzania increased?

David Scott: No, so far, you know, the quotes that we received when we did our tendering for the phase of drilling written at the moment the pricing hadn’t yet been affected by the current rising prices of other things.  I expect they, when we do tender again, they will have gone up.  But I’m not aware of that yet.

James West: And tell me, in terms of the infrastructure for developing a full on producing mine, is that power roads, water, et cetera, available to where you are in Tanzania?

David Scott: Yeah, there’s been a great improvement over the years. You know, when we ran in the power line to Bulyanhulu, it was an 85 kilometer line, which came in from the east. It was the first power enter the area. Now there’s major power lines running  across the country distributing through smaller power lines to the villages. And we now have a power line running right past our camp. And  there’s a big power line running right across in Hulu one, in fact. And so when the time comes, there’ll be power available the main road which comes down from Geita, where Geita Gold Mine is located, that road still needs to be had a hot surface put on it. It’s still an old dirt road. And  it’s about time because it’s a major  arterial road between  some major regions and also in the country. Those have all been tiled really, so I think pretty soon we’ll see that one being made into a tar road. But the roads are good, you know, they’re well maintained and from Mwanza, which is the nearest international airport and sort of the hub of this area from there to Geita is . And interestingly, there’s a bridge being built across near Lake Victoria and I’ve mentioned that before. And that’ll shorten the road trip from Mwanza to site as well.

James West: Has Tembo success in the region caused an uptick in interest in  by other companies coming to Tanzania looking for gold and silver?

David Scott: Still, I believe we’re still the only foreign company exploring in the Lake Victoria Goldfield. I believe there may be one or two small ones in the Lupa Goldfield. I think there’s a Russian group that are busy down there.   I think it’s just a matter of time and, and we’ll see companies coming back into Lake Victoria, which is about time, you know, there used to be in the mid and late nineties, there used to be up to 15 small juniors active in the Goldfield. And, and that’s it. Still very quiet.

James West: So then, is it the case that the barriers to entry for new companies to acquire ground in Tanzania get permitted? Is that part of the reason there’s such a dearth of exploration?

David Scott: You know, when the legislation changed, obviously the prospects of investing in Tanzania plummeted quite severely, very rapidly as they do. You know, bad news has a very rapid effect to build back confidence for the investors, you know, for the juniors to come back takes a bit of time. I think it’ll come, but it will take time.

James West: Sure. And  is Tembo planning to exhibit at all at the PDAC convention in Toronto this upcoming spring?

David Scott: Yep, we’ll be there. We’re gonna be quite busy actually the next two months. We’ll be at theAfrican Mining Indaba in Cape Town at the Parallel investor meetings function, which is one to one. So we’ll be there at one to one meeting investors. We have two days almost full of  half hourly meetings with people, potential investors. So that’ll be good. And we’ll probably pop into on one of the days just to see what’s happening down there. And then we’ll be at PDAC, we will have a booth at PDAC and I expect to see Marc, Simon and I there manning the booth and talking to anybody who’s wanting to hear the story.

James West: Great, we’ll look forward to seeing you then.  We’re gonna leave it there for now, David, we’ll come back to you in due course. Thanks very much for your time today.

David Scott: Thanks James. Stay well. Enjoy 23.

James West: I will. You too.

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