The veins are presently being exploited by artisinal miners to depths reaching about 30 m vertical. In addition, gold is being extracted from the base of the overlying lateritic alluvium (paleo-placer) that is 1-2 m thick.

The quartz veins are tension gashes trending 025-045° and dipping ~25°NW. A sericitic alteration envelope may carry significant grades giving gold-bearing drill intersections up to 5-6 m. Host rock is the western granodiorite, within 60-100 m of the granite-greenstone contact, in a zone of sub vertical reverse-dextral shearing.

Artisinal exploration pits at 443 720E / 9627 630N:

Quartz rubbles / rejects (grab sample results up to 1.27g/t Au) found at this location on the Lunguya license have been extracted from exploration pits excavated by artisinal prospectors. Orientation of the veinlets may be 175°, based on alignment of the pits and shafts (maximum depth estimated to be ~20 m).

The host rock seen in the rubbles corresponds to a) massive very fine-grained hematitic saprolite that is interpreted to be weathered metabasalt and b) very fine-grained sheared sericitic limonitic saprolite that is interpreted to be alteration related to the vein selvages.

Artisinal exploration pits at 441 130E / 9625 490N:

Quartz rubbles / rejects (grab sample results up to 3.97 g/t Au) found at this location on the Lunguya license have been extracted from two exploration pits excavated by artisinal prospectors. Orientation of the veinlets may be 090°, based on alignment of the pits.

The host rock seen in the rubbles corresponds to sheared, sericite altered granite / granodiorite saprolite with limonite / hematite staining. Regional mapping suggests this showing has similarities to Nyamakwenge as it is situated very close to the major granite-greenstone contact.

Nyikoboko:

The Nyikoboko reef is located near the northern boundary of the Shilela license. One principal quartz vein, generally <2 m in thickness, has returned high-grade values from grab sampling (up to 8.40 g/t Au) Drill intersections (along a 100 m strike length) include:

The showing has since been abandoned by the artisinal miners who sank shafts to depths reaching a maximum of about 30 m vertical. In addition to mining the quartz reef, it appears that some gold was extracted from the overlying lateritic colluvium that is 0 to 3 m thick.

The quartz vein is hosted in a thin shear in feldspar-porphyritic granodiorite / diorite trending N-S° and dipping ~80°W.

Shilela (on Lunguya West license):

Abandoned workings stretching along 50 m and trending 100° have been located in the southeast corner of Lunguya West license. Nine of 14 grab samples (mainly quartz vein rubbles / rejects) gave results >1 g/t Au to a maximum of 8.40 g/t Au.

The veins are hosted in granite / granodiorite that locally shows a weak to moderate shear fabric and weak to moderate sericite alteration. It has been suggested, based on pit location and distribution, that the mineralization may have a northerly dip.


Exploration Completed :

• Aeromagnetic survey (March 2000) was flown over the property by Geodass of South Africa. A flight line spacing of 250 m flown along N-S lines was used.
• Mini-BLEG soil sampling (February 2003). A total of 564 samples were collected over the property with areas of mbuga cover not sampled. Results from the mini BLEG analysis are encouraging. The 95 percentile, which represents the background/anomaly position on the cumulative frequency curve for the data, is 3 ppb Au. There are 33 anomalous values (≥3 ppb Au) with the highest value being 7 ppb Au.
• Hand-auger sampling (June 2003) was undertaken to validate the BLEG soil anomalies. A total of 267 samples were collected. The cumulative frequency curve placed the 95 percentile (background cut off) at 4 ppb Au. There are 33 anomalous values (≥4 ppb Au) with the highest value being 17 ppb Au. Auger anomalies tied up well with those defined by BLEG in soil sampling, which follow an ESE trend. This trend mimics a mineralized quartz reef.
• Rock chip sampling (June 2003). Of the 46 samples collected, thirteen samples returned anomalous values. Eleven separate Fe-rich quartz vein samples returned values of 4.68 g/t, 11.81 g/t, 1.67 g/t, 11.18 g/t, 0.84 g/t, 1.13 g/t, 0.230 g/t, 0.170 g/t, 6.91 g/t, 2.23 g/t, and 0.20 g/t Au, respectively. Two samples taken from sheared granite returned values of 0.21 g/t and 0.11 g/t Au. These 13 samples were collected from muck piles at the Shilela workings. The remaining samples returned assay results less than 100 ppb Au.
• Biogeochemical sampling (September 2004) completed for the entire license. An initial analysis has been completed.
• Conventional soil sampling (November 2002), on 400 m spaced, N-S trending lines. Areas covering mbuga were not sampled. The 95 percentile, which represents the background/anomaly position on the cumulative frequency curve for the data, is 6 ppb Au. There are 7 anomalous values, the highest being 26 ppb Au.
• Biogeochemical sampling (September 2004) completed for the entire license. An initial analysis has been completed.
• Geosurvey International GmBH (1979/1980) countrywide airborne geophysics.
• Diamond drilling (December 2002). A total of 3 short holes were drilled, SHDD01 (57 m), SHDD02 (54 m) and SHDD03 (44 m), yielded a maximum value of 0.29 g/t Au.
• Conventional soil sampling (November 2002), on 400 m spaced, N-S trending lines. Areas covering mbuga were not sampled. A total of 256 samples were collected over the property. The 88 percentile, which represents the background/anomaly position on the cumulative frequency curve for the data, is 8 ppb Au.
• Rock chip sampling (November 2002). Whilst some 19 samples of regolith and laterite collected from old artisinal pits, yielded insignificant gold values. A suite of quartz rubble samples occurring in laterite reported values: 0.83 g/t, 1.17 g/t, 0.71 g/t, 0.91 g/t, 0.33 g/t, 0.20 g/t and 0.18 g/t Au.
• Follow-up conventional soil sampling (January 2003). A total of 1 196 samples were collected from holes dug or augered to a depth of 1m (the length of the auger) or the top of the laterite duricrust. Sample spacing was 100 m along 200 m spaced N-S trending lines. Two large soil geochem anomalies were identified with a peak value of 24.7 ppb Au.
• Biogeochemical sampling (September 2004) completed for the entire license. An initial analysis has been completed.
• Aeromagnetic survey was flown over the property by Geodass of South Africa (March 2000), using N-S trending flight lines, with a line spacing of 250 m.
• Mini-BLEG soil sampling program (February 2004). A total of 80 samples were collected, and areas of mbuga cover were not sampled. The 71 percentile, which represents the background/anomaly position on the cumulative frequency curve for the data, is 4 ppb Au. There are 12 anomalous values (≥5 ppb Au) with a peak value 8 ppb Au. The majority of the anomalies form two small clusters in the northern central and south central portions of the license. The remaining anomalous values form point anomalies along one line on the eastern boundary of the license area.
• Hand-auger sampling (March 2004).A total of 10 holes were drilled over anomalous areas defined by the BLEG sampling. Hand auger drilling shows that, the thickness of the mbuga soil is between 3.0 and 4.5 m whereby calcrete nodules starts to appear after the first meter and increases with depth. Between the mbuga/calcrete and saprolite, a layer of quartz rubbles were found to exist. The quartz layer was intersected in almost every hole drilled. However, the mbuga covered area within the license is underlain by medium to coarse grained granite which is between 3.0 and 4.5 m deep. Some 56% of the samples reported assays <0.01 ppm Au, with a peak value of 0.015 ppm Au.
• Ground follow-up of kimberlitic magnetic target (January 2004). Aeromagnetic interpretation identified a single kimberlite target (LG40DIA01). Ground mag follow-up on a 300 x 400 m grid over the target yielded a poor magnetic signature. Loam samples submitted for heavy mineral identification and sorting also returned negative results.
• Biogeochemical sampling (September 2004) completed for the entire license. An initial analysis has been completed.
• Aeromagnetic survey was flown over the property by Geodass of South Africa (March 2000), using N-S trending flight lines, with a line spacing of 250 m.
• Conventional soil sampling program (November 2002). Using 400 m spaced sample lines, a total of 286 samples were collected. The 91 percentile, which represents the background/anomaly position on the cumulative frequency curve for the data, is 5 ppb Au. There are 25 anomalous values with a peak value 13.6 ppb Au.
• Conventional soil sampling follow-up (January 2003) was carried out over anomalous areas defined by the previous survey, using a 100 x 200 m spaced sampling grid. A total of 184 samples were collected. A single anomaly (towards the N of the license) reported 95 percentile values of 12.5 ppb Au, with a high of 38.3 ppb Au. The anomaly is 2 km long, and bounded on both ends by the PL boundary. 5 samples of quartz vein float yielded the following significant values: 5.77, 9.89, 3.50, 5.08 and an impressive 302.50 g/t Au.
• Ground follow-up of kimberlitic magnetic target (January 2004). Aeromagnetic interpretation identified two kimberlite targets (LG21DIA01 and LG21DIA02). Ground mag follow-up yielded a poor magnetic signature over both targets. Loam samples submitted for heavy mineral identification and sorting also returned negative results.
• Biogeochemical sampling (September 2004) completed for the entire license. An initial analysis has been completed.
• Geosurvey International GmBH (1979/1980) countrywide airborne geophysics.
• Mini-BLEG soil sampling (June 2002). A total of 417 samples were collected, which provided encouraging results. The 91 percentile, which represents the background/anomaly position on the cumulative frequency curve for the data, is 7 ppb Au. A total of 37 low order anomalous values were reported, with the highest value being 7 ppb Au. The anomalies defined 3 NE trending features, one of which ties up with the Nyamakwenge reefs.
• Conventional soil sampling follow-up (July 2002), was carried out over the Nyamakwenge reefs. A total of 1 017 samples were collected. Results clearly identified an anomaly associated with the reefs, with sharp boundaries using a 50 ppb Au background threshold, and a peak value of 1 900 ppb Au. The anomaly is N trending, with a 400 m strike. RC drilling program (August 2002), undertaken on the Nyamakwenge reefs area. A total of 7 holes were drilled with a combined length of 535 m, and some 261 samples were submitted for analysis.
• Biogeochemical sampling (September 2004) completed for the entire license. An initial analysis has been completed.
  
  
  Geophysics :

• Geosurvey International GmBH (1979/1980) countrywide airborne geophysics.
• Geodass was contracted to fly an aeromagnetic and radiometric survey in 1999. This forms part of a larger survey which is at present not in the public domain.
• Ground magnetic survey on possible kimberlite targets.

  
  Discussion of Results and Exploration Potential:

  Several factors contribute to the company's strong belief that gold exploration potential of the Lunguya project area is high, including, in particular, the regional geologic context (for example, its location south of Bulyanhulu mine) and the presence of five documented gold showings. The principal negative factor may be the apparently weak absolute values of the near-surface soil geochemistry. So let's look first at the soil geochemistry.

  Soil Geochemistry:

  Without the benefit of artisinal workings, near-surface soil geochemistry at 400 x 400 m spacing would probably not have found Nyamakwenge (8 ppb Au), nor the two exploration pits on Lunguya license (7 ppb Au), nor the Shilela artisinal workings on Lunguya West (7 ppb Au). Arguably, the soil geochemistry would have found Nyikoboko (20 ppb Au).

  Nyikoboko outcrops. The vein shoots up through the lateritic colluvium at the north end of the area worked by artisinal miners. One might expect stronger soil results at closer spacing, but 20 ppb Au may be considered appropriate at 400 x 400 m, considering the size of the showing.

  Nyamakwenge is covered by lateritic alluvium. There are many case histories demonstrating the presence of gold-in-soil anomalies in lateritic colluvium, but lateritic alluvium can mask underlying gold mineralization. Paleo-placer gold occurs in alluvium, generally at the base of the profile. Near-surface soil results may therefore not reflect bedrock mineralization.

  At 441 130E / 9625 490N and Shilela (Lunguya West license), sampling has been performed on sandy granitic soils. Sandy soils may not be an ideal sampling medium as rainwater is able to effectively flush away any anomalous components.

  At 443 720E / 9627 630N, samples have been taken on a lateritic soil overlying ferricrete that in turn overlies lateritic colluvium. In this case, the ferricrete cap is capable of blocking upward migration of any geochemical gold that may be present in the colluvium. It is even possible that a second buried ferricrete horizon exists in the regolith profile.

  It is also noted that surface leaching of gold is reported at the Kukuluma and Matandani deposits at Geita mine. At Kukuluma, trenches excavated to maximum depths of 4.5 m were not mineralized (M. Skead, pers. comm. 2003). Less severe surface leaching is also reported at Golden Pride mine in the Nzega belt to the south (R. Stevens, pers. comm. 2003).

  It is therefore suggested that the regolith profile at Lunguya may require careful interpretation and that even very subtle gold response may signal presence of bedrock mineralization.

  Finally, it is noted that ~35% of the project area, and perhaps 65% of the metavolcanic package, was not soil sampled because of the mbuga cotton soil cover. Furthermore, the best soil geochemistry results occur at the northern and southern extremities of the project area in the central part of the metavolcanic package where there is no mbuga. We are prepared to suggest that it is possible to infer continuity between these two anomalous areas, across the mbuga domain. Biogeochemistry has been conducted over this mbuga and results are presently being analyzed.
  
  
  Geological Model(s)::

  • A Bulyanhulu model as the mine occurs approximately 15-30 km N along strike. EM or IP might be used to identify inter-flow argillite horizons in the mafic metavolcanics.
  • A Golden Horseshoe style of mineralization would be compatible with geological observations at the eastern side of the mbuga plain -- western contact of the granite in the northeast corner of the project area.
  • A Geita model may be just as appropriate if we can define an intersection between a major structure and a banded iron formation. Alternatively, we may only require a mafic intrusive (or metavolcanic ?) rock as is the host for mineralization at Nyankanga pit on the western extremity of the Geita trend.
  • A comparison with the styles of gold mineralization along the Cadillac-Larder fault in the Archean Abitibi sub province of Canada. Gold mineralization at Val d'Or, Malartic, Cadillac, Rouyn-Noranda, Virginiatown and Kirkland Lake is profoundly different yet has the same fundamental structural control.
  
  Future Activity:
  • Shallow RAB drill program on key auger-sampling anomalies, and to test biogeochem anomalies.
  • Shallow RAB drill program to test conventional soil-sampling and biogeochem anomalies.
  • Shallow RAB drill program to test conventional soil-sampling and biogeochem anomalies.
  • Shallow RAB drill program to test biogeochem anomalies.
  • Shallow RAB drill program to test conventional soil-sampling and biogeochem anomalies.
  • Follow-up RC drilling on the Nyamakwenge reefs, and a shallow RAB drill program on biogeochem targets.