TORONTO (miningweekly.com) – Tanzanian Royalty Exploration, which saw its stock plunge by more than one-third on Thursday, aims to produce around 100 000 oz/y of gold at its Buckreef project, starting from early 2014, CEO Jim Sinclair said on Friday.
He explained the share price’s dramatic fall to be a result of hedge fund Geier selling its stake on the open market “which scared the lights out of everyone”, adding that there was “nothing whatsoever” wrong at the company.
Speaking in a telephone interview, Sinclair said the fund owned Tanzania Royalty stock as its only investment, which it liquidated on Thursday, adding that there had been troubles between the junior and what was its largest shareholder.
“Our relationship with them was not terribly pleasant from day one,” he commented.
According to Bloomberg, Geier sold around half of its stake in Tanzania Royalty to reduce its position to around 4.9%.
The company in October announced it had cut a deal with Tanzania’s State-owned mining firm, giving the country a 45% stake in the Buckreef project, which sits about 35 km south-west of AngloGold Ashanti’s Geita mine.
The agreement would remove delays Tanzania Royalty had experienced in getting permits and licences for the asset.
Johannesburg-based Venmyn is carrying out a preliminary economic assessment on the mine, which Iamgold once owned, and Sinclair said the results would be released imminently, after which a definitive feasibility study would begin.
Assuming successful outcomes, Tanzania Royalty was aiming for full commercial production of around 100 000 oz/y in 30 months time.
Sinclair said that the company ultimately wanted to expand the mine to a size similar to Geita, which produced 357 000 oz of gold last year.
“It’s the same geology, and they’re right next to us,” he told Mining Weekly Online.
“We’re going at it with everything we have, as fast as we can.”
TSX-listed Tanzania Royalty bought the mine from the Tanzanian State Mining Company in December 2010, and has since raised around $60-million to fund exploration.
The firm’s share price closed 33% lower on Thursday after staging a small recovery. On Friday, it closed 24% up at C$2.55.
Edited by: Creamer Media Reporter
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