An American company has announced the discovery of vast gold deposits in Singida Region.
Lake Victoria Mining Company said in its August 6 statement that initial assay results from an underground sampling suggested that gold was present in a five-kilometre strip at a staggering grade of 7.1 grams of the precious metal per metric ton.
Comparatively, according to the United States Geological Survey, Canada's Barrick Gold Corporation found a grade of 1.9 grams per metric ton at Buzwagi in Kahama District during a pre-feasibility study in 2005.
Buzwagi Gold Mine, which started production in May, this year, is Tanzania's newest gold mine.Barrick said Buzwagi was expected to produce approximately 200,000 ounces of gold at the cost of between $320-$335 (Sh424,000-Sh443,875) per ounce.
Prior to the identification, Lake Victoria Mining geologists had collected 175 underground samples from 36 mine shafts within a five-kilometre long trend between June 13 and July 8 this year. The identification was made at an area where artisanal miners work.
The maximum accessible sampling depth was just 47 metres below the surface, and the uncut average value of 7.1 grams per metric ton prompted the firm's president, Dr Roger Newell, to state that the results confirmed the importance of Singida Region in gold mining.
According to the statement, the samples were analysed at the company's laboratory in Mwanza, which was built to ensure that the company succeeded in creating another gold mine in the world famous Lake Victoria Greenstone Belt.
The announcement was made less than a week after it was announced that the initial assay results from small-scale mining tailing piles averaged 2.75 grams per metric ton.
The tailing piles are a result of the past five years of small-scale mining, processing and gold recovery operations by local artisanal miners in the area.
What impresses geologists about the piles discovery is the fact that the tailings had already been processed two or three times by the local miners, an indication of the presence of a significant amount of gold underground.
The tailing project started on July 6, this year, and, according to the company's statement, geological engineers have already sampled 13,000 tons of tailings with an average grade of 2.75 grams per metric ton.
The estimated gold content in the 13,000 tons is 1,030 troy ounces and the company expects to sample another 6,700 tons, which may result in a low cost tailings gold recovery project by the end of 2009.
In an earlier statement after receiving the first assay results from the piles in July, Dr Newell, an experienced geologist, commented that in his years of searching for gold around the world, Singida is one of the best areas he had seen, and referred to the search as "easy."
Lake Victoria Mining Company is this week expected to sign a securities exchange agreement with another American company, Kilimanjaro Mining Company, which owns the prospecting licence in Singida.
The signing of the agreement would make Nevada-based Kilimanjaro Mining, a wholly owned subsidiary of the Colorado-based firm Lake Victoria Mining.
Commenting in the discovery, Kilimanjaro Mining president Heidi Kalenuik said: "We already have a huge gold footprint in Tanzania, holding nine separate projects, but this new Singida area is by far the richest and most prolific of all the properties I've visited."
Kilimanjaro Mining, which focuses its exploration in Tanzania, holds a significant number of highly prospective gold and uranium licences, and its acquisition by Lake Victoria Mining gives the American firm a significant stake of the Tanzanian mining sector.
Lake Victoria Mining Company has already appointed a Tanzanian geologist, Mr Ahmed Magoma, a former employee of the Energy and Minerals ministry, to its board. Mr Magoma is to oversee resource property acquisitions and explorations.
The discovery was announced at the time when government critics query why a politically stable and mineral-rich country like Tanzania remains extremely poor, unable even to finance its own budget by over 30 percent.
Tanzania produced 1.75 million troy (about 54.4 tons) ounces of gold in 2007, making it the third largest producer of gold in Africa behind South Africa and Ghana.