23 February 2010

Tanzanian Royalty, Jinchuan in Partnership to Develop Kabanga Nickel

Dar Es Salaam — CANADIAN based Tanzanian Royalty Exploration and China's Jinchuan Mining have entered into a joint venture to explore and develop Kabanga nickel properties in Ngara district of Kigoma region.

In a recent statement posted on the company's website, it said following conclusions of an optional agreement with Beijing Songshanheli Mining Investment Company Ltd, which previously held the properties under an exclusive agreement with Tanzanian Royalty, Jinchuan Mining has agreed to act as operator and hold complete financial responsibility for all exploration activities on the nickel exploration licences.

"Jinchuan Group Limited, the parent company of Jinchuan Mining, is a large integrated nonferrous metallurgical and chemical engineering enterprise engaged in mining, concentrating, metallurgy and chemical engineering," the company's statement signed by Chairman and Chief Executive James Sinclair said.

JGL has projects which produces nickel, copper, cobalt, rare and precious metals and also some chemical products such as sulphuric acid, caustic soda, liquid chlorine, hydrochloric acid and sodium sulphite, together with some further processed nonferrous metals products.

The group's output of nickel and platinum group metals respectively accounts for more than 90 per cent of Chinese production. Jinchuan Group is situated in Jinchang, an industrial city in the eastern portion of the Hexi Corridor of Gansu Province.

Jinchuan Group is the largest producer of nickel and cobalt in China, the statement added. Under the terms of the agreement, the Chinese joint venture partners will hold the right to earn a 100 per cent interest in the Kabanga nickel properties for time-sensitive payments including staged exploration expenditures and a 30-year 3 per cent net smelter royalty in favour of Tanzanian Royalty upon achieving commercial production.

Tanzanian Royalty's Kabanga properties comprise a project area of 4,200 square kilometres, with targets for nickel, cobalt and other minerals. The project area is situated to the north of the high grade Kabanga nickel deposit which is currently under development by a joint venture consisting of Barrick and Xstrata.

Mr Sinclair said in the statement: "The joint participation of these two respected Chinese companies in our Kabanga project is tangible recognition of the potential of this emerging nickel belt and the prospects for further discoveries.

"When we acquired the Kabanga licences several years ago, we recognized the cyclical nature of metal markets and realized that base metal prices including nickel would rebound based on demand from developing economies especially China," he noted.

Tanzanian Royalty will facilitate the entry of the two Chinese companies into the Tanzanian economy, which ranks among the fastest growing on the African continent, the statement concluded.

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