Bloomberg News

Tanzanian Royalty Agrees Deal to Develop Buckreef Gold Mine

October 25, 2011

(Updates with estimated costs in third paragraph.)

Oct. 25 (Bloomberg) -- Tanzanian Royalty Exploration Corp., a Canadian gold explorer, signed an agreement with Tanzania’s State Mining Corp. to redevelop the Buckreef gold mine in the east African nation.

STAMICO, as the state’s mines agency is known, will own 45 percent of the venture, while Tanzania American International Development Corp., Tanzanian Royalty’s local unit, will hold the balance, Energy and Minerals Minister William Ngeleja told reporters today in Dar es Salaam.

Development of the project may cost as much as $280 million, Minerals Commissioner Ally Samaje said today in an interview from Dar es Salaam. The Buckreef mine was temporarily closed in 1994 due to poor management, he said.

“The agreement signed today is in line with expectations of the new mineral policy,” Ngeleja said. “It is the beginning of fulfillment of aspirations envisaged by the government.”

Tanzanian Royalty also offered a 15 percent stake of its advanced gold exploration project at Kigosi in the Shinyanga region to Tanzania’s State Mining Corp., Ngeleja said.

--Editors: Alex Devine, Tony Barrett

To contact the reporter on this story: David Malingha Doya in Dar es Salaam at dmalingha@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net


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