TanGold to expand oxide test plant at Buckreef

Tanzanian Gold Corp (TanGold) is continuing to execute mine development and exploration at its Buckreef gold project in Tanzania.
TanGold to expand oxide test plant at Buckreef TanGold to expand oxide test plant at Buckreef TanGold to expand oxide test plant at Buckreef TanGold to expand oxide test plant at Buckreef TanGold to expand oxide test plant at Buckreef

The Buckreef project is located in the Geita district of Tanzania's Geita region south of Lake Victoria, approximately 110km southwest of the city of Mwanza, Tanzania. It entered production in June 2020.

TanGold's oxide test plant at Buckreef, which has a processing capacity of 5t/h, operated for seven days a week in the company's third quarter, with two 12-hour shifts per day. The plant, which utilises wet tailings, is being used to analyse the site's oxide material characteristics and to improve processes for gold recovery. The test plant also provides data on tailings characteristics, including dry stack tailings options, grade control, materials movement and reconciliation processes.

When the testing period concludes, the company plans to upgrade the oxide test plant to a higher production rate of 15t/h, to be completed in September or October 2021. The plan is based on a grade control and block model and has been reviewed by SGS Canada.

The equipment needed for the upgraded plant that has a long lead time has been ordered and are in transit to the site - this includes a ball mill, tailings facility liners and various plant upgrade components. Earthworks have also commenced for the facility upgrade.

TanGold has estimated the capital cost of the plant upgrade to range between US$1.3-1.6 million. Approximately a third of this capital cost has already been incurred by the company.

This plan is subject to various approvals, including the approval of an expanded tailings facility at the site. TanGold said that the cash flow generated by the higher production rate will mitigate negative cash flow from the 5t/h test plant and maintain continuity of the existing workforce; it will also enable the company to reinvest in the business and to fund exploration, drilling and capital expenditures at the Buckreef Gold level.

The company also plans to build a separate 40t/h oxide plant in a different location within the Buckreef mining licence area, and is currently finalising this plan and its financial models, which are also being reviewed by SGS Canada. This plant will utilise dry stack tailings, and based on the initial mine plan and grade profile is estimated to have a processing capacity of 15,000-20,000oz/y of gold.

The 15t/h test plant will run for an 18-month period while the 40t/h oxide plant is under construction. The company will assess the possibility of an expanded combined 55t/h oxide mining operation in the medium- to long-term future.

TanGold has entered into a letter of intent (LoI) with an engineering, procurement and construction (EPC) contractor and is finalising the agreement for site preparation and the facility's construction. Ausenco Engineering Canada has been appointed as management engineer for the 40t/h oxide plant.

Stephen Mullowney, CEO of TanGold, stated: "The company and Buckreef Gold have continued to make significant progress this quarter. We developed and are actively implementing a plan to mitigate the cash burn at the Buckreef Gold operating level through an upgrade of the oxide test plant circuit. This plan maintains the continuity of the core team and ramps up mining activity in the short term."