Tanzanian Gold Corporation
Financials:
Primary ticker: NYSE:TRX
Stage of development: Exploration, Development, Production
Primary minerals: Gold
Project to promote: Buckreef Gold Project
Project location: Tanzania
Website: www.tangoldcorp.com
Cash: USD$ 17.6M (May 31st)
Debt: Nil
Major shareholders:
Management Ownership – 15%
Management Profile
What is your rationale for taking part 121 Mining Investment?
Tanzanian Gold Corporation is currently expanding oxide gold production to a target rate of 15,000 -20,000 oz./yr., while advancing development of a sulphide gold mining operation expected to be substantially larger than previously modeled. Importantly, the company continues planning and executing comprehensive drilling programs to unlock exciting exploration potential across the project. Significant de-risking has taken over the last 6 months. New additions to management team (Stephen Mullowney, CEO, Andrew Cheatle, COO & Director, and Michael Leonard, CFO) have been made. A capital raise of US$21 million has been completed. Gold has been produced from the test plant at Buckreef consistently since June 2020. Expansion is underway. Therefore, management now feels that the company presents the full profile to be recognized by high quality institutional and professional investors, and believes that Tanzanian Gold will be received very well at the 121 Mining Investment London Conference. The Company looks forward to the increased awareness that could be created at the event.
What recent news would you like to highlight to investors attending?
What are your key goals in 3 months, 6 months, 12 months?
3 Months:
Expanding Production. TanGold has successfully operated a 5tph oxide test plant for over one year. With the experience and the data collected from this operation, the company plans to expand the size of the test plant to a 15 tph rate capable of producing an average of 750 ounces of gold per month for the first 18 months, beginning in October 2021 (please see July 15th Press Release on our website -www.tangoldcorp.com). Cash flow from this increased test plant production will enable reinvestment in the business and fund exploration, drilling and capital expenditures at Buckreef. Simultaneously, TanGold has begun its plan to increase oxide production further by expanding plant capacity to 40 tph, which is expected to produce gold at a rate 15,000 – 20,000 oz./yr. beginning in approximately 6-12 months., This expanded oxide production is a key value driver for TanGold beginning in the near term.
6 Months:
In addition to the oxide expansion, Tangold will focus on Accelerating Exploration. The Buckreef Project has tremendous exploration potential. TanGold continues to evaluate and identify opportunities for the discovery of additional mineral resources and their conversion to mineral reserves. The recent discovery of Buckreef West and the Anfield Zone further expands this potential. Details regarding these important discoveries are summarized in the company’s July 15th Press Release of Q3 results, and in the MD&A (website – www.tangoldcorp.com). The company is currently evaluating these discoveries along with exploration potential in the Main Zone which remains open along strike and at depth. Targets are being delineated and drilling is expected to commence in the upcoming months. The significant amount of exploration potential at Buckreef is a potential value driver for the company over the next 6 months.
12 Months:
Advancing Development. The company has announced updated and highly favorable metallurgical results from the sulphide component of the Buckreef Mineral Resource, which stands at 2.036 million ounces M&I and 635,000 ounces Inferred. Sulphide ore represents approximately 93 % of the deposit. Initial test work conducted by SGSL is now complete. Details of the test work are summarized in the company’s July 15th Press Release of Q3 results. Discussion of the test work begins on page 24 of the MD&A (website – www.tangoldcorp.com) and suggests a straightforward flowsheet for sulphide project mine plan. The ongoing development of the larger scale sulphide project is expected to be an important value driver for TanGold over the next 12 months.
What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?
The gold mining business is inherently risky. Most junior mining companies share certain risks, including financial market risk, liquidity risk, jurisdiction risk, and potential risks from Covid 19. A talented new executive team at TanGold seeks to mitigate many of these risks by taking a business first approach, with a high level of engagement in Tanzania , an increasingly strong mining jurisdiction. The balance sheet has been strengthened and re-organized. Key executives have travelled extensively to Tanzania this year, with COO Andrew Cheatle spending over 120 days there. he result is a re-invigoration our relationships in Tanzania at the project, local, regional and national levels.
What do you think makes your company such a compelling investment?
TanGold is a substantially de-risked company, with a new management team executing a straightforward business plan plan along 3 parallel tracks – 1. Expanding production, 2. Development of a large-scale sulphide mining project, and 3. Resource expansion through exploration. Each track is a potential lever to the TanGold value proposition and marketplace re-rating.
What are the top 3 key investor takeaways?
1.A talented new management has re-organized and strengthened the TanGold Balance sheet. 2. The threshold size of the Buckreef asset is high and growing. 3.The executive team is executing on a sound business plan with three value creating components moving forward simultaneously.