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TANZANIA

Key facts

Full name:

United Republic of Tanzania

Capital:

Dodoma

Population:

44 million (2009 estimate)

Area:

945 087km²

Major languages:

Swahili (official), English (official), Arabic

Major religions:

Christian, Islam, indigenous

Major exports:

Gold, coffee, cashew nuts, manufactured goods, cotton

Government:

Republic

Mineral regime

Tanzania is renowned for its abundance of unexploited mineral reserves. Gold, diamonds, nickel and gemstones play key roles in the country’s growing minerals industry, although most major developments are evident in the gold sector. Administration of the 1998 Mining Act is the responsibility of the Minister of Mineral Affairs and the Commissioner of Mineral Resources. Under the Act, mineral rights involve both large- and small-scale operations.

Benzu's strategy

Prove up gold resource in emerging gold province – early mover advantage

• Benzu has an interest in Benzu Gold Limited (www.benzugold.com) which holds a 92% stake in two tenements in the Handeni gold district, a known gold-bearing belt where extensive exploration is under way.
• The Benzu Resources team is closely involved with the development of these properties in association with Benzu Gold Limited
• Underexplored and highly prospective terrain
• Gold fundamentals continue to look strong – key commodity to have within portfolio
• Gold industry developing well within Tanzania – significant operators include Barrick Gold, AngloGold Ashanti

The Negero and Kwadijava Gold Project - Overview

Benzu's interest in Tanzania, the Negero and Kwadijava Gold Project, comprises two reconnaissance licences, covering an area of 400km². Situated in the Handeni district, some 210km northwest of Dar Es Salaam, the project area is accessible via good tar and gravel roads.

The local geology and the known gold occurrences exposed by local, artisanal diggers suggest that the mineralisation is controlled by regional structures, typically shear zones.

The exploration of the Negero and Kwadijava project is at an early stage. Local geology and known gold occurrences exposed by artisanal diggers suggest that the mineralisation is controlled by regional structures, typically shear zones –the mineralisation trend is likely to be 10km long. Verification samples collected by Benzu suggest intersections of: 4m @ 7.7g/t; 2m @ 9.47g/t and 2.5m @ 8.85 g/t. The consistency of grade and resource is also evidenced by excellent drilling results published by TSX-listed Canaco operating directly to the east of the tenements.

Key exploration work completed to date

• Acquisition agreement signed in January 2010 and exploration commenced in March 2010
• Regional geological mapping including all artisanal gold mining sites
• Ground magnetic and IP survey over the Kwamsambia-Kilimamzinga prospect
• Licences conversion from PLRs to PLs completed in October 2010
• Regional geochemical soil sampling covering both properties; generation of several, new gold prospects
• High-resolution (50m line spacing) airborne magnetic and radiometric survey over both properties
• Structural mapping by internationally renowned expert
• Diamond Drilling programme commence on the Kwamsambia-Kilimamzinga prospect

Q4 2011

• Follow-up soil sampling to continue on high-interest geochemical targets generated from regional geochem sampling and high-resolution airborne geophysics
• Diamond drilling programme on-going (>2,500m out of 5,000m achieved to date)
• RC drilling to recommence in order to cover parts of Kwamsambia-Kilimamzinga targets not tested yet and to reconnaissance-drill new targets
• Two additional diamond drilling rigs from Rosond Drilling to arrive on site to start Phase-3 (10-20,000m)
• Installation of dedicated sample preparation facility on site
• Compilation of final N.I.43-101 (October 2011)

2012

• Complete in-fill diamond drilling programme with objective to move one prospect to an Indicated Resource
• Establish “blue-sky” potential for the whole of the two concession areas

Resource evaluation

• The economics of the project are favourable as the ore will be recovered by open-pit mining methods
• Infrastructure is mature and in close proximity to the property
• Current cash costs for miners range between $US286 - $US660 with an average of $US450/oz
• Provisional interpretation of results has generated a potential gold resource of >1M oz at Kwamsambia within the Negero licence alone, based on the following parameters:
  • 4,500m long x 10m wide x 150m deep (=6,750,000m³ or 17,550,000 tonnes) @ an average grade of 2g/t
• Likely that other prospects of the same potential will be discovered out of the 13 targets identified from the reconnaissance geological mapping