TanGold Continues Execution on Sustainable Business Plan Reports First Quarter Results
TanGold Continues Execution on Sustainable Business Plan
Reports First Quarter Results
FOR IMMEDIATE RELEASE – January 14, 2022
TORONTO, January 14, 2022 (GLOBE NEWSWIRE) - Tanzanian Gold Corporation (TSX:TNX) (NYSE
American:TRX) (TanGold or the Company) today announced results for the first quarter of 2022 (“Q1 2022”).
Financial results for Q1 2022 will be available on the Company’s website and will be filed on SEDAR and
provided on EDGAR on January 14, 2022.
During Q1 2022, the Company continued its successful execution towards a sustainable business plan in
which cash flow from operations funds value creati ng activities, including exploration and sulphide project
development.
Q1 Accomplishment and Highlights
Production Growth: Positive operating cash flow at Buckreef Gold in December 2021 with 533 ounces
of gold production, after successfully completing construction and substantial commissioning of 360
tonnes per day (“tpd”) processing plant. The 1,000+ tpd expansion is on track for calendar Q2/Q3 2022
with two additional ball mills already having arrived in Dar es Salaam.
Exploration Upside: Drilling has recommenced at Buckreef Gold with the goal of expanding resources,
discovering new resources and converting resources to reserves. To date, a total of six exploration
holes (1,716 meters) have been completed, includi ng three holes (758 meters) in the northeast
extension of the Buckreef Main Zone. The Company plans to expand the exploration program in 2022,
including a focus on the Anfield Zone.
Sulphide Development Project Advancement: Advanced the metallurgical study, one of the longest
lead items on the Sulphide Developm ent Project, which c ontains approximately 90% of the Buckreef
Gold resource. To date, a total of 19 holes (2, 367 meters) have been completed for the metallurgical
program. These metallurgical sample holes have been logged and are in preparation for shipment for
metallurgical testing in Q2 2022. Exploration drillin g will also focus on infill drilling Inferred Mineral
Resources, which if successful, has the potential to increase tonnes to the Indicated Mineral Resource
category and add, if economic, to the Mineral Reserves.
“It has been an extremely busy year. In conjuncti on with our Tanzanian co lleagues, contractors and
suppliers, we have successfully moved the Company to a position where we have proven we can execute
on a mine plan, build plants and successfully produce gol d to cover operating costs. As we continue to
expand production in 2022, we will move to a position where value accretive activities including exploration
and unlocking the value of the Sulphide Development Project, will be predominantly funded from anticipated
positive operating cash flow. 2022 is setting up to be quite an exciting year, with a lot of activity focused on
our goal of making everything “Bigger”: product ion growth, potential resource expansion through
exploration and unlocking the signific ant value of the sulphide project by making it much larger than
previously disclosed” noted Stephen Mullowney, Chief Executive Officer of TanGold.
Q1 Accomplishments & Outlook
Successfully completed construction and s ubstantial commissioning of the expanded 360 tpd
processing plant. Buckreef Gold was operating cash fl ow positive for the first time in December 2021.
The Company continues to expect the 360 tpd throughput to increase production to 750-800 oz of gold
per month1 at a total average Cash Cost 2 of US$725-825/oz once steady state processing has been
achieved in fiscal Q2/Q3 2022. The larger 1,000+ tpd processing plant is expected to be completed in
calendar Q2/Q3 2022 and is forecast to produce 15,000 – 20,000 oz of gold per year.
Exploration drilling has recommenc ed at Buckreef Gold and will be an increasing area of focus and
expanded throughout fiscal 2022. To date a total of six exploration holes (1,716 meters) have been
completed, including three holes (758 meters) in the northeast extension of the Buckreef Main Zone.
These holes are following up on the northern-most intersection of 50. 0 meters at 1.8 g/t in hole
BMRCD308. TanGold believes that the property and immediate surrounding area is highly prospective
for economic gold mineralizat ion. Within the last six months the Anfield Zone was discovered. The
Anfield Zone lies ‘on-trend’ between a historical mineral resource (the Eastern Porphyry) and an
adjacent mining facility with nearly 3 kilometers (“k m”) of untested shear zone located 500 meters to
the east of the Buckreef Main Zone. High grade fres h rock samples were retrieved from an artisanal
mine shaft. Geological assessment of the property and adjacent leases continues and will pick up pace
throughout fiscal 2022.
Following up on positive metallurgical results from the oxide operations (top of Buckreef Main Zone
deposit) and the preliminary metallurgical testing for the sulphide portion of Buckreef Main Zone deposit
(three bottom of pit samples), me tallurgical testing for sulphide project development has moved to
variability testing of the first 5-7 years of production and will continue into 2022 including tailing
characteristics for dry stack ta ilings. Geotechnical and groundwater work will continue on identified
areas (i.e. plant, tailings, waste rock storage facility) . To date, a total of 19 holes (2,367 meters) have
been completed for the metallurgic al program. These metallurgical sample holes have been logged
and are in preparation for shipment for metallurgical testing in Q2 2022.
Processing and Mining
Buckreef Gold reported zero lost time incident s, two medical treatment incidents and had no COVID-
19 related cases at site in Q1 2022. For the calendar year ended December 31st, 2021, including
contractors, Buckreef Gold reco rded a safety incident frequency rate of 4.9 (per million hours).
Exclusive of contractors, Buckreef Gold recorded a safety incident frequency rate of 0 (per million
hours).
Q1 2022 reflected an important tr ansition for Buckreef Gold, moving from a test plant to commissioning
of Phase 1 of the 1,000+ tpd processing plant. Buckreef Gold successfully completed construction and
substantial commissioning of the 360 tpd processing plant expansion. The expanded processing plant
construction was completed in line with the scheduled completion date of September/October 2021 at
a capital cost of US$1.6 million, within guidance. In-house construction was completed by the Buckreef
Gold and TanGold teams in conjuncti on with key consultants/contractor s, including: (i) Ausenco; (ii)
Solo Resources; and (iii) CSI Energy Group.
Buckreef Gold continued to operate the 120 tpd proce ssing plant for the first tw o months of Q1 2022.
Following successful commissioning of the first 3 60 tpd processing plant and associated processing
circuit by October 31st, 2021, the existing 120 tpd processing plant was integrated into the new circuit
as a ‘regrind mill’. Run-of -mine (“ROM”) mill feed comm enced on November 6th, 2021 and
management continues to ramp up throughput and improve efficiencies. The processing plant
throughput continued to increase through the ramp- up and commissioning period, predominantly with
lower grade ore, which is normal in the commissioning of any processing plant. Buckreef Gold produced
589 oz for Q1 2022.
This upward trajectory continued into December 2021, with 533 oz of gold produced, of which 494 oz
was sold. The rapid advance of production has resulted in Buckreef Gold becoming operating cash flow
positive in December - the first month in Buckreef Gold’s history. The 360 tpd processing plant achieved
the following in December 2021: (i) average throughput of 251 tpd; (ii) plant availability of 86.5%; (iii)
average recovery rate of 85.6% wi th consistent tailings grade, regardless of head grade; (iv) average
retention times of 26.3 hours; and (v) average grindabilit y of 86.5% passing 75µ (microns). It is
important to note that in the commissioning and ramp-up phase of the 360 tpd processing plant the
Company utilized low grade ore, including in the December period. The processing plant’s positive
trajectory is expected to continue throughout Q2 2022.
Buckreef Gold has continued to focus on optimizing a ll key operating metrics for the 360 tpd processing
plant. As such, Buckreef Gold has implemented the following upgrades to the 360 tpd processing plant:
(i) installation of an eighth CIL tank (target completion - January 2022) ; (ii) installation of 1 megawatt
genset (already installed); and (iii) early expansion the elution circuit (target completion – January 2022),
which will also be utilized in the 1,000+ tpd processing facility. These improvements will allow Buckreef
Gold to achieve higher: (i) retention times; (ii) plant availability; (iii) throughput rates; and (iv) recovery
rates. With these improvements, Buckreef Gold anticipates achiev ing nameplate capacity of 360 tpd,
target 28 hour retention times and higher recovery rates in fiscal Q2 2022.
Total ore mined in Q1 2022 increased to 116 thous and tonnes (“kt”) from 9 kt in Q4 2021 and the strip
ratio in Q1 2022 was 3.1 (ore:waste tonnes). The increase is the result of recommencement of mining
activities in Q1 2022 with the hiri ng of a Tanzanian mining c ontractor (FEMA) on a two-year contract.
Increased mining continued into December until the holiday break period. The ROM pad stockpile
balance as of December 31 st, 2021 was 3,526 oz of gold with an average grade of 2.0 g/t, which
includes 2,001 oz of gold grading 3.7 g/t. The in creased stockpile balance provides support for the
Company to meet its production guidance in the upcoming quarters.
In Q1 2022, through FEMA, Buckreef Gold successfu lly and safely completed the first two blasts in the
Buckreef Main Zone. These blasts were in high grade areas where transitional ore reached near surface
enabling access to high grade ore blocks.
Geotechnical and ground water studi es related to the oxide materi al tailings storage facility (“TSF”)
successfully concluded and a permit to construct the TSF was grant ed by the Mining Commission of
Tanzania in Q1 2022. Excavations for the TSF co ntinued through the latter part of the Q1 2022 and
into Q2 2022. The oxide material TSF is scheduled to be operational in Q2 2022.
During Q1 2022 Buckreef Gold continued to advance plans for construction of a 1,000+ tpd operation
while simultaneously operating the 360 tpd operati on. Buckreef Gold has procured two additional
360 tpd ball mills (from the same manufacturer), whic h have arrived at the port in Dar es Salaam and
are expected to be transported to site in January 2022.
Other long-lead orders, such as ‘off the shelf’ crusher and cyclones will be placed in January 2022.
Geotechnical work for the expanded 1,000+ tpd processing plant has been completed and earthworks
have commenced. Ausenco has been retained as TanGold’s owner engineer and the process circuit
will be primarily locally sourced a nd constructed by the same local teams in a manne r substantially
similar to the 360 tpd processing plant expansion.
The targeted completion date of the 1,000+ tpd processing plant of calendar Q2/Q3 2022 remains
unchanged and the larger processing plant is expected to produce 15,000 – 20,000 oz of gold per year
based on the initial mine plan and grade profile, which was developed in conjunction with SGS Canada
Inc. (“SGSC”). This initial mine plan incorporates approximately 10% of the resources in the Buckreef
Main Zone. The Company continues to budget c apital expenditures for the expanded 1,000+ tpd
processing plant of approximately US$4.0 million.
Exploration
Exploration has recommenced at Buckreef Gold with STAMICO being retained for diamond drilling
services for a 10,000 meter program, for both exploration and metallurgical drilling.
To date a total of six exploration holes (1,716 meters) have been completed, including three holes
(758 meters) in the northeast ext ension of the Buckreef Main Zone. These holes are following up on
the northern most intersection of 50.0 meters at 1.8 g/t in hole BMRCD308. The above samples are
currently being prepared for assay at local accredited laboratories.
Exploration will be of increasing focus and expanded throughout fiscal 2022 in line with the ramp-up of
production. The initial focus will be on: (i) extension of the Buckreef Main Zone in the northeast; (ii)
initial exploration in the Anfield Zone; and (iii) infill drilling in Buckreef West and Buckreef Main Zones.
As mentioned previously, TanGol d believes the property and immediate surrounding area to be highly
prospective for economic gold miner alization. Within the last si x months the Anfield Zone was
discovered. The Anfield Zone lies ‘on-trend’ betw een a historical mineral resource (the Eastern
Porphyry) and an adjacent mining fa cility with nearly 3km of untes ted shear zone located 500 meters
to the east of the Buckreef Main Zone. High grade fresh rock samples were retrieved from an artisanal
mine shaft. Geological assessment of the property and adjacent leases continues and will pick up pace
throughout 2022.
Sulphide Development Project
The Sulphide Development Project, in which t he ‘sulphide ore’ encompasses approximately 90% of the
Buckreef Main Zone’s 2.0 MT Measured and Indicated resources, is a key value driver for the Company.
Unlocking this value is an important objective of the Company, the Sulphide Development Project will
evaluate the options for a high return large scale project to pre- feasibility (“PFS”) or feasibility study
(“FS”) level work. It is the goal of the Company to substantially exceed all metrics as outlined in the
Technical Report, including annual production and strip ra tio. We continue to work with our principal
consultants on the Sulphide Development Project, including re-visiting the Technical Report mine plan
in calendar Q2/Q3 2022.
In 2021 the Company identified, with Ausenco, the overarching mine infrastructure layout (plant, tailing
storage facility, waste rock dump and camp). Following this work, the Company will now advance each
area with geotechnical and ground water studies, along with site wide water balances.
Geotechnical characterization of t he 2 km long open pit will also commence in 2022. To this end, in Q1,
the company has made arrangem ents with its consultants SGSC and Terrane Geoscience to
commence site work during calendar Q2/Q3 2022 (COVID-19 permitting).
The Technical Report mine plan is schedul ed to be re-visited during Q2/Q3 2022.
One of the longest lead items for the Sulphide Developm ent Project, is the variability metallurgical study
for the first 5-7 years of potentia l production of the Sulphide Development Project. To date, a total
19 metallurgical holes (2.367 meters) have been completed along the entire strike of the Buckreef Main
deposit and the holes have been logged and are in preparation for shipment for metallurgical testing.
Exploration drilling will also focus on infill drilling In ferred Mineral Resources, which if successful, has
the potential to increase tonnes to the Indicated Mineral Resource category and add, if economic, to
the Mineral Reserves.
Environmental, Social and Corporate Governance (“ESG”)
The Company is committed to working to the high est ESG standards and has initiated several programs,
whilst developing a broader framework and policies. There were also no reportable environmental or
community related incidents during the first quarter. Buckreef Gold continues to expand its CSR / ESG
program, successfully partnering with the Distri ct and Regional Commissioners on school, water and
health projects.
Buckreef Gold continues to work with the Geit a District Council and local Wards to collaboratively
identify key programs that focus on short to long te rm educational needs, which in turn is aligned with
Buckreef Gold’s local hiring practices and includes Science, Technology, Engineering and Mathematics
(“STEM”) and gender goals. A Memorandum of Understanding will be signed in calendar Q2 2022, and
the Company will continue to focus on local hires at Buckreef Gold and with associated contractors.
Buckreef Gold’s operations: (i) are connected to t he Tanzanian national electricity grid and utilizes grid
power which is sourced from hydroel ectric facilities in Tanzania; ( ii) recycles all water used in its
operations; (iii) do not discharge water from its operations; (iv) workforce are 100% Tanzanian citizens;
(v) development and building activities are focused on maximizing local content; (vi) exhibit a ‘100 mile
diet’ by procuring all food locally; and (vii) sulphide development is expected to utilize dry stack tailings.
The Company supports local procurement in all activi ties by first sourcing within the immediate wards,
then out to district, region and nati on. Only those items or services not available within country are
purchased externally from Tanzania, first prioritizing East Africa, Africa then globally.
Other
During 2021, TanGold through Buckreef Gold hired a surveying consultant (Property Matrix Company
Limited) to commence the land compensation process required under Tanzanian mining law. The land
compensation process has been fully accrued in the Company’s financial statements and as of January
13, 2022, approximately 96% of project affect persons have been paid representing 94% of the overall
dollar amount. It is expected that the remaining 4% of project affected persons will be compensated by
the end of Q2 2022.
On November 30, 2021, Buckreef Gold entered in to a Gold Purchase and Sale Agreement with
Auramet International LLC (“Auramet”) through which Bu ckreef Gold will, at its discretion, sell up to
100% of the gold produced from Buckreef Gold to Au ramet at market rates, for a period of one year,
with an option to extend for success periods. In 2021, gold produced from t he 120 tpd test plant had
been sold locally whereby the Purc hase and Sale Agreement with Auramet will accommodate sale of
the larger expected gold output from the 1,000+ tpd processing plant. Auramet is a global physical
metals merchant providing a full range of servic es including metal merchant, merchant banking,
structured finance and advisory services.
Financing
As at November 30, 2021, the Company had cash of $7.9 million and net working capital of $4.2 million.
After adjusting for $1.9 million in derivative liabilities, working capital on an adjusted basis is $6.1 million.
December 2021 record production and sales (533 oz and 494 oz, respectively) has resulted in Buckreef
Gold being operating cash flow positive in December, the first month in Company history. This positive
trajectory is expected to continue throughout Q2 2022.
As the Company advanc es and the production profile expands, management continually evaluates its
liquidity requirements and available sources of financing including but not limited to: (i) cash flow from
operations; (ii) corporate debt; (iii) project specific debt; (iv) off-take financing; and (v) equity financing.
The Company will be prudent in how it capitalizes the Company over the short, medium and long-term
with shareholder value being an overarching consideration.
Subsequent to Q1 2022, the Company entered into a purchase agreement with Lincoln Park Capital
Fund, LLC (“Lincoln Park”). Under the terms of the purchase agreement, TanGold, in its sole discretion,
will have the right from time to time over a 36-mo nth period to sell up to $10 million of its shares to
Lincoln Park, subject to certain conditions. TanGold will control the timing and amount of any sales to
Lincoln Park, and Lincoln Park is obligated to make purchases in accordance with the purchase
agreement. Any common shares that is sold to Lincoln Park will occur at a purchase price that is based
on prevailing market prices at the time of each sale and with no upper limits to the price Lincoln Park
may pay to purchase common shares.
Importantly, Lincoln Park has also agreed not to cause or engage in any direct or indirect short selling
or hedging of the Company’s common shares. No warrants are being issued in this transaction, and
there are no limitations on our use of proceeds from sales to Lincoln Park under the purchase
agreement. Furthermore, the purchase agreement does not contain any right s of first refusal,
participation rights, penalties or liquidated damages provisions in fa vor of any party. The agreement
may be terminated by TanGold at any time, in its sole discretion, without any additional cost or penalty.
About Tanzanian Gold Corporation
TanGold along with its joint venture partner, STAMIC O is advancing a significant gold project at Buckreef
in Tanzania. Buckreef is anchor ed by an expanded Mineral Resour ce published in May 2020. Measured
Mineral Resource is 19.98 million tonnes (“MT”) at 1.99 grams per tonne (“g/t”) gold (“Au”) containing
1,281,161 ounces (“oz”) of gold and Indicated Mineral Resource is 15.89 MT at 1.48 g/t gold containing
755,119 ounces of gold for a combined tonnage of 35.88 MT at 1.77 g/t gold c ontaining 2,036,280 oz of
gold. The Buckreef Gold Project also contains an Inferred Mineral Resource of 17.8 MT at 1.11g/t gold for
contained gold of 635,540 oz of gold. The Company is actively investigating and assessing multiple
exploration targets on its property. Please refer to the Company’s Updated Mineral Resources Estimate for
Buckreef Gold Project, dated May 15, 2020 and filed under the Company’s profile on SEDAR on June 23,
2020 (the “Technical Report”), for mo re information. Buckreef is bei ng advanced in a value accretive
sustainable manner through:
Expanding Production Profile: A 360 tonne per day (“tpd”) processing plant is being expanded to 1,000+
tpd, enabling a near term production profile of 15,000 - 20,000 oz of gold per year. Positive operating cash
flow will be utilized for value enhancing activities, including exploration and Sulphide Project Development.
Exploration: Continuing with a drilling progr am with the goal of expanding resources, discovering new
resources and converting resources to reserves, by: (i) step-out drilling in the northeast extension of
Buckreef Main; (ii) infill drilling to upgrade Mineral Resources currently in the Inferred category in Buckreef
Main; (iii) infill drilling program of Buckreef West; (iv) develop exploration program for the newly discovered
Anfield Zone; (v) upgrade historical mineral resources at Bingwa and Te mbo; (vi) identification of new
prospects at Buckreef Gold Project, and in the East African region.
Sulphide Development Project: Unlocking the value of the Sulphide Project in which the ‘sulphide ore’
encompasses approximately 90% of the Resources. It is the goal of the Company to substantially exceed
all metrics as outlined in the Technical Report, including annual production and strip ratio.
For further information, please contact Michael Martin, Investor Relations, [email protected],
860-248-0999, or visit the Company website at www.tangoldcorp.com
Andrew M. Cheatle, P.Geo., the Company’s COO and Director, is the Qualified Person as defined by the
NI 43-101 who has reviewed and assumes responsibility for the technical content of this press release.
The Toronto Stock Exchange and NYSE American have not reviewed and do not accept responsibility for
the adequacy or accuracy of this release. Tanzanian Gold Corporation is providing the reference of the
research report in this press release for information only.
Forward-Looking Statements
This press release contains certain forward-looking statements as defined in the applicable securities laws.
All statements, other than statements of historical facts, are forward-looking statements. Forward-looking
statements are frequently, but not always, identified by words such as “expects”, “anticipates”, “believes”,
“hopes”, “intends”, “estimated”, “potential”, “possible” and similar expressions, or statements that events,
conditions or results “will”, “may”, “could” or “should” occur or be achieved. Forward-looking statements
relate to future events or future performance and reflect TanGold management’s expectations or beliefs
regarding future events and include, but are not limit ed to, statements with re spect to the continued
operating cash flow, expansion of its process plant, estimation of mineral resources, recoveries,
subsequent project testing, success, scope and viability of mining operations, t he timing and amount of
estimated future production, and capital expenditure.
Although TanGold believes the expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future performance. The actual
achievements of TanGold or other future events or conditions may differ materially from those reflected in
the forward-looking statements due to a variety of risks, uncertainties and other factors. These risks,
uncertainties and factors include general business, legal, economic, competitive, political, regulatory and
social uncertainties; actual result s of exploration activi ties and economic evaluati ons; fluctuations in
currency exchange rates; changes in costs; future prices of gold and other minerals; mining method,
production profile and mine plan; delays in exploration, development and construction activities; changes
in government legislation and regulation; the ability to obtain financing on acceptable terms and in a timely
manner or at all; contests over title to properties; employee relati ons and shortages of skilled personnel
and contractors; the speculative nat ure of, and the risks involved in, the exploration, development and
mining business. These risks are set forth in report s that Tanzanian Gold files with the SEC. You can
review and obtain copies of these filings from the SEC's website at http://www.sec.gov/edgar.shtml .
The information contained in this press release is as of the date of the pr ess release and TanGold
assumes no duty to update such information.