Tanzania Mining Conceptual Study Proposed by Shanta Gold

A conceptual study and an environmental and social impact assessment (ESIA) for the proposed Chunya project in the southern Tanzania mining sector has been commissioned by Shanta Gold, a gold exploration and development company that works in the green fields in order to further develop the exploration prospects in the under-exploited areas in the country.

A South African company, TWP Projects (Pty) Limited, has been contracted to perform the conceptual mining study while the Tanzanian company, PaulSam Geo-Engineering Co. Limited will perform the environmental portion of the study.

According to a news report on the Shanta website, the current plan for the conceptual mining study portion of the project involves six steps: a review and evaluation of the ore body models to ensure a realistic geological model is used for design work, including rock strengths, ore body shape, estimate of gold content, future exploration programs to upgrade the resource; the determination of conceptual mining methods, mine access, layouts, schedules, geotechnical and support parameters; a conceptual assessment of infrastructure requirements, surface and underground services, logistical and systems requirements including process flow diagrams, major equipment lists and order of magnitude cost estimates; human resource complements, remuneration and organogram; an order of magnitude capital expenditure estimates for all major items, operating expenditure fixed and variable costs and a discounted cash flow model; and finally, a risk assessment.

The study is expected to be completed within 8-10 weeks after it has officially begun and will, therefore, be tabled with Shanta by the middle to end of August 2009.

The second portion of the project, the ESIA, will be completed in four steps including the determination of the impacts of the proposed mine; the analysis of alternatives to the project; the development of a management plan to mitigate negative impacts; and a monitoring plan.

Overall, the ESIA project timeline is expected to run six months and will include reviews, and require approval, from the National Environmental Management Committee and the Vice President’s office in Tanzania.

Earlier this year, in April, Shanta announced a JORC compliant resource assessment for the Chunya project of 845,000 ounces in the indicated and inferred categories, which helped to justify the initiation of preliminary techno-economic mining and environmental studies with the hope that the company would achieve a first pass determination of the economic viability of a small to medium scale mine on the site after which time, the outcome of the studies will be used to justify the further work needed to complete a pre-feasibility study.

In addition, these studies are also expected to significantly help Shanta to gain valuable understanding of the economics of the deposit at Chunya and to further assist them in the securing of financial and operating partners to develop a mine at this site.