New Gold Project

RNS Number : 8473A

Obtala Resources PLC

15 October 2009

 



15 October 2009

OBTALA RESOURCES PLC ("Obtala" or the "Company")

New Gold Project in the Lake Victoria Goldfields, Tanzania

The Board of Obtala Resources, the AIM quoted mineral exploration and development company is pleased to announce the completion of an Acquisition and Option Agreement with RSR (Tanzania) Limited, a private Tanzania registered company, for the Busolwa gold project. The Busolwa Gold project is located in the Lake Victoria Goldfields within the south-eastern part of the Geita District in Tanzania and currently has active owner-operated small scale mining on the property.

The area under consideration covers 51.26 square kilometres, and includes a 6.90 square kilometre permitted mining licence, valid for 10 years. The project area is located approximately 40 km east of AngloGold's multi-million ounce Geita Gold Mine, and 25km north of the 14Moz Barrick owned Bulyanhulu Gold Mine. Mwanza, Tanzania's 3rd largest city situated on the shores of Lake Victoria, is located 60km northeast of the project. The Busolwa project is located within the same greenstone belt as AngloGold's Geita Gold Mine. The geology of the project is dominated by a northwest trending banded ironstone formation (BIF) ridge that passes through the centre of the project area and is underlain by intercalated differentiated volcanic units bounded to the north and south by granitic rocks. 

In the Lake Victoria Goldfields region gold mineralization is identified with the BIF (for example Geita and Resolute Mining's Golden Pride Mine) in a sulphide phase and within quartz veins hosted by shears and fractures. BIF together with associated gold mineralization is present on the Busolwa project area and represents a major exploration target. 

Based on data held by RSR from previous explorers in the area, the highest reported gold grades are associated with quartz veins. These results include trench BT-1 grading 12.2 g/t Au over 5 metres; trench BT-4 grading 4.7 g/t Au over 4 metres; and Borehole BSBH 13, grading 11.2 g/t Au over 3 metres. Wider intersections noted include Borehole BSBH 14, grading 2.2 g/t Au over 10 metres; Borehole BSBH 17, grading 1.2 g/t Au over 9 metres and grading 1.0 g/t over 18 metres. 

Under the terms of the agreement Obtala will receive an initial 50% interest in the licences covering the project area for a payment of US$150,000. Obtala will then spend 10 months evaluating the project after which it has an option to acquire a further 10% interest in the project for an additional US$150,000, or allow the option to lapse. 

At present RSR is operating a small scale mine within the mining licence, employing approximately 100 artisanal workers to produce up to 5 tonnes of ore per day from 5 shallow 20-30m vertical shafts covering a 120m long section of a mapped 600m long vein structure. The owners have an approved Environmental Impact Assessment (EIA) from the Government of Tanzania, which was completed as a requirement for the Mining Licence approval process.

Frank Scolaro, Chairman of Obtala, commented that "I am delighted that Obtala has concluded this agreement. The Busolwa project is positioned in a world-class gold producing region, with operations nearby including AngloGold Ashanti's Geita Mine and Barrick's Bulyanhulu Mine. This project complements our existing gold portfolio and adds a project of significant potential with gold known to occur in previous trenching and drilling taking Obtala a step closer to becoming a near term gold producer. We remain fully funded to take this prospect forward and are confident that the results of future work on this project will contribute to delivering realisable value in the near-term for our shareholders. Our strategy remains the same, the realisation of shareholder value through strategic associations and we remain confident that this will be achieved throughout our portfolio of licences and assets." 

Contact:

Obtala Resources plc Simon Rollason - Managing Director Frank Scolaro - Executive Chairman	[phone] www.obtalaresources.co.uk
Fox-Davies Capital
Jason Bahnsen	[phone]
ZAI Corporate Finance Ltd
Ray Zimmerman/Jonathan Evans	[phone]

 

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