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SIKA spurs on gold prospects in Tanzania SIKA Resources is a Canadian junior exploration company focused on Tanzanian gold. Established in 1996, the company has extensive public company experience, as well as excellent contacts and relationships throughout Tanzania and elsewhere across Africa. Management has hands-on experience in taking private companies public and is committed to creating value by fast-tracking prospective gold projects that show superior potential for further development. SIKA’s portfolio of gold projects consists of four gold projects in the heart of Lake Victoria Goldfields, Tanzania. All four properties lies close to major operating gold mines and significant known gold deposits, and all are located within the regional structural corridor that hosts many of the major gold deposits in the Lake Victoria Goldfields area. Tanzania is one of Africa’s most stable, miningfriendly countries, featuring a progressive and Company profile Map showing the location of SIKA properties in Tanzania western-orientated political system. Some salient features of the properties are as follows: • Geological features documented on all properties are consistent with those seen at many of the producing gold mines in the area; • All the properties are readily accessible and within driving distance of the main cities in the region, where all necessary labour, supplies and services may be found; • All four properties are 100% owned by SIKA, with no royalties or other obligations outstanding aside from those due to the Tanzanian government itself. • Several major multinational gold-mining companies have made significant investments in Tanzania and are operating in the area, including Anglogold Ashanti (Geita mine – 33Moz in resource and reserve), African Barrick (Bulyanhulu mine – 15+Moz; Buzwagi mine – 2+Moz; Tulawaka mine – 1+Moz ), and Resolute Mining (Golden Pride – 2.6Moz ). A brief description of the four properties follows: Ntundu gold property • Some 42.6 sq km are located in the Siga Hills greenstone belt (part of the Kahama greenstone belt); • Immediately east of the Jubilee Reef gold mine, a past gold producer, and immediately south of an active artisanal gold mining camp; • 40km south of Bulyanhulu gold mine; • 30km north of Buzwagi gold mine; • Lies along the eastern edge of the Kahama greenstone belt, which is host to both the Bulyanhulu and Geita gold deposits, and within a northeast-southwest structural trend that hosts the Geita, Bulyanhulu, Buzwagi and Golden Pride gold mines. www.sikaresources.com Iselenge gold property • 12.3 sq km located 60km west of the Golden Pride mine at the west edge of the Nzega greenstone belt; • Active artisanal gold workings just 1km east of the property; • Lies along the eastern edge of the Kahama greenstone belt, host to both the Bulyanhulu and Geita gold deposits. Shibiso-Igwema gold properties • Two contiguous properties totalling 132sq km; • Hosted in granitic terrain with slivers of greenstone and banded iron formation similar to the Buzwagi gold mine, which is less than 25km north; • The properties also lie along the eastern edge of the Kahama greenstone belt, host to both the Bulyanhulu and Geita gold deposits. SIKA will continue to focus on the acquisition of gold properties that are geologically similar and geographically proximal to significant gold deposits and producing mines, then advancing them quickly, efficiently and effectively, mindful of the communities and natural surroundings of the areas within which the properties are located. For additional information, please visit the SIKA website shown below. CONTACT Sika Resources Kim Harris, President and CEO CEO Direct Line: + 1 416 447 6882 Fax: + 1 416 447 9950 E-mail: info@sikaresources.com
Price predictions With a shorter time frame, Xstrata plc, BHP Billiton and Glencore International plc made predictions in their annual statements for 2011 on the likely direction of commodity prices. For its part, Xstrata was very optimistic for metals markets, and voted with its wallet by investing US$30 billion in sustaining, or expanding, its operations and building new mines or metallurgical facilities. BHPB’s chief executive, Marius Kloppers, said that, over the longer term, “we remain positive on the outlook for the global economy as the drivers of urbanisation and industrialisation in China, India and other emerging economies are expected to underpin global growth and robust commodities demand”. Mr Kloppers added: “Of the commodities, copper and iron ore are expected to remain supported by their compelling supply-demand fundamentals, while the structural shift in Chinese demand for metallurgical coal remains well entrenched. Geopolitical factors are once again likely to influence crude-oil pricing.” In contrast, BHPB believes the outlook for aluminium, nickel and manganese alloy industries remains “challenging”, which, Mr Kloppers said, has led to a “significant margin compression for most producers, almost irrespective of their position on various global cost curves”. In its trading statement for the year, Glencore noted that this year “has started well across all areas of our business”. The trading group noted “much of the market weakness experienced towards the end of the year has reversed, and market volumes remain healthy”. Precious demand Precious metals look particularly robust, and the global demand for gold rose to over 4,067t, worth US$205.5 billion, in 2011 – the highest amount in 14 years. This is the first time that global demand has topped US$200 billion, and the tonnage level is the highest since 1997. The increase was driven by record interest from investors, according to the latest ‘Gold Trends’ report from the World Gold Council (WGC). Investment demand was up 5%, to almost 1,641t, as buyers in Europe, China and India looked for safe assets during a period of economic uncertainty. China and India are the main cultural consumers of gold, generating 55% of global jewellery demand and 49% of overall demand, said the WGC. Europe also witnessed an increase in demand. The continent posted its seventh consecutive annual gain, to 375t, with Germany and Switzerland the main drivers of growth. China’s jewellery demand increased every quarter of last year, and was the largest single jewellery market worldwide for the second half of 2011. WGC expects demand in China to continue steadily rising. India remains the largest country for gold demand, with 933t. Indian demand accounted for a quarter of total bar and coin demand worldwide, despite the February 2012 weakness of the Indian rupee against the US dollar during the second half of 2011. On the supply side, gold-mine production reached an annual record of 2,810t, 4% up on 2010. Recycling was down 2% year-on-year to 1,612t. When average price rises of 28% are taken into account, this indicates that near-market supplies are drying up and that consumers may be holding on to their gold in the expectation of higher prices. Marcus Grubb, managing director of WGC’s investments, said: “What we can see from these 2011 figures is that there were two main factors driving the results: Asian growth and optimism on the one hand, and western desire to protect assets against uncertainty on the other.” He added, looking particularly at Asia, that there was a major boost to the overall figures from the increase in Chinese demand, which is a trend that will continue over the current year. Mr Grubb said: “It is likely that China will emerge as the largest gold market in the world for the first time in 2012. What is certain is that the long-term fundamentals for gold remain strong, with a diverse and growing demand base, coupled with constrained supply side activity.” WGC’s research shows that central banks continue the trend established in 2010 of being net buyers of gold. Purchases by central banks soared from 77.0t to 439.7t. This reflected the need to diversify assets, reduce reliance on one or two foreign currencies, rebalance reserves and ultimately protect national wealth. Gold support This enthusiasm is shared by most analysts, and reports published by Thomson Reuters GFMS, the CPM Group and PricewaterhouseCoopers all “Indian demand accounted for a quarter of total bar and coin demand worldwide, despite the weakness of the Indian rupee against the US dollar during the second half of 2011” EXPLORATION SPECIAL indicated that strong gold prices would continue, possibly breaching US$2,000/oz toward the end of the year. CPM said that gains would subsequently slow, with 2012 prices unlikely to be exceeded for some years. The updated annual Thomson Reuters GFMS Gold Survey concluded that gold prices may remain stable over the first half of 2012, as concerns about the Eurozone moderate investment. The report forecast an average price of US$1,640/oz for the six months to end-June. However, the report argued that raised expectations for inflation, prevailing low interest rates, and a reluctance to invest in reserve currencies may push prices over the US$2,000/oz mark by late 2012 or early 2013. Philip Klapwijk, head of metals analytics at GFMS, said “The re-emergence of US concerns, in particular any apparent need to adopt [a third round of quantitative easing], could really fire up the gold market.” The GFMS results were supported by responses to the 2012 Gold Price Report from PricewaterhouseCoopers (PwC), which analysed the views of producers representing a forecasted 37.75Moz of gold production for the coming year. Fully 80% of respondents to the PwC survey believed that the price would continue to rise, with over half expecting it to hit US$2,000/oz this year. Analysts at Credit Suisse AG sounded a more cautious note, however, saying that while gold may break records again, prices were unlikely to reach US$2,000/oz in 2012. The PwC survey noted the increasing disparity between gold prices and stocks, comparing an increase in prices of over 23% with a gain of under 4% in the S&P/TSX Global Gold Index between January and November 2011. PwC attributed this disjuncture to the increasing popularity of electronically-traded gold funds. New York-based CPM group released its Gold Long-Term Outlook report in January, arguing that Mining Journal special publication – PDAC 37
Page 1 and 2: PDAC | MARCH 4-7, 2012 exploration
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