Tanzanian Royalty Exploration Corporation




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Luhala Property

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Luhala Property






Summary & Overview

  • The Luhala Project Area is strategically located 100 km ESE of Geita gold mine along the trend that includes the Nyanzaga (Sub-Sahara Resources NL) and Kitongo (Gallery Gold Ltd) prospects. Total resources at Geita are 129.5Mt @ 3.91g/t Au (16.3Moz). Of these, 13.3Moz are measured and indicated.
  • Tanzanian Royalty Exploration Corporation has performed numerous exploration programs on the project area, including airborne geophysics, soil sampling, trenching and rock sampling, detailed mapping and RAB, RC and diamond drilling, for which key results are summarized herein.
  • The Kisunge-Shilalo target area falls within the Luhala license, and comprises three outcropping hills (Kisunge, Shilalo South and Shilalo West) with abundant significant gold assays from grab sampling, trenching and drilling. Recent RC drilling has significantly upgraded the excellent surface sampling and RAB results obtained on Kisunge hill, the main target area.


Luhala Property

In January 2007, the Company concluded an option royalty agreement with Sloane Developments for its Luhala gold project. Under the option agreement, the Company granted Sloane the right to earn a 100% beneficial interest in six of its licenses comprising the Luhala Project. (See news release dated Jan. 30, 2007).

Property Description and Location

The Luhala property is located in the Misungwi District of Tanzania (see property location map). It lies approximately 70 kilometres south of the City of Mwanza. The prospecting licenses are in good standing with respect to required filings and payments with the goverment of Tanzania.

Regional Geology of the Luhala Project Area::

The Luhala Project Area is located in the Buhungukira greenstone belt, which forms the eastern extensions of the Geita greenstone belt. The Project is located along the Kukuluma - Nyanzaga - Kitongo - Luhala corridor which forms a linear zone of felsic volcanics and sediments host to numerous gold showings: Kukuluma ±2Moz @ 4.0g/t; Kitongo ±0.48Moz @ 2.0g/t.  Barrick East Africa is currently in joint venture with Sub Sahara Africa exploring the Nyanzaga license where ongoing diamond drilling has been taking place for the past 12 months. Current reported reserves here are ±1Moz @ 1.0g/t. The present model for mineralization at all these showings is shear hosted gold within fold and thrust zones.

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Soil Geochemistry:

MMI soil sampling was performed at 200 x 50m spacing over the Luhala License. The Kisunge-Shilalo target area is strongly anomalous and the smaller hills to the north and south are also anomalous. Conventional aqua regia soils were done along the RAB fences at 200 x 50m spacing and then the Kisunge-Shilalo target area was sampled using conventional aqua regia soils at 50 x 25m spacing.

Conventional aqua regia results confirm the strong MMI soil anomaly over the Kisunge-Shilalo target area.

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Airborne Geophysics:

Regional government surveys were flown in 1976-80. Detailed airborne geophysics (100m line spacing) was flown over the Luhala license in 1996.

The principal general interpretations from maps at 1:50 000 scale include:

  • Magnetics are dominated by NE trending dykes
  • ESE trending dykes occur in the NE corner of the license
  • The N-S trending stratigraphy from Matunge hill to Ikungumulu hill is visible, but detail in the Kisunge-Shilalo target area is obscured by the NE trending dyke responses
  • Magnetics do not suggest the presence of significant iron formation on the Luhala license

Gold Mineralization at Luhala:

Extensive significant surface gold mineralization has been discovered within the Kisunge-Shilalo target area. This area forms the main focus of exploration at present and it comprises three hills, namely Kisunge, Shilalo West and Shilalo South hills. From a total of 634 outcrop grab samples taken on the project area, 51 gave results >1g/t Au to a maximum of 10.4g/t Au. Of a total of 3,444 channel samples taken from 48 trenches totaling 4.27km, 220 gave results >1g/t Au to a maximum of 137g/t Au / 1m.

There is a close relation between the "felsic package of rocks" and gold mineralization. The "felsic package of rocks" includes rhyolite, rhyolite breccia, felsic tuffs, chert, argillite and the Ci ironstone unit. The structural and / or stratigraphic setting(s) distinguishing where mineralization is best developed within the favourable host rocks is now starting to be recognized.

One geological / lithostructural model presented (Oliver, 2003) associates gold mineralization to dilatant zones developed at specific stratigraphic sites (namely chert / rhyolite horizons) near fold closures along the two major fold structures. A second model (Learn, 2004) suggests that the principal control for gold mineralization is related to N-S trending, moderately E dipping (in the order of 50š), thrust faults.

Although anomalous gold at Luhala is related to certain stratigraphic horizons, in particular, chert, argillite and felsic tuff beds in the "felsic package of rocks", and although anomalous gold at Luhala can be found all along the N-S trending faults,economic concentrations of gold may be expected at the intersection of these faults and favourable stratigraphic horizons. Intersections of the faults and fold closures of favourable stratigraphic horizons may ultimately define the highest grade mineralized zones, similar to the model proposed for the Geita deposits.

Shilalo West hill:

Mapping shows geological units at Shilalo West hill striking N-S and dipping steeply east. Trenching on Shilalo West hill gave positive results over a 350m strike length (including 5.2g/t Au / 3m and 3.2g/t Au / 6m). Diamond drill hole LSD-8A intersected two intervals of gold mineralization: 3.2g/t Au / 6.2m and 2.1g/t Au / 6.5m.

Approximately 100 m to the north, RC hole LRC-4 gave 1.8g/t Au /10m and at 600 m north of LRC-4, RAB hole LRB-262 intersected anomalous gold values from 22-30m including 1.1g/t Au / 1m. And at approximately 500 m to the south, RC hole LRC-16 gave 1.7g/t Au / 5m.

Shilalo South hill:

Geological units at Shilalo South hill strike ENE-WSW and dip south. RAB drilling was performed E and W of the hill with negative results, but no RAB drilling was performed on the hill. Subsequent trenching along the top of the hill gave positive results over a 550 m strike length (including 33.4g/t Au / 5m and 5.6 g/t Au / 13m). This mineralization was tested at its western extremity by diamond drill holes LSD-1 (29.6g/t Au / 1m) and LSD-2 (2.8g/t Au / 2m), but only three other holes have been drilled at Shilalo South:
  • LRC-2 1.5g/t Au / 2m
  • LRC-3 5.3g/t Au / 2m
  • LSD-3 1.8g/t Au / 4.3m

Gold values in the trenches have not been adequately drill tested. This was a logistical problem due to steep topography on the south side of the hill.

Kisunge hill:

Geological units at Kisunge hill trend about E-W and dip south, with local N-S / east dipping domains. RAB drilling along N-S profiles at regular 200m spacingacross the hill demonstrated the presence of significant gold in the near-surface saprolite profile over 800 m including:
  • 3.7g/t Au / 14m along L7400E
  • 2.0g/t Au / 10m along L7600E
  • 3.1g/t Au / 4m along L7800E
  • 2.3g/t Au / 28m along L8000E

Subsequent trenching gave positive results over a 300 m strike length (including 2.2g/t Au / 15m and 1.5g/t Au / 16m). Follow-up diamond drilling on L7400E gave results including LKD-1: 5.7g/t Au / 14.4m and LKD-2: 1.9g/t Au / 7.8m. LKD-4 on L7600E gave 1.7g/t Au / 1m and LKD-5 on L8000E gave 4.1g/t Au / 2m. These intersections were all near-surface, within the oxide cap on the hill. No mineralization in fresh bedrock has yet been intersected.

Early drill holes were collared anticipating E-W zones with S dips. On a recent visit to Kisunge hill, we observed several N-S to NE-SW striking, W verging faults with 50šE dips associated with mineralized trenches, grab samples and drill holes.

These have been observed outcropping on L7150E (grab samples in the fault grade up to 2.88g/t Au), and L7400E (RAB and DDH intersections follow the strike of the mineralization). Based on these new observations, a series of RC drilling programs and one diamond drill program have been conducted on the Kisunge hill in 2005 and 2006. These are discussed in a section below:

Kisunge hill outlier:

One of the NE fault planes can be observed on a small outcrop 200m south of Kisunge hill along L7400E. Grab samples grade up to 3.37g/t Au. RAB hole #67 gave 2.18g/t Au / 2m and 1.71g/t Au / 3m. RAB hole #248, collared just east of the outcrop, gave 3.05g/t Au / 4m. Additional anomalous grab samples grading up to 1.18g/t Au continue for 350m to the south along the extension of this outcrop.

Shilalo West hill outlier:

Another of these fault planes can be observed on a small outcrop 600m south of Shilalo West hill (and 400m south of LRC-16). Grab samples grading up to 1.42g/t Au have been collected in the hanging wall of the thrust plane. No trenching or drilling has been performed in this area.

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Geological Model:

Structure:

Mineralization at most of Geita mine is controlled by ENE trending; south verging thrust planes, dipping 50š to 60šN, in particular where these shears intersect favourable stratigraphy - BIF horizons and hornblende-rich diorite. At Kukuluma, (eastern end of Geita mine), mineralization is localized at the intersection of ESE trending, north verging shear planes dipping 50šS within carbonaceous argillites / minor BIF. Furthermore, the intersection of faults with favourable stratigraphy at fold closures has proven to be most productive in BIF and in the carbonaceous argillite at Kukuluma. Mineralization at Kitongo prospect (main zone) is localized along a NE trending, NW verging shear plane dipping 50šSE where the shear intersects a fold closure at a chert-tuff contact.

The company is optimistic that mineralization at Luhala can now be compared with mineralization at Geita mine and at the Kitongo and Nyanzaga prospects. At Luhala, we have identified N-S to NE-SW trending, W to NW verging, ~50šSE dipping fault structures along which there is considerable gold.

Alteration:

Although all the gold mineralization intersected at Luhala to date is in oxides, numerous observations can be made regarding alteration. The "Ci" unit, is referred to by Tanzanian Royalty Exploration as an ironstone due to its high Fe content, and is logically a result of an oxidized Fe rich protolith. It is not laterite, but more a "pseudo gossan" for lack of a better term. This unit only hosts gold where it is brecciated. The breccias generally have vein quartz and chert fragments hosted in a massive hematite matrix. At Kukuluma Ci development is clearly related to breccia zones. Ci is however not a prerequisite to gold mineralization.

Kaolinization is dominant around the Luhala hills. Kaolinization is predominantly a result of the laterization process, although increases in kaolin are noted in close proximity to structures. Kaolin is also spatially associated with the formation of Ci. There is no direct relationship between kaolinization and gold mineralization, and the kaolin is typically barren of gold mineralization.

The dominant form of alteration associated with gold mineralization at Luhala is silicification. Silicification is pervasive, and does not typically occur as vein quartz.

The presence of folding is still strongly supported by the previous regional mapping although no microfolds have yet been discovered. Locating the intersections of the controlling N-S to NE-SW structures and fold closures of the chert horizons may be the clue to locating the higher grade shoots of mineralization.

Discussion of Recent RC Drilling Results and Exploration Potential:

From September 2004 to May 2006 an RC drilling program totaling 7,037.5m in 120 holes has been conducted at Luhala. The majority of this drilling (118 holes) has been focused on the Kisunge hill mineralization where previous RAB and diamond drilling, as discussed above, has delineated numerous zones of shallow mineralization. The objective of this drilling was to:

  • test the new model that NS to NE trending thrust faults are the
  • dominant control on gold mineralization.
  • get a better handle on the RAB results, and gold distribution.

The drill holes and sections were planned to the NW, with the intention of intersecting the faults at a perpendicular angle.

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5 phases of RC drilling have been completed and are summarized as follows:

Kisunge Hill, which is approximately 100m high, hosts an oxidation zone down to at least 80m. The drilling on the hill was conducted on approximately a 25m x 40m grid pattern. The mineralization can now be blocked out into two zones:

Kisunge Main Zone:

This zone occurs on the eastern and southern foothills of Kisunge hill. In the east it is north-south striking and flat dipping at approximately 25° east. In the south it is east-west striking and dipping moderately at about 50° south. It was thought that the main ore shoot on the Main Zone is on the eastern limb. The strike length of this shoot is unknown as access in the south is limited and diamond drilling will be required to confirm any extension in this direction. The known strike length to date is approximately 200 metres, with grades and thicknesses of up to 29 metres averaging 2.66 g/t including 13 metres averaging 3.77 g/t. The plunge of the ore shoot has yet to be determined.

It has also been determined that the southern limb to the Main Zone represents a thinner, lower grade portion of the gold mineralization established there to date, with the higher grades typically being around the 2g/t level. This mineralization extends for a strike of approximately 200 metres.

Discussion of Recent Diamond Drilling Results and Exploration Potential:

The Phase 7 program consisted of nine diamond drill holes representing some 991 metres of drilling, all of which tested the eastern limb of the Kisunge Main Zone. The objectives of the drilling were to access areas where the RC rig could not get to so as to test the strike and dip potential of the Kisunge Main Zone eastern limb mineralization. Final assay results for these holes are presented below:

------------------------------------------------------------------------------------
Hole       From       To    	Intercept     Gold      Including
 (m)         (m)      (m)                     (g/t)
------------------------------------------------------------------------------------
LKD-08    45.20     66.65      	 21.45         0.60      1.50m @ 2.07 g/t
------------------------------------------------------------------------------------
LKD-09    48.25     49.25      	  1.00         2.34
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LKD-10    54.80     60.30     	  5.50         1.14      1.30m @ 3.22 g/t
          63.00     67.50         4.50         1.97      2.40m @ 2.77 g/t
------------------------------------------------------------------------------------
LKD-11        -         -          -            -
------------------------------------------------------------------------------------
LKD-12    54.00     63.10         9.10         1.22      2.44 @ 3.90 g/t
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LKD-13    15.00     18.00         3.00         1.05
          42.30     50.70         8.40         4.35      3.0m @ 7.89 g/t
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LKD-14   118.50    123.50         5.00         0.56
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LKD-15    36.60     39.67         3.07         6.87      1.44m @ 10.95 g/t
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LKD-16    29.90     38.10         8.20         0.86      4.06 @ 1.55 g/t
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* The true width varies from 70-100% of intercept length.

Holes LKD-08, 9, 10, 11 and 14 were drilled to test a thick, high grade zone intersected previously in shallow RC holes and obtain an azimuth and plunge to the mineralized shoot. Drilling has indicated that this gold shoot has a shallow plunge with a northerly azimuth. Hole LKD-09 defines the southern cut-off to the mineralization, and LKD-11 marks the northern cut-off, suggesting a strike length of at least 150 metres.

Drill holes LKD-12, 13, 15 and 16 were drilled south of the above-noted mineralization in an area where RC drill rig access was not possible due to the steepness of the hill. Higher grade gold intersections (between 3.90g/t and 10.95g/t) were obtained along a strike of some 150 metres, with the zone being open in both northerly and southerly directions. The trend of this mineralization appears to be north-south but the plunge is unknown.

Drill hole LKD-16 was collared at the same location as LKD-13 but with a vertical dip. The purpose of this hole was to obtain the dip to the mineralization, which was determined to be quite shallow at approximately -10 degrees to the east.

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Other Targets for future testing:

Tanzanian Royalty has recently acquired its own in-house IP department. All future targets at Luhala will first have IP carried out over them before a decision is made on drilling.

Kisunge Hill:

Invaluable structural information was obtained from these diamond drilling program at Kisunge, and due to the shallow dip to the gold-bearing body the Company is planning an additional RC drill program that will commence in the 2007 field program. This program will test the depth extensions to this higher-grade zone obtained in this drilling on the Kisunge Main Zone eastern limb, as well as the depth extensions to the southern limb of the Main Zone.

Shilalo West Hill:

A series of RC drill holes is planned behind the present shallow RC intersections. Further RC or diamond drilling is planned to test the mineralization in the southeast of Shilalo West hill. There is a problem in this area with access as the hill is steep. A bulldozer might be required to build drill pads.

Shilalo South Hill:

Shilalo South hill has not been adequately drill-tested. The few holes drilled here are not representative of the potential of the hill taking into account the surface trenching results. But there is less evidence here, based on recent visits, to know whether and / or where, controlling structures oriented N-S are located. There is evidence of the presence of fold closures at Shilalo south, and systematic drilling of structures crossing the hill will be very prospective. Good continuity of gold grades has been established by the trenching in an ENE direction over 550 m. This surface mineralization has only been drill-tested along strike by 4 drill holes. Two diamond drill holes were drilled on the western end of the hill by two holes spaced 40m apart (LSD-1 and LSD-2). Two RC holes (LRC-2 and LRC-3) were drilled to test the central portion of the hills.

The two diamond drill holes were collared to target a fold nose mapped in the trench on L6900E that gave 5.7g/t Au / 13m at surface. The fold was interpreted to have a westerly plunge but was missed by the drilling. If this target is located at the intersection with one of the E-dipping structures, drilling to the other side of the trench may result in better drill intersection(s). Three more RC holes are proposed at Shilalo South to continue drilling out the strike of the hill.

New Kiginga Zone:

One brand new mineralized zone was discovered approximately 1,500 metres north of the present known gold mineralization at Luhala, during a RAB program in 2005. This newly discovered mineralization appears to strike almost north-south with a vertical dip. There appears to be more than one mineralized zone. The mineralization occurs within an intermediate volcanic tuff horizon. Thin quartz veins and hematite alteration are commonly noted within the zones. This new zone is referred to as the Kiginga anomaly, and includes the following RAB intersections:

------------------------------------------------------------------------
Hole No.     From       Intersection    Gold       Incl       		
             metres)     (metres)     (g/t)
------------------------------------------------------------------------
LRB-303       20           11         	0.17
LRB-305       17            6          	0.31
LRB-307        6            6          	0.11
LRB-308        7            5         	0.67
              21           11       	0.67
LRB-313        9           14          	2.43      6m @ 5.28g/t
LRB-317       27            2          	1.73
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Two RC holes have been drilled at Kiginga to obtain the strike and dip of the mineralization, and returned the following results:

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Hole No. 	  From         To        Intercept  	Gold    
         	(metres)    (metres)     (metres)     	 g/t
-----------------------------------------------------------------------
LRC-61             26           29           3          1.14
          	   32           35           3          1.96
LRC-77        	   39           42           3          1.30
-----------------------------------------------------------------------
 

This mineralization will be further delineated with RC drilling in late 2006.

Pls 1559/00, 2297/03

Regional soil geochemistry and geological mapping:

Soil sampling (conventional aqua regia) at 500 x 50m spacing along N-S lines on Ngobo and Shilalo (452 samples / conventional aqua regia) gave results up to 78ppb Au along the northern extension of the Kisunge-Shilalo target area. As a result of this survey, the ground in the small gap that existed between Luhala and Ngobo licenses was acquired (Shilalo license). This has been beneficial as recent RAB drilling has identified a new mineralized zone on Luhala called the Kiginga anomaly that appears to extend onto Shilalo. RAB drilling of the main Ngobo PL's in 2005 was not too successful and it was decided to return two PL's to WIDESCOPE PROMOTION.

Further work on the Kiginga anomaly will be in the form of IP surveys followed by possible RC drilling in 2007.

Regional soil geochemistry and geological mapping:

In 2001, Tanzanian Royalty Exploration Corp. decided to evaluate the performance of BLEG soil sampling compared to conventional aqua regia (or MMI) soil sampling. A small orientation survey (11 samples) comparing conventional aqua regia and BLEG results was performed at Luhala. As the comparison of results was satisfactory, soil sampling at Sima was done using the BLEG method.

BLEG soil sampling at 400 x 400m spacing (111 samples) gave results to a maximum of 49ppb Au near Chibuji hill in the southwest corner of the license. A second, lower priority anomalous area with a maximum result of 17ppb Au can be defined in the NW corner of Sima license. This weaker anomaly is consistent with dispersion from the stronger MMI anomaly at Ikungumulu hill in the SE corner of Luhala license.

The only outcrops visited on Sima license occur on Chibuji hill. The regional geologic map is therefore very preliminary. 5 rock samples have been taken on the license and one of these, sample E3686, returned a result of 2.8g /t Au. This sample of Ci ironstone float was taken at the foot of Chibuji hill on its eastern side.

Follow-up soil sampling:

Soil sampling at a 200 x 50m grid spacing (121 samples / conventional aqua regia) was performed over the southeastern BLEG anomaly. The survey returned a maximum Au value to 93ppb.

In 2005 a regional RAB drilling program was conducted over the group of Sima PL's to test magnetic structures as well as Bleg soil anomalies. 5 RAB fences were drilled across favourable stratigraphy. Results were generally poor. As part of condemnation a few RC fences were drilled on anomalous RAB intersections returning poor results. As a result PL2681/04 has been returned to WIDESCOPE PROMOTION.

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