Canadian-listed Tanzanian Gold Corporation has secured additional funding to expand its Buckreef project in Tanzania.
Tanzanian Gold announced that it has signed a flexible financing agreement for about USD14-million of unsecured convertible debentures with institutional investors Riverfort Global Opportunities. The deal will strengthen the company’s balance sheet by converting USD8.4-million of outstanding gold loans and convertible loans into common shares.
The proceeds from the financing deal will be used to expand the Buckreef project’s oxide mining and processing operation, to advance the feasibility study for the larger sulphide mining complex, the continuation of multiple drilling programmes, and general corporate purposes.
Tanzanian Gold has developed a scope of project to expand the oxide processing plant to the range of 40t per hour (tph) as the basis for regulatory approval. According to James E. Sinclair, executive chairman of Tanzanian Gold, the financing enables the company to continue building shareholder value as the company enters substantial new phases in the process of building a substantial mine at Buckreef.
“We have dramatically grown our resource base at very low cost, increased the scale and scope of what we now feel will be the next major mine in Tanzania, and have begun to unlock the tremendous blue-sky potential that exists with our continuing exploration and development programs. Critically, we have now become a gold producer. The financing announced today will ensure the rapid expansion of production, and by the end of the term of this agreement, we expect to reach our goal of becoming cash flow positive,” says Sinclair.
Tanzanian Gold commenced production at its oxide plant in June 2020. Tanzanian Gold is now moving ahead to significantly expand its oxide plant’s processing capacity. An ongoing drill programme has, to-date, more than doubled the size of measured and indicated resources to 2.036 million ounces. Additional exploration targets have the potential to add up to another 2 million ounces.
Tanzanian Gold is considering an underground gold mining component at Buckreef. The company has started ultra-deep drilling and completed a Level 1 stope design and will start infill drilling to upgrade ounces currently in the Inferred category.