Dar es Salaam. Canada-based Tanzanian Gold Corporation said yesterday that it will soon start processing its vast gold reserves at Buckreef Mine in an exercise that will see Tanzania getting 45 per cent of the proceeds.
Buckreef Mine contains close to four million ounces of gold. Currently, gold prices hover around $1,600 per ounce. Thus, the four million ounces translate into nearly $3 billion in net proceeds from the mine after the cost of extraction and processing.
“Tanzanians will be receiving 45 per cent of that number or about $1.44 billion (about Sh3.3 trillion),” the firm’s executive chairman, James Sinclair said in a statement at the weekend.
He said actual processing will start in about 45 days.
“It’s absolutely unheard of!” Mr Sinclair said. “Up to this point, African resources were plundered by other nations and only a fraction of the wealth was ever returned to the country. That will all change with the mining of Buckreef, and our partnership with the nation of Tanzania is not only historic, it is groundbreaking for both the nations of Africa and the world’s mining industry.”
Mr Sinclair said the contract was a game changer because it was changing the industry to benefit the host country.
The benefits could be more than what is reported because further exploratory drilling has shown that much more could be extracted from the site.
“This means that there will be money for education and hospitals and capital improvements. These projects will bring such a positive social impact to the nation.”
The Buckreef project area consists of the dormant Buckreef Gold Mine and four prospects with known mineralisation that include Buckreef, Buziba, Tembo and Bingwa.
Under an agreement with State Mining Company (Stamico), Tanzanian Royalty has the right to earn a 55 per cent interest in Buckreef.