HomeEast AfricaIndiana Resources restructures operations in lieu of revised legislation

Indiana Resources restructures operations in lieu of revised legislation

Prior to July 2017, the Indiana Resources strategy focused on three key elements: advancing the Naujombo and
Kishugu gold exploration projects; delivering value on the Ntaka Hill nickel project; and expanding its portfolio of gold assets in Tanzania.

Gold exploration at Naujombo and Kishugu over the past 12 months has consisted of geophysical work, extensional and in-fill soil sampling programs, rotary air blast (RAB) drilling and aircore drilling.

RAB drilling in 2016 intersected zones of anomalous gold within the bedrock and provided a strong basis for follow up exploration.

Aircore drilling in 2017 that focused on targets identified from 2016 RAB drilling and follow up field work, including a strong gold in soil anomaly at Naujombo South, intersected significant zones of mineralisation in the bedrock and outlined a new open-ended gold mineralised zone at Naujombo South.

These first-pass drilling results at Naujombo South confirmed the prospectivity of the Naujombo area.

As the fourth largest gold producer in Africa, Tanzania is host to substantial gold resources, much of which is
yet to be brought into production.

Over the past six months, Indiana Resources has investigated acquiring additional gold exploration opportunities in Tanzania to expand its existing portfolio of gold assets and has identified a number of opportunities that would fit well into an overall Tanzanian gold portfolio.

In addition, Indiana Resources has undertaken further desk top study work for its Ntaka Hill nickel project.

This work has demonstrated the potential for a smaller scale (lower capital cost) operation, based on the existing
high-grade resources.

However, owing to the proportion of Inferred Resources in the mining schedule, the specific results of that study work cannot be released as they do not meet the ASX requirements for release of scoping study results.

Nonetheless, with an emerging demand driven thematic associated with the use of nickel sulphate in lithium-ion batteries, the outlook for nickel is positive and Ntaka Hill provides leverage to an improving nickel price environment.

New legislation passed by the Tanzanian government in July 2017 relating to the legal and regulatory
framework governing the natural resources sector in Tanzania created significant uncertainty for the mining
industry in Tanzania and accordingly Indiana Resources elected to halt ground exploration and project acquisition
opportunities until greater clarity was obtained on any potential impact on Indiana Resources’ activities.

In the months following the changes to legislation, the detail and scope of those changes remain unclear and while Indiana Resources remains committed to its Tanzanian assets, the board has elected to commence a search for a new project outside Tanzania as an immediate priority.

As part of the review of Indiana Resources’ strategy it has become apparent that the acquisition of a new project
requires a different skill set at board level.

The current MD, Campbell Baird, whose primary role was to advance Indiana Resources’ Tanzanian projects, has agreed to step down with immediate effect but will remain available to assist Indiana Resources with ongoing administrative tasks as required and to support a handover to the new MD once an appointment has been made.

The board has commenced the search for a new MD and will update the market in due course.

Indiana Resources maintains a low-cost profile, with corporate and administration expenses of approximately
$270 000 per quarter, and with current cash reserves of $760 000, has sufficient funds to meet its tenement
expenditure requirements and to commence project generation activities.

Feature image credit: Wikimedia