Dual-listed Tanzanian Royalty Exploration will not be affected by new mining laws in Tanzania as it was compliant with the new laws in prior to their adoption.“The new mining laws in Tanzania appear to be an action to gain a fair share of the financial rewards for the people and nation of Tanzania while still providing incentives to the investors. The proposed legislation is not nationalisation,” says Tanzanian Royalty Exploration executive chairman, James E. Sinclair.
Sinclair co-authored a book titled "BOOM" written in the 1990s with F. Vogl, former director of communications for the World Bank.
"Boom" outlines the authors' prediction for the economic development of China, Tanzania and India as those countries move into the modern global economy.
[quote]Many of the new laws adopted in Tanzania (and elsewhere) were outlined in the book. The authors' premise, which is being borne out in present legislative trends states that to participate in the development of a foreign economy investing companies must enter into mutually beneficial contracts.
Tanzanian Royalty Exploration executed a joint venture contract granting 45% for STAMICO, the State Mining Company, and 55% for Tanzanian Royalty Exploration as the investor.
Tanzanian Royalty Exploration carried all the costs for the Buckreef gold project up front. These front end costs of the project shall be reimbursed out of production.
Tanzanian Royalty Exploration paid to the Government of Tanzania US$3 million a non-refundable upfront fee, for the privilege of operating in Tanzania.
Public companies are required to comply with reporting regulations. Reporting is necessary for transparency. Reporting transparency is required not only for all exploration results but also for all economic and mineral information published on the Canadian and USA government regulatory sites, SEDAR & EDGAR.
To date, Tanzanian Royalty Exploration has invested C$21,9 million in the Buckreef gold project.
The most recent Canadian National Instrument 43-101 report filed Tanzanian Royalty Exploration provides that an economic analysis has been carried out on the Buckreef gold project for a range of gold prices with $1,250/ounce selected as the base case.
The analysis demonstrates that the project is expected to generate a positive NPV at a 5% discount rate of US$243 million and a positive IRR of 53.7%.
Based on this economic analysis, the estimated value of STAMICO's holdings in the Buckreef project is substantial. STAMICO acts as agent for the Tanzanian federal government. The NI 43-101 revealed 1 million oz of gold to be mined at Tanzanian Royalty Exploration’s Buckreef project, which will benefit the company and Tanzania.
"We believe Tanzanian Royalty Exploration is in total compliance with all new mining standards. Tanzanian Royalty Exploration was in compliance with the new laws in Tanzania prior to the adoption of these laws,” explains Sinclair.
“There are no outstanding differences or disputes between the government of Tanzania and the company. Due to corporate foresight, the company's actions and policies were well ahead of the new laws Tanzania has currently promulgated.
“The new laws will not impact Tanzanian Royalty Exploration. These new laws will impact companies in our industry who have a history of exploiting Tanzania without benefit to the nation or its people.
“Our arrangement with the Tanzanian government should be a role model for the entire industry. We also take great comfort in the various economic and investor protection treaties in place between Tanzania and Canada.
“We welcome and look forward to our continued good relationship with Tanzania, together with our exciting mining prospects there," concludes Sinclair.
Feature image credit: Tanzanian Royalty Exploration