Memorandum To: Kevin Schultz

Copy To: Jim Ross

From: Robin Wilson

Date: 4th May, 1997

Subject: April Monthly Report

1.0 SUMMARY

Results were received from the RC Drilling program completed at the Mawe Meru
project. Better results came from the Busolwa prospect, which include 24m(19-43m)
at 7.41 ppm Au in MWBR112 and 16m(29-45m) at 3.09 ppm Au in MWBR082. At
the Main Reef prospect a best intersection of 5m(49-54m) at 22.20 ppm Au in
MWMR040 was returned, while at Eldorado 6m(57-63m) at 3.10 ppm Au in
MWIR002 was received.

Further results were also received from the geochemical soil sampling program on the
Illilika grid where 12 distinct anomalies greater than 50 ppb have now been defined.

Several significant rock chip results were received from samples taken at Busolwa
close to the granite contact on the hill.

2.0 SOUTHERN LAKE VICTORIA GOLDFIELDS

2.1 BUSINGWA (RL 50/94)

No work completed.

2.2 IGOGO HILLS (PL20/92)

No work completed

2.3 IGOGO NORTH (PL: Recommended for granting)

No work completed.

2.4 KISUGE HILLS (PL19/92)

No work completed

2.5 MAWE MERU (PL406/96)

2.5.1 RC Drilling

Most of the results have now been received for the RC Drilling program completed at
the Busolwa, Main Reef and Eldorado prospects. Several significant intersections
have been received from Busolwa which are summarised in the table below. Results
have still not been received for holes MWBR074(78-121m) to 081(0-87m).

Busolwa RC Drilling :Significant intersections

Hole No. North East From(m) To(m) Width(m) Au ppm

MWBR061 10000 10200 63 73 10 2.38
79 99 20 1.66
MWBR062 9960 10200 26 39 13 2.27
MWBR063 9920 10200 31 36 5 2.47
52 64 12 1.88
MWBR064 9880 10200 88 99 11 1.53
MWBR066 10000 10100 34 43 9 1.22
56 61 5 6.33
MWBR068 9920 10100 17 22 5 2.14
MWBR070 10060 10300 27 31 4 4.75
97 107 10 1.82
MWBR072 9980 10300 23 28 5 2.26
MWBR082 9900 10020 29 45 16 3.09
71 88 17 1.57
MWBR112 10080 9700 19 43 24 7.41
inc. 19 26 7 12.99
MWBR114 10120 9600 50 63 13 1.77
MWBR118 10035 10100 96 120 24 2.57

Significant intersections are generally associated with potassic and silica altered felsic
porphyries with 5-10% quartz veining, 1-5% disseminated pyrite and occasional
magnetite, or strongly foliated, quartz veined and silica altered ultramafics with 0.5-
2% pyrite and occasional magnetite. There is a strong spatial association between the
amount of pyrite and grade, especially within the porphyries.

There appears to be two distinct mineralised zones striking subparallel at about 290,
between 10,000E and 10,300E. The northern zone may link up with mineralisation
further to the west, on 9600E and 9700E. The dip of the mineralisation is still
unclear. On 10200E the porphyries and associated mineralisation appear to dip fairly
moderately towards the south, and there is good geological continuity on this section.
However, on 10100E, the mineralised porphyry intersected in MWBR118, links with
an earlier obtained intersection in MWBR013, thus indicating a near vertical to steep
northward dipping zone.

There is the possibility that cross-cutting faults, striking about 050 have also
complicated the geological picture. These are indicated on the detailed
aeromagnetics, and quartz veins in this orientation have been mapped on the hill. It is
believed that quite intensive drilling will be required at Busolwa to determine the
extent and the orientation of mineralisation. Drilling in a different direction is
suggested in certain key areas, possibly towards the south. The other alternative is to
drill a few Diamond Drillholes in order to understand the structural complexities and
enable us to target further RC Drilling more confidently and effectively.
At the Main Reef prospect, results have been less encouraging and are summarised
below. Results have still not yet been received for holes MWMR025 to 035.
 Main Reef RC Drilling :Significant intersections

Hole No. North East From(m) To(m) Width(m) Au ppm

MWMR019 10095 10110 24 27 3 4.33
MWMR020 9950 10110 38 40 2 1.95
Dup. 38 40 2 15.8
MWMR036 9950 10670 53 56 3 17.0
MWMR040 9945 10800 49 54 5 22.2
MWMR042 9980 10866 13 15 2 20.5

Mineralisation at Main Reef appears to be associated with strongly foliated, quartz

veined basalts, generally at or close to the contact with granite/porphyries. The
basalts are occasionally silicified and usually contain 1-3% disseminated pyrite where
mineralised. The intersection in MWMR040 is associated with semi-massive
pyrite( up to 50% pyrite). The intersections in MWMR036 on 10670E and
MWMR040 on 10800E correlate well with previous high grade intersections, and
indicate a zone dipping 60-80 towards the south.

These mineralised zones, although of high grade, appear to be of very limited width
(true width of 1-3m), and it is difficult to envisage these zones constituting an
economically viable open-pittable resource.

At the Eldorado prospect, preliminary results have been received for all four holes.
Significant intersections are summarised in the table below.

Eldorado RC Drilling :Significant intersections

Hole No. North East From(m) To(m) Width(m) Au ppm

MWIR001 9950 10200 0 9 9 2.57
51 55 4 3.15
MWIR002 9960 10200 57 63 6 3.10
MWIR003 9920 10200 0 8 8 4.96

Near surface mineralisation is associated with pisolitic laterite and saprolitic clays.
Bedrock mineralisation is associated with quartz veins within mafic volcanics(tuff?),
close to a contact with a possible felsic tuff. This contact appears to dip shallowly
towards the south.

Results of the one metre resplits from the RC Drilling carried out at Busolwa
and Main Reef last year, have shown significant differences to the original
composite samples results from Geomet. Resplits were sent to Omac for wet
assay and were grab sampled, while the original composites were grab sampled
and sent to Geomet for fire assay. Of the 88 resplit samples from Busolwa, 47%
of the results from Omac were unacceptably different(+/- 50%) from the
Geomet results. 29% of the results were unacceptably lower from Omac than
Geomet, and 17% were unacceptably higher from Omac. This throws up some
question marks about all results from Geomet and the different assaying
methods, i.e. wet versus fire assay. Experimenting with various assay labs and
assaying techniques may be required before the optimum solution is found.
2.5.2 Rock Chip Sampling

Results have been received from the rock chip sampling program carried out at the
Busolwa prospect in March. The table below summarises the significant results.
 Busolwa Rock Chip and Dump Sampling: Significant results(>1.0ppm Au)

Sample No. North East Au ppm Lithology

382206 9880 10393 1.03 sheared um
382208 9885 10393 1.8 um?
382209 9876 10395 1.15 quartz vein,um
382211 9876 10395 4.7 quartz vein
382212 9855 10420 2.0 dol/por?
382215 9800 10405 1.0 sheared silicified rock
382219 9735 10395 1.09 granite
382223 9825 10440 2.53 sheared um
382310 9910 10470 4.5 sheared um
382314 9814 10500 5.05 sheared um
382315 9810 10510 13.4 porphyry
382317 9790 10520 2.88 sheared um
382321 9710 10535 1.28 granite
382410 10125 10605 1.39 laterite
382419 9748 10655 1.32 granite w. qv
382425 10052 10650 1.37 sheared um
382430 10030 10625 2.66 porphyry?
382501 10020 10710 1.72 sheared um
382517 9870 10125 45.5 porphyry
382111 9730 10350 1.08 quartz float
382115 9803 10290 1.46 granite
382122 9930 10340 1.13 sheared um
382129 10158 10365 1.83 quartz and laterite

These results demonstrate that there are further drilling targets higher up the hill and
more significantly, that the granite is mineralised close to the contact and even up to
50m from the contact. This throws up a completely new drilling target. Drilling
should be extended to the south, despite the problems of access, to test the
granite/ultramafic contact. This zone on the hill could be the eastern extension of the
zone intersected recently in MWBR082.

2.5.4 Geochemical Sampling

Further results have been received from the soil sampling program carried out at on
the Illilika grid.

Large zones of greater than 25ppb Au have been outlined, which parallel the regional
structural trend. In the southern part of the grid is a zone five kilometres long striking
east-west, from east of the old Eldorado mine towards the Buziba area. This anomaly
is open to the south. There are a further four subparallel anomalous zones(>25ppb
Au) striking east-west or east northeast. These anomalies are between one and four
kilometres in strike length, with two of them open to the east. All of these zones
have central anomalies of >50ppb or >100ppb Au, and a recent field inspection
suggests that all anomalies are real and not due to contamination from small-scale
miners activities.

With the detailed aeromagnetics, prioritisation of geochemical targets will be

possible. However, the indications are, that a substantial RAB Drilling program will
be required to effectively test the area.

2.5.5 Aeromagnetics
Hard copies of the World Geoscience image processed data have been received.
Copies at 1:20,000 scale of Total Magnetic Intensity(colour) north and east
illuminations and Total Magnetic Intensity underlain by a First Vertical Derivative
have been received. However, these images have now been improved as further
gridding and microlevelling has been completed by World Geoscience. Copies of
these new images have not yet been supplied. The interpretation of the data by Helen
Anderson of World Geoscience is still in progress and should be completed in early
May.

2.5.6 Community Support

The Nyarugusu Police Station is nearing completion and the finishing touches will be
added next week. It is understood that police personnel will begin operating from
there in two weeks time.

2.5.7 Future work

Further RC drilling is proposed at the Busolwa and Eldorado prospects. Infill drilling
at Busolwa is required plus testing of the granite contact and further up the hill is
required. Approximately 3000-4000 metres may be required at Busolwa and 1000
metres at Eldorado. At Eldorado some agreements on claims further to the east will
be required, prior to drilling to the east of MWIR001 and MWIR002 can be
commenced.

The numerous soil anomalies at Illilika and Busolwa East require infill sampling to
200m x 50m spacings and closing off in certain areas. Some negotiating with claim
owners may be required to complete this process, especially in the Illilika area.

Resampling of anomalous samples from the first RAB and RC programs which were
submitted to Geomet will be completed, as doubts exist about the veracity of
Geomet’s results. In addition samples of prospective geology which did not return
anomalous assays will be resampled. One metre grab samples will be taken from the
Main Reef RAB and Busolwa RC holes and one metre riffle splits will be taken from
the Main Reef RC holes. Samples will be submitted to Omac for wet assay.
Approximately 800 samples are planned.

Resplits of anomalous intersections from the recently completed RC program will

also be undertaken. Samples will be riffle split and submitted for fire assay.

2.6 SEMU RIVER (RL45/94)

2.6.1 Geochemical Soil Sampling

A reconnaissance sampling program was completed during the month. A total of 63

soil and stream sediment samples were collected from the licence area. The soil
samples were collected from pits one metre deep and the stream sediment samples
were collected along the major rivers and creeks. Stream sediment samples weighed
about 5 kg, while soil samples weighed 2 kg. Samples were located with the GPS.
No outcrop was found in the licence area. Alluvium of the Semu River covers about
one-third of the licence area. Alluvium consists of coarse to fine sands of quartz,
calcrete nodules and some brown-red quartz. The rest of the area is covered by black
mbuga soils. Above the 1080m contour some calcrete is observed at 1-2m depth.
The nearest outcrop to the licence was located 35 km to the north, which comprised a
foliated quartz-plagioclase-biotite granite cut by quartz and calcareous(?) veins. The
foliation trend is east-west.

Samples have been submitted to Omac for low-level BLEG Au plus Pt, Pd (fire
assay) and Ni and Cr (multi-acid) assay. This works out at US$40 per sample which
is high but required to get the most out of the samples. Transport costs of the large
samples for BLEG are also high at about Tshs1.6 Million.

2.7 SHAGENGE (PL15/92)

A follow-up pitting program over the Kiloleli soil anomaly is planned for May.
Approximately 50 pits are planned on 200m x 50m centres.

3.0 VEHICLES

The following vehicles were used on SLVG project areas during the month:

KM @ 1/04/97 KM @ 30/04/97 Total(km.)

Station Wagon TZJ 1368 22,000? 24,520 2,520?
Landcruiser TZE 3623 ? 181,500 ?

TZJ 1368 kilometres should be allocated between Mawe Meru and Semu River.

4.0 MWANZA OFFICE/RESIDENCE

Rest Leave was finished on the 10 th April. A total of 17 days were taken off, not
including public holidays and Sundays.

5.0 MINISTRY OF ENERGY AND MINERALS

Mawe Meru December 1996 Quarterly Report - Madini Mwanza and Madini Geita.

Robin Wilson
 APRIL SAMPLE DETAILS

PROJECT PROSPECT/ SAMP. TYPE SHEET BATCH TOTA LAB. DATE

GRID NO. NO. L DESPATCHED
Semu River Regional Soil/Stream 4201-4203 SR/97- 63 OMAC 16/04/97
sediment 01