TANZANIA PROJECTS

LAKE VICTORIA GOLDFIELDS

(Figure 1 shows the locations of TGO Projects in Tanzania’s Lake Victoria Goldfields)

Buhemba Project

TGO earned 52.5% of PL192/94 by the expenditure of US$2.5 million in 1996/97.

The Buhemba project is based on a prospecting licence of 150km² in the Musoma greenstone
belt, about 45km south-east of the regional city of Musoma. The licence area includes the old
surface and underground workings of Buhemba Mines Limited which produced almost 400,000
ounces of gold from total production of 1.17 million tonnes (average recovered grade of 10.4 g/t
Au) before operations ceased in 1970. Past production came from underground mining of
shallow dipping quartz veins at the Nyasenero mine (to a depth of 160m) with minor production
from open-cut and underground mining of quartz veins at the Buhemba deposit, 4km to the north
(Figure _). Work by Tanganyika Gold commenced in February 1996 and has been largely
focused on the old mining areas. By June 1996 potential open-cut mineralisation had been
identified over a strike length of 300m at Kilamongo (500m north of Nyasenero) and initial
drilling at the old Buhemba mine had intersected significant shallow mineralisation in three of
the first four drill holes.

This early encouragement has been followed by extensive and aggressive exploration through
1996 and1997. Totals of 564 RC holes (34,500 m) and 500 RAB holes (14,300 m) were drilled.
By August 1997 resources of 11.42 million tonnes, containing an estimated 747,000 ounces of
Au, had been defined at an average discovery cost of about US$3 per ounce. More than 80% of
resources occur within 60m of surface and essentially all are within 100m of surface. The
majority of these resources are contained in the Buhemba and Kilamongo deposits where RC
drilling has been the key to discovery. However, programs of extensive soil geochemistry, high
resolution aeromagnetics, detailed mapping, RAB drilling and geological interpretation, have
resulted in the discovery of five other prospects, and significant additional resources.

At the Buhemba deposit, intensive drilling has now defined a north-west striking sheet of
continuous mineralisation over a strike length of 1km and extending up to 400m down dip. It
dips shallowly to the north-east at 10-20° and remains open to the north-west, north and down
dip. Gold mineralisation is usually associated with quartz veins and stockworks within quartz-
feldspar porphyries, or at their contact with mafic volcanics. It is accompanied by pyrite, sericite
and carbonate alteration and ranges from 2m to more than 20m in thickness.

The Buhemba deposit appears to neck at its southern end before development of a flat dipping,
non-outcropping zone of Buhemba-style mineralisation which continues for at least 600m, and
possibly 1km, to the south. This new discovery at Buhemba South is typically 8-16m thick,
occurs over a width of up to 200m and is located within 75m of the surface. The mineralisation
remains open to the south.

Further drilling at the Kilamongo deposit (3.5km south of Buhemba) has defined a north-south
zone of Buhemba-style mineralisation over a strike length of 350m which dips shallowly to the
east at 20-30°. As at Buhemba, initial drill testing has been limited to maximum depths of about
100m and the mineralisation remains open down dip. At its south end the Kilamongo
mineralisation appears to link with the old workings of the Nyasenero mine, a factor which could
provide favourable access to the unmined deeper levels of the Nyasenero vein.

A second discovery of blind mineralisation was made at the Mwizi prospect, 2km south of
Buhemba. This shallow, flat lying zone of Buhemba-style mineralisation has been defined over a
strike length of about 300m by RC drilling to a depth of only 50m. It strikes north-west, is up to
10m thick and 200m wide, and remains open to the south-east. Additional resources within 60m
of surface have also been discovered in narrow shoots at the Magunga and Magunga North
prospects.

Initial metallurgical testing of representative samples from the Buhemba and Kilamongo deposits
indicate recoveries ranging from 89–95% with moderate reagent consumption. Similar
recoveries are expected from the newly discovered mineralisation, because of similar mineralogy
and style.

Future work at the Buhemba project will continue to focus on the initial objective of defining
potentially economic mineral resources of at least 1 million ounces of gold prior to any detailed
feasibility studies. Excellent targets remain in the form of extensions to known mineralisation,
untested geochemical anomalies, and deeper testing of the high grade Nyasenero vein below the
previous mining depth of 160m. Futhermore, the recent recognition of blind zones of Buhemba-
style mineralisation, and the continuing progress in understanding structural controls on gold
mineralisation, have increased the prospective area and the scope for additional discoveries.

Table _

GOLD RESOURCES AT THE BUHEMBA PROJECT

DEPOSIT/ MEASURED INDICATED INFERRED TOTAL

PROSPECT
Tonnes g/t Au Tonnes g/t Au Tonnes g/t Au Tonnes g/t Au Ounces

Buhemba in-situ 2,319,000 2.50 1,135,000 2.19 1,097,000 2.1 4,651,000 2.28 340,929
Buhemba surface 90,000 1.89 427,000 2.05 713,000 1.3 1,230,000 1.6 63,401
Total Buhemba 2,409,000 2.48 1,562,000 2.15 1,810,000 1.8 5,781,000 2.18 404,329

Buhemba South 653,000 2.01 1,600,000 1.7 2,253,000 1.79 129,649

Mwizi and Magunga 540,000 1.94 355,000 1.9 895,000 1.93 55,544

Kilamongo 2,003,000 2.00 468,000 1.82 25,000 2.0 2,496,000 1.97 157,768

TOTAL RESOURCES 4,412,000 2.26 3,223,000 2.04 3,790,000 1.8 11,425,000 2.03 747,289

Notes: Buhemba and Kilamongo resources are based on an indicator kriged block model,
reported to a 1g/t Au cut-off, and fully diluted, with addition of the most recent
resources at Buhemba based on a geologic cross-sectional model with a 1g/t Au cut-off
and a 10g/t Au top cut. The cross sectional model has also been utilised for the
Buhemba South, Mwizi and Magunga resource estimates.
Mawe Meru Project

TGO earned 75% of PL 406/96 by the expenditure of US$2.5 million in 1996/97.

The Mawe Meru project is located 40km south of the regional centre of Geita and based on a
prospecting licence of 145km² which encloses three old gold mines (Figure _). These include
Main Reef, which operated until 1952 and produced about 80,000 tonnes at an average grade of
25-30 g/t Au, and Illilika (previously El Dorado) which produced about 60,000 tonnes at an
average grade of 17 g/t Au, prior to 1962. The licence area has also been the site of intensive
artisanal mining activity, particularly during the 1980’s. Past mining activity exploited high
grade quartz veins, however the extensive laterite and soil cover, and the moderate to strong
weathering, indicate considerable potential for new discoveries suited to bulk mining.

TGO commenced exploration in September 1996, immediately following issue of the licence.
Aggressive drilling programs, totalling 266 RC holes (18,785m), 89 RAB holes (1,772m), 13 air
core holes (294m) and 6 diamond drill holes (496m), have focused on zones of known
mineralisation at Busolwa, Main Reef and Illilika with immediate success. Extensive gold
mineralisation has been defined to a depth of 100m at the Busolwa prospect, additional high
grade shoots have been identified at the Main Reef prospect, and both laterite and vein
mineralisation have been intersected at Illilika.

This drilling was accompanied by more extensive programs of geological and regolith mapping,
high resolution aeromagnetics and soil geochemistry, to assess the potential of other areas within
the licence. Numerous targets were identified and initial testing of geochemical anomalies was
commenced in July 1997 with a 25,200m program of RAB drilling (620 holes) along traverses
400m apart. Significant zones of mineralisation were intersected at Illilika West (8m of 18.70g/t
Au from 4 to 12m), Schule (4m of 12.40g/t Au from 28 to 32m), Tologo (8m of 2.76g/t Au from
8 to 16m), and Mwabageni (4m of 3.53g/t Au from 12 to 16m). Extensive follow up drilling is
required to test these first pass intersections. Ongoing geochemical exploration, mapping and
sampling of artisanal workings is continuing to identify new drilling targets. Notable are a large
area of anomalous gold in soil coincident with a magnetic anomaly at Ibondo in the untested
eastern part of PL 406/96, and high gold values in rock chip samples at Mwamba, an extension
of the Main Reef shear zone.

To date the most significant results at the Mawe Meru project have come from the Busolwa
prospect where RC drilling has identified gold mineralisation within an east-west striking area
1.3km in length and up to 400m in width (Figure _). Mineralisation at Busolwa occurs within
sheared east-west striking, steeply dipping ultramafic rocks containing numerous thin lenses of
quartz-feldspar porphyries ( 10m thick). These rocks are cut by numerous north-west and north-
east trending faults and bounded by a structurally emplaced granite along the southern margin.
Gold mineralisation is associated with silica-carbonate-pyrite alteration and quartz veins. Most
mineralisation appears to be shear related and it often occurs in close association with the
porphyries. Gold values in excess of 1g/t usually indicate multiple lodes from 2-10m thick that
commonly occur within broader mineralised zones up to 30m thick. Some lodes appear
continuous over strike lengths of 200-300m, however interpretation is complicated by the wide
spacing of drill traverses (100m), the total concealment, the typical variability of Archaean gold
mineralisation, and the structural complexity. Infill drilling will be necessary prior to resource
estimation.
Seventy percent of all holes at Busolwa intersected values of  1g/t Au, with many ending in
mineralisation. About 40% of all holes intersected  10 gram metres of mineralisation at a 1g/t
Au cut-off and these holes define three mineralised zones. The largest is a central zone that
extends over a length of 1km and a width of up to 250m and encloses numerous steeply dipping
lodes and quartz veins. This zone includes many holes with intersections totalling  50gram
metres at a 1g/t Au cut-off. It also includes most of the granite contact area where moderate to
high grade mineralisation in quartz veins is associated with extensive low grade mineralisation
(about 0.5g/t Au) in granite. The central zone is open to the west, south-west and south-east, and
geochemistry and RAB drilling indicate additional potential to the south, along the southern
margin of the granite.

Most drill intersections at Busolwa are low to moderate grade including: 28m at 2.32g/t Au from
92-120m (end of hole) in MWBR 118; 23m at 3.26g/t Au from 6-29m in MWMR 24; 25m at
2.63g/t Au from 12-37m in MWMR 28; and 13m at 2.77g/t Au from 20-33m in MWMR 132.
However, many higher grade zones have also been intersected including: 18m at 155.65g/t Au
(free gold, cut to 8.32g/t Au after applying a 15g/t Au top-cut) from 9-21m in MWBR 75; 7m at
115.4g/t Au (free gold, cut to 12.81g/t Au) from 22-29m in MWBR 157; 26m at 6.07g/t Au from
19-45m in MWBR 112; 12m at 15.37g/t Au (cut to 6.70g/t Au) from 4-16m in MWBR 135; and
18m at 5.54g/t Au from 10-28m in MWBR 183.

At the Main Reef prospect shallow RAB and RC drilling tested the old mine site and adjacent
artisanal workings. High grade quartz sulphide veins, similar to the vein mined to a depth of
210m from the Main Reef shaft, have been intersected up to 700m to the east. These
quartz veins are associated with carbonate alteration in shear zones within mafic volcanics and
granite and higher grade shoots have average grades ranging from 11-23g/t Au. Intersections
include 3m at 55.9g/t Au in MWMR 40; 4m at 30.50g/t Au in MWMP 4 and 14m at 18.32g/t Au
in MWMR 5. There is also some potential for open cut mineralisation, as indicated by the
intersection of 19m at 2.26g/t Au from 16-35m in MWMR 28.

At the Illilika prospect initial work included four angled RC holes beneath underground workings
at two locations 200m apart. All four holes recorded significant mineralisation at depth with
oxidation down to 70m. Three of these holes intersected 8-12m of transported laterite with an
average grade of 2.68g/t Au over 9.6m. Deeper intersections, including 6m at 3.10g/t Au from
57-63m in MWIR2 and 4m at 3.15g/t Au from 51-55m in MWIR1, relate to steeply dipping
narrow quartz veins within a 30m wide shear zone in mafic volcanics. Artisanal workings
indicate extensive mining of laterite down slope for 250m to the south.

As at Buhemba, future exploration at the Mawe Meru project will aim to define mineral
resources of at least 1 million ounces of gold, with emphasis on low cost, open-cut
mineralisation. Work will include additional drilling and geological studies at the Busolwa
prospect prior to an initial resource estimate. In addition, follow up drilling of other prospects
and further assessment of untested geological and geochemical targets will be carried out. It is
also planned to expand detailed mapping and soil geochemistry programs to cover the remainder
of the PL.
Other Projects

From an exploration headquarters at Mwanza in the heart of the Lake Victoria Goldfields the
Company has also directed considerable effort since mid-1996 to initial exploration of another 16
licences. A basic approach of geological and regolith mapping, gridding and soil sampling, and
stream sediment and rock chip sampling, with support from photo interpretation and remote
sensing expertise has yielded some significant results.

Regional studies of gold mineralisation in Tanzania have established criteria to guide selection of
new target areas for exploration. In addition to its work on the established projects the Company
is actively seeking new opportunities through farm-ins and licence applications.

Northern Lake Victoria Goldfields

TGO is earning 75% of the 150km² Maji Moto prospecting licence (PL412/96) located 25km
north-east of Buhemba. The licence includes old gold workings in proximity to several
kilometres of concealed, highly prospective granite-greenstone contact. A north-east striking
zone of workings was tested over a length of 400m by 30 RC holes (total of 1,978m) and gold
mineralisation was intersected in steeply dipping shear zones and quartz veins in mafic volcanics
and granite. Notable intersections include: 5m at 28.50g/t Au from 37-42m in MMR 13; 1m at
36.96g/t Au from 28-29m in MWMR 10; 1m at 33.76g/t Au from 28-29 in MMR 6; and 7m at
2.96g/t Au from 38-45m in MMR 2.

The narrow and discontinuous nature of drill intersections did not support previous claims of
broad zones of medium grade mineralisation, made by the UNDP on the basis of surface
sampling. Therefore current exploration has been directed to the remainder of the licence to
identify more substantial resources that could enhance the economics of a treatment plant at
Buhemba. A high resolution aeromagnetic survey was completed and supported by
comprehensive mapping to identify priority targets for gold mineralisation. Geochemical
sampling of target zones commenced in August 1997 and several gold anomalies have been
outlined for follow up.

TGO has acquired 90% interest in seven other licences in the northern Lake Victoria Goldfields,
and through farm-ins and application for new ground is actively expanding its presence,
especially within trucking distance of Buhemba.

At the Kiabakari Southwest licence (PL407/96) a short program of aircore drilling (417m)
partially tested the Suguti shear zone without success. However, exploration elsewhere in this
licence located artisanal workings in granitoid rocks along a 1.5km zone with rock chip values up
to 14.0g/t Au. Soil sampling on a 100m grid defined a strong anomaly with values up to 9.6g/t
Au and detailed mapping and sampling has been carried out to identify possible controls for this
unusual style of mineralisation. Other geochemical anomalies have been identified within the
licence, particularly at Kiwasi where follow-up soil sampling on a 100m grid has defined a 1km
long east-west trending anomaly with values up to 65ppb Au. This anomaly is closely associated
with the Kiwasi shear and is open to the south.

Exploration in licences at Kibara East (PL323/95) and Kibara West (PL324/95) on a greenstone
belt 75 km southwest of Buhemba has provided encouragement with rock chip values up to
10.8g/t Au occurring within significant geochemical anomalies along strike from artisanal
workings. In Kibara East, intermittent geochemical anomalies, with values up to 1.18g/t Au,
occur in 400m grid sampling of a north-west striking contact between mafic and sedimentary
rocks that is largely concealed. The Kibara licences, together with the Kuriwirwi Hills licence
(PL378/96), contiguous to the west of Kibara West, substantially cover the greenstone belt which
warrants more detailed exploration.

Extensive geochemical sampling programs have also been undertaken in the Ngasamo-
Wamangola licence (RL76/96) on another greenstone belt 75 km south of Buhemba. Along the
“western shear zone” which hosts the old Ngasamo gold mine an area of more than 30km² has
been covered on a 400m x 100m grid. A 2km long anomaly, with values up to 464ppb Au, has
been defined along strike from the old mine. This zone is associated with a mafic-ultramafic
contact and anomalous values ( 10ppb Au) occur in proximity to the same stratigraphic contact
in the eastern sector of the licence. In addition to gold, ultramafic rocks within the licence are
being evaluated for their nickel sulphide potential and anomalous nickel and copper values are
currently being assessed. Reconnaissance work in the adjacent Beramongo Hills licence
(RL74/96) has identified target areas and detailed work is scheduled to commence in 1998.

Detailed mapping of the Mara River licence (PL231/94) confirmed the presence of a layered
intrusion with potential for platinum group precious metals in the basal section. In addition, rock
chip sampling defined occurrence of auriferous quartz veins up to 2m thick and 1km long with
values up to 4.9g/t Au.

Southern Lake Victoria Goldfields

In addition to Mawe Meru, the most advanced TGO project in the southern half of the Lake
Victoria Goldfields, gold exploration is current in 90% owned licences at Busingwa (RL50/94),
Shagenge (PL15/92), Kisuge Hills (PL19/92), Igogo Hills (PL20/92) and Semu River (RL45/94),
and also in a joint venture with AAC in the Geita Project.

Anomalous gold values up to 35ppb Au were identified in reconnaissance geochemical sampling

in the Busingwa reconnaissance licence and two prospecting licences have since been granted in
the area. Geochemical sampling and mapping at the Shagenge licence has confirmed the Kiloleli
gold anomaly where rock chip sampling has now defined values  100ppb Au in a zone 800m
long. Additional anomalies with peak values up to 620ppb Au have been defined to the north
and south of Kiloleli. At Kisuge Hills a weak soil anomaly with peak values of 18ppb Au has
been defined over a length of 1.25km and a width of 250m by reconnaissance soil sampling. The
anomaly is open to the northwest. The exploration of Igogo Hills and Semu River has not
provided encouragement so far.

Geita Project

The Geita project is based on three contiguous prospecting licences, Imweru (PL237/94), Samena
I (PL226/94) and Samena II (PL227/94) with a total area of 400km². These licences are adjacent
to former gold mines and recent discoveries within the Geita greenstone belt. Following an
approach from AAC, the Company agreed to joint venture the licences to their Tanzanian
subsidiary, Anmercosa (Tanzania) Pty Ltd, on terms requiring payment of a fee of US$1.5
million, and exploration expenditure by Anmercosa of US$3.25 million, over three years to earn
a 60% interest. The Company is to be free carried to feasibility. Anmercosa commenced
exploration in August, 1996 with a systematic program of geological mapping, airborne and
ground geophysics, and soil sampling to generate targets for drill testing. Initial target evaluation
by RAB drilling has commenced, however no significant results have been reported to date.
LUPA GOLDFIELD
(Figure _ shows the locations of TGO Projects in the Lupa Goldfield, southwest
Tanzania)

Lupa Project

The Company holds six licences, totalling 1,108km², in the Lupa Goldfield in southwestern
Tanzania. This area is Tanzania’s second most important goldfield, with past production of
about 25 tonnes of gold. It has remained largely untouched by modern exploration for almost 40
years following closure of the Saza mine in 1956. The Saza licence (PL183/94), Ilunga Hills
(PL173/94), Malambang’ombe (PL177/94) and Lake Rukwa licence (RL26/94) are in the general
vicinity of the Saza mine in the western part of the Lupa Goldfield. The two other licences,
Sangambi (PL252/94) and Itumba (RL44/94), are in the eastern part of the Goldfield.

The Lupa Goldfield covers an area of about 3,500km², which is dominated by Proterozoic
granitoids and gneisses. This area includes numerous intrusions and enclaves of mafic and
ultramafic rocks and banded iron formations, and the possibility that they may be remnant
Archaean greenstone belts enhances its potential. Past mining activity has concentrated on high
grade quartz reefs, but exploration by the Company has focused on the potential for bulk
mineable, shear-hosted and stockwork gold deposits. Geological mapping and geochemistry
have identified numerous prospects and geochemical anomalies. These occur in all six licences,
but particularly in proximity to the important east-northeast trending Saza shear zone.

In June 1997, agreement was reached with the AAC subsidiary, Anmercosa Exploration
(Tanzania) Limited for that company to earn a 60% interest in three of the six properties on terms
requiring payment of a fee of US$1.0 million and exploration expenditure of US$6.25 million
over a four year period. The Company is to be free carried to feasibility.

In Zambia, alternatives for development of the Munali Nickel sulphide deposit were assessed,
and opportunities for copper exploration were investigated.