16/11/2007 - 13:07

Atomic subsidiary signs exploration deal with Tanzania

16/11/2007 - 13:07

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West Perth-based uranium explorer Atomic Resources Ltd's Tanzanian subsidiary has signed a memorandum of understanding with the National Development Corporation to explore two coal fields in southern Tanzania.

Atomic subsidiary signs exploration deal with Tanzania

West Perth-based uranium explorer Atomic Resources Ltd's Tanzanian subsidiary has signed a memorandum of understanding with the National Development Corporation to explore two coal fields in southern Tanzania.

Under the terms of the MOU, Atomic has a 90 day period to complete due diligence on the project concessions and to verify historical technical data.

On completion of a successful due diligence, Atomic subsidiary Pacific Corporation East Africa Ltd will enter into a joint venture agreement with the NDC - an agency of the Tanzanian government - with Atomic retaining 75 per cent interest throughout project development.

NDC will be free carried for 25 per cent through to production. PCEA has agreed that as part of the JV terms not less than $500,000 will be spent on the project areas within the first 24 months.

 

 

The full text of a company announcement is pasted below

Atomic Resources Limited (ASX Code: ATQ) ("Atomic") is pleased to announce that it has, through its Tanzanian registered subsidiary, Pacific Corporation East Africa Limited ("PCEA") entered into a Memorandum of Understanding ("MOU") with the National Development Corporation ("NDC") of Tanzania, to explore and develop the Mhukuru and Ngaka coal fields in southern Tanzania.

Under the terms of the MOU, Atomic has a 90 day period to complete due diligence on the project concessions and to verify historical technical data. On completion of a successful due diligence, PCEA will enter into a Joint Venture ("JV") agreement with the NDC, with Atomic retaining 75% interest throughout project development. NDC will be free carried for 25% through to production. PCEA has agreed that as part of the JV terms not less than $500,000 will be spent on the project areas within the first 24 months.

Whilst no JORC-compliant resources are currently available, there is abundant public literature available on the coalfields of Tanzania confirming the fields' have substantial potential tonnage .

In particular Mishala (1981)¹ completed a review of the Ngaka coalfield in 1981 (Mushaka web site reference ), whilst Stockley (1947)² has tabled the Mhukuru coalfield in his study of the New Coal Resources in Tanganika. ( Stockley web reference )

The coals are regarded as high calorific with low sulphur and moisture, and high ash content. Geologically, the coal seams lie within the Karoo sediments preserved within depressions in the Precambrian basement. Whilst the coalfields of Tanzania have been well known for over a century, until now they have never been fully developed or systemically explored using modern exploration techniques.

Executive Director Mr. Dave Holden said, "Given that we are in the Southern Tanzanian region exploring for uranium, this opportunity is a natural progression in the development of potentially substantial and significant energy resources. This coal resource will be vital to Tanzania's economic development and for the Company's growth.

Mr. Holden added, "It's still early days, however this deal is a tremendous opportunity for Atomic to expand its commitment to Tanzania and become a major coal producer in the country, with the potential to generate significant export earnings by selling coal to neighboring countries"

The first priority for Atomic is to compile the existing data, commence drilling and verify previous results and prove up a JORC complaint resource.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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