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In the heavily saturated sea of junior mining companies, the arrival of one particular
assemblage has been causing ripples of excitement amongst investors and explorers
alike. What can only be described as a truly thoroughbred spin-out, Tigray Resources
(TSX-V: TIG) is the brainchild of the uber successful Canaco Resources (TSX-V: CAN),
a company that made the stock price jump from $0.39 in 2009 to an impressive $6.45 in
2011 and now reigns over rapidly advancing exploration projects in Africa. Can Tigray
live up to the success of its makers? Word on the stock market street is yes.
The spin-out arrangement was designed to deliver greater value to shareholders by
unlocking the value of the Harvest Project, a copper-gold-silver VMS (volcanogenic
massive sulphide) property located 600 kilometres north-northwest of Addis Ababa in the
Tigray region of Ethiopia. Part of a joint-venture with Ezana Mining Development, the
project covers 362 square kilometres and consists of 6 concessions; Nefasit, Hamlo,
Terakimti, Adi Nebrid, Igub and Medri Felasi.
From a geological point of view, the property is nestled nicely in the southern extension
of the Arabian-Nubian tectonic assemblage that stretches southward from Eritrea. The
belt of rocks hosts a number of significant VMS mineral systems including Bisha and the
deposits of the Asmara district.
Harvest is now Tigray’s key property and, having officially established itself as a bonafide
TSX listed contender, the company is preparing to launch geological, geochemical and
geophysical profiling in a bid to establish targets for continued drill testing.
Prior to the spin-out, Canaco drilled 12 holes on the Terakimti and Nefasit concessions
as part of its due diligence process in acquiring the project. Of the 12 holes drilled, 11
contained significant mineralization along a strike length of 850 metres and identified a
favourable VMS mineralized horizon capped by an oxide gold zone. The highlight hole,
hole 10HTD003, returned 52.1 metres grading 4.10% copper, 1.55 grams per tonne gold
and 25.97 grams per tonne silver starting at a depth of 45.6 metres, including 23.7
metres at 7.30% copper, 1.88 grams per tonne gold and 21.88 grams per tonne silver.
These impressive results demonstrate that the geologic and surficial assemblage at
both Terakimti and Nefasit exhibit similar characteristics to those of the VMS
mineralizing systems identified in Eritrea. Similar discoveries have recently been made
along the Asmara VMS belt in the Arabian Nubian Shield including Debarwa, Emba
Derho and the Bisha deposit which boasts a massive 39 million metric tonnes of
relatively high-grade zinc, copper, gold and silver.
With a kick-start like that, it should come as no surprise that Tigray is geared up and
ready for action with an 11,000 metre first phase diamond drill program already
underway at Harvest and an additional 3,000 metres scheduled for follow up drilling.
Commenting on the spin-out and the diamond drill program, Tigray President and CEO
Andrew Lee Smith said: “We are excited to see Tigray come to trade and we believe it
represents a unique opportunity for investors to gain exposure to the emerging mineral
exploration sector in Ethiopia. Our first phase drill program at Harvest is now underway
at Terakimti where our due diligence last year led to the discovery of significant oxide
gold and primary VMS mineralisation and identified potential for supergene
mineralisation.”
Management
Standing as President and CEO of both Tigray and Canaco, Smith represents the driving
force behind Tigray’s potential and probable success; the Canaco Board of Directors.
A Professional Geologist with over 25 years of experience successfully exploring,
developing and operating North American base and precious metals mining and gem
projects, Smith holds a BSc in Earth Sciences from the University of Waterloo.
He received the Mining Entrepreneur of the Year Award in 1994 from the Quebec
Prospectors Association for his role in mine development with Aurizon and was also
named Outstanding Alumnus of 2009 by the Science Faculty of the University of
Waterloo for his contributions to mineral exploration. Not a bad résumé for Tigray’s head
honcho.
Vice President of Exploration is Jeff Heidema. Another Professional Geologist, Heidema
has worked with the Cominco, Teck Cominco and Teck exploration groups. He
predominantly specializes in VMS and Archean gold exploration and most recently was
involved with the Advanced Projects group, focused on defining near-mine exploration
targets and building value on key mine assets.
Dr. David Groves is Director of Project Development with numerous medals for research
under his belt, including the Silver Medal of the Society of Economic Geologists, the
Geological Association of Canada Medal and the Society for Geology Applied to Mineral
Deposits SGA-Newmont Gold Medal.
Rivalling Groves in the awards field is Senior Exploration Geologist Iain Groves.
Currently Senior Exploration Geologist with Canaco, True North Gems and Consulting
Geologist to AngoGold Ashanti, the second Mr. Groves has earned 7 awards including
the AusIMM Prize for Geology and the GSWA Award for Field Mapping.
Together with CFO Shannon Ross, Director of Business Development Nick Watters,
Director of IR Meghan Brown and Director of Corporate Communications Lingling Yang,
this stellar attroupement of industry experts has been working together since 2004 to
make Canaco the highly celebrated company that it is.
This is the team that discovered the Handeni Gold Project in the Handeni region of the
United Republic of Tanzania in 2009. In September of that year, Canaco was drilling on
the project’s Magambazi prospect. The very first hole drilled on the prospect proved to
be the discovery hole, intersecting 59 metres of 4.32 grams per tonne gold. Then came
hole 12 with 56 metres of 6.5 grams per tonne gold, essentially providing Canaco with
world class drill results.
A crucial factor in enabling the company to advance so successfully was a private
placement by a Chinese company called SinoTech Corporation Ltd. who took a 30%
stake in Canaco. A subsidiary of Sinotech Minerals Exploration Co. Ltd., a major
Chinese exploration and mine development company, Sinotech boasts mineral
exploration projects in mainland China and more than 10 countries worldwide.
SinoTech’s investment in and partnership with Canaco has been very beneficial to the
latter, bringing huge support in terms of technical resources and a compatible game plan
with respect to the development of projects in East Africa, such as the Harvest project
and, of course, the Tigray spin-out.
What made Canaco great will surely make Tigray great. At least, that’s the plan. In the
rollercoaster exploration world of planning, drilling, good results and bad, the future of a
young company is about as predictable as the weather in Vancouver. But considering
the high calibre management team, the delightful drill results already established with
hole 10HTD003 and the promise of mineral-rich Ethiopia, the future of Tigray is looking
bright, to say the least.
Ethiopian Evolution
Ethiopia is indeed a mineral-rich land, claiming gold as its main mineral export. Blessed
with an abundance of natural minerals and resources, the country revamped its mining
laws in the early 90s by introducing the Mining Proclamation and the Mining Tax
Proclamation in 1993. This was put into place to provide for a legal regulatory framework
to promote investment in mineral exploration and production in the country.
Additional amendment proclamations followed until 1996, essentially upgrading and
modernising the Ethiopian mining community, slowly but surely creating a muchimproved
investment climate for mining and transforming the country into a breeding
ground for eagerly advancing exploration companies.
When It Boils Down To It
Country politics aside, when it boils down to it; Tigray’s Harvest Project constitutes a
highly prospective land package for the discovery of a VMS deposit. Very little historical
exploration has been documented in the Harvest area and the ground has not been
subject to the recent modern exploration techniques that Tigray will be implementing.
With cash on hand totalling approximately $8 million and a respectable share price of
$1.62 as of morning on September 15th, now is the time to get in on what could be the
next big play in the ever evolving realm of Ethiopian mining.
Follow the company’s progress at www.tigray.ca
Disclosure: Resourcex Investor has purchased shares in Tigray Resources Inc. but no
fee was paid for the generation of this article.