AuKing Mining Ltd (ASX:AKN) will continue with its Manyoni exploration and drilling program in March despite action from the Tanzanian Mining Commission impacting two Manyoni Prospecting Licences (PLs).
CEO Paul Williams said that the action of the Commission to revoke the two PLs was taken without prior notice and, based on AuKing’s legal advice, contrary to the provisions of their Mining Act.
While AuKing intends to work constructively with the Commission, this matter will now need to be resolved pursuant to an appeal that AuKing will urgently file with the Minister of Minerals in Tanzania.
Williams said: “While the Commission’s decision is a surprise and disappointing, our remaining Manyoni licence holdings are in good standing and this presents us with an opportunity to focus more on areas where there is significant potential to expand existing resources at Manyoni as part of our proposed drilling program.
“The recent report from H&S Consultants provides additional independent consensus that our proposed drilling can significantly extend the existing Manyoni uranium resource from these areas.”
Background
AuKing was granted 12 PLs in Tanzania in January 2023, including 5 PLs that comprise the Manyoni uranium project.
Almost all of the historical resource estimate for Manyoni was comprised within those 5 PLs.
Notices were then received by AuKing on 20 February 2023 from the Commission indicating that 2 of these 5 licences were to be revoked due to a flexicadastre system malfunction that led to the double allocation of mineral rights over the same areas.
In response to these notices, AuKing took action the next morning to obtain a trading halt with the ASX, pending clarification of the matter.
A significant portion of the historical Manyoni resource estimate is contained within the 2 PLs that are the subject of revocation.
Double allocation of mineral rights
AuKing has spent the past few days identifying the holder of the double allocation of mineral rights.
Another Tanzanian company was issued PLs on 3 February 2023 over the exact same areas as AuKing’s PLs.
Discussions with representatives in Australia of this other company to resolve the matter have proven unsuccessful.
In the meantime, AuKing’s local legal advisors in Tanzania have prepared an appeal to the Minister of Minerals under the relevant provisions of the Mining Act 2010 and will file this appeal immediately.
The legal advice AuKing has received is that there are strong grounds to assert that various provisions of the Mining Act have not been followed in this matter.
At this stage, there is no indication as to how long the appeal process will take nor of the final outcome.
However, despite this situation, AuKing remains committed to making a significant contribution to the Tanzanian mining sector and intends to work cooperatively with the Commission.
Manyoni drilling program
In 2010, Hellman & Schofield prepared a resource estimate for Manyoni that defined a 92 million tonnes resource at a 100ppm cut-off, containing 29 million pounds of uranium (U3O8).
As part of the proposed exploration and drilling program, AuKing engaged H&S Consultants (the successor firm of Hellman & Schofield) to undertake a detailed review of the historical data that supported their 2010 MRE.
H&S Consultants identified areas across the known uranium resources at Manyoni that have not been explored to any detail (or at all) and provide the potential for significant extension of the known uranium resources at Manyoni.
The PL areas at Manyoni that are the subject of revocation have already been well-defined by significant historical exploration and drilling.
Accordingly, AuKing now has an opportunity to focus its proposed exploration and drilling program on the other, less-explored areas at Manyoni where there is greater potential resource extension areas.
T2 Placement
At AuKing’s EGM on 16 December 2022, shareholders approved the T2 placement comprising the issue of up to 21,260,000 shares at an issue price of 10 cents to raise $2.12 million.
Ven Capital is on track to complete this placement prior to the 16 March due date.
In addition, although he cannot participate in the placement (being a director), co-chairman Asimwe Kabunga has also committed to assist Ven Capital with the placement.