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Accessibility, Climate, Local Resources, Infrastructure and Physiography

Access to the Luhala Property is via the main Mwanza – Shinyanga road, which is a single lane, good to excellent quality, asphalt highway.  Approximately 45 kms south of Mwanza, a dirt road from a junction at the settlement of Manawa, leads southwest to the town of Misasi.  The property has year round access, although seasonal winter rains, December to March, may result in flooding in low lying areas which are dominated by mbuga (black organic rich laustrine flood soils).  Most lowland areas are under active cultivation, corn, rice, beans and mixed crops, by subsistence farmers.  Low scrub and thorn bushes cover the small hills.  The area has been, for many years, deforested by local agricultural practices.

At Luhala, the mean elevation is approximately 1,200 m above sea level, with a series of small sub-rounded hills, rising up to one hundred metres above the surrounding plain.  These hills are typically formed by either resistive iron formations or felsic volcanic rocks.  Mafic volcanic rocks weather recessively and are typically only exposed in trenches through well formed laterite profiles.  Laterite development is extensive with brick-red laterites overlying weak mottled zones and saprolites at a depth of approximately 3-5 m’s.  Deep weathering penetrates 45 - 60 m’s vertically within the subsurface.

An enthusiastic and competent labor force is available through the surrounding villages, and local people have been routinely hired during the trenching, drilling and soil sampling programs conducted on this property.  However, no other significant infrastructure is available.

History

Luhala has had a significantly more protracted exploration history than Lunguya, beginning with the initial exploration by the then Tanganyikan Geological Survey in 1947.  The exploration history of Luhala may be summarized as:

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Geology

Luhala is found within the eastern portion of the Buhungukira Belt, a local place name assigned to one to the eight greenstone belts in the Lake Victoria District.  These rocks are believed to be the eastern continuation of the Geita  Greenstone Belt and consist of dominantly Upper Nyanzian rock sequences.

In the Luhala area, the predominant structural grain is dominated by an early deformational event which has deformed all supracrustal rocks into tight, south to southwest plunging, west overturned, synforms and antiforms.  The short limbs of these folds may have east-west strikes and modest, 40 degree south dips. The long limbs of these folds have north to northeast strikes and generally much steeper, 60 – 80 degree, and east dips.

At Luhala, three principal mineralized zones have been identified. These include Kisunge Hill, Shilalo South, and Shilalo West.  All of the three principal mineralized areas are linked by a common southwest plunging antiform, the limbs of which are separated by 500 to 800 m’s and converge just south of Line 6200 E and 3800 N.  Mineralization to Kisunge Hill is associated with a chert – felsic volcanic contact.  As Shilalo South, structurally controlled gold mineralization closely tracks the position of a massive to locally well-bedded chert or cherty iron formation.  The results of diamond drilling in Shilalo West strongly outline the importance of the felsic volcanic - chert – structural sites and gold association.  For example, borehole LSD – 08A is collared in the hangingwall to the Shilalo West mineralized zone, traverses the host rhyolite-chert lithology, and terminates in the footwall.  This borehole intersected significant gold mineralization of 3.55 g/t Au over 5 m near the hangingwall contact of the felsic volcanic rocks, and is mineralized repeatedly at over one gram ranges throughout much of the felsic host interval, which in this borehole is over 35 metres thick.

The felsic volcanic rock package at Shilalo West once again presents an excellent structural site for the development of dilatant sites and gold mineralization.  As at Shilalo South, a well defined planar, brittle-ductile structural zone was not identified at Shilalo West.  Gold distribution is likely related to volumes of extensional and shear extensional veinlets, which are developed within the felsic volcanic rocks at or near, the felsic volcanic “red tuff” contact.

Exploration

Drilling with the Company’s combination RC/RAB drill commenced in October 2005.  In December 2005, the Company announced initial results from a 29 hole RC/RAB drilling program at Luhala that significantly expanded the resource potential on the property.   During this phase of drilling, a specific emphasis was placed on determining the structural controls for the higher grade mineralization, producing a 3-D model of the mineralization for follow-up in 2006.

A Phase 4 drill program was initiated at Luhala in February 2006, with the first results reported shortly thereafter in March. The drill program included 40 RC holes, representing some 2,519 metres of drilling within the Kisunge Central, West, Northeast and Southeast Zones. The Kisunge Central and West Zones were found to combine to form the Kisunge Central Zone.  Drilling of the Kisunge East Zones confirmed the presence of a higher grade zone of rocks that extends from the Kisunge Northeast Zone to west of the Kisunge Southeast Zone. These rocks form a steeply plunging anti-clinorium, a regional fold (bend) structure that is composed of smaller folds. This whole zone was subsequently referred to as the Kisunge Main Zone.

Among the better results returned from the Kisunge Central Zone were 4.0 metres of 6.0 g/t and 5. 0 metres grading 5.18 g/t. Notable results from the Kisunge Main Zone included 7.0 metres averaging 6.83 g/t and 5.0 metres grading 5.18 g/t.

Results from the Phase 5 drill program were released in April 2006 and confirmed that the Kisunge Main Zone hosted anomalous gold values along a strike length of 1,200 metres, excluding a zone some 200 metres wide where a barren dyke cut across the mineralized trend.  The holes in the Main Zone were designed to intersect and test the gold potential in the most prospective stratigraphic package (rock unit) at a shallow depth as

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no trenching had been conducted in this area before to establish near-surface mineral potential.  The best values from the Kisunge Main Zone in Phase 5 included 4.0 metres averaging 5.69 g/t along with 3 metres grading 3.29 g/t.   A Phase 6 drill program was completed in April 2006 and included 15 RC drill holes representing some 986 metres of drilling. All the RC holes were drilled in the Main Zone as no access was available to further test the Kiginga anomaly due to heavy rainfall. Three holes were drilled on the eastern limb of the Main Zone and 12 holes on the southern limb. Among the better values reported were: 3.0 metres of 2.50 g/t, 2.0 metres grading 2.39 g/t and 6.0 metres averaging 2.35 g/t.  A Phase 7 drill program was completed in August 2006 with the results reported immediately after the company’s fiscal year end. This particular phase consisted of nine diamond drill holes aggregating some 991 metres, all of which tested the eastern limb of the Kisunge Main Zone.

Because diamond drilling produces a cylindrical core sample, invaluable structural information was obtained during this program which showed the gold deposit to have a shallow dip that will require further RC drilling for definition purposes. Some of the most notable results from this program included 3.0 metres @ 7.89 g/t, 2.44 metres averaging 3.90 g/t and 1.44 metres @ 10.95 g/t.

The Company has incurred total net costs (after any recoveries) of $4,079,789 on the Luhala Property  to August 31, 2006.

Mineralization

At Luhala, gold mineralization is associated with zones of diffuse silicification, localized around small cm and mm scale fractures within competent chert and felsic volcanic rock units.  Major discordant vein structures are not identified and planar high strain zones are absent.  

No specific gravity data have been calculated for any of the rocks cored in these intervals and without strong cross sectional control, no reliable resource estimates for any of the principal mineralized zones at Kisunge, Shilalo South and Shilalo West may be calculated.

Drilling

Drilling programs were completed on the Luhala prospecting license in 2001, consisting of nine diamond drill holes, totaling 1,865 metres with an average depth of 207 metres.  The holes were planned along the three best RAB section lines (7400E, 7600E and 8000E) on Kisunge Hill, as well as some testing of a lower ranked target on the Shilalo South.  Some gold mineralization was encountered, including 4.3 metres at 1.84 g/t, 8.5 metres at 1.23 g/t, and 14.4 metres at 5.72 g/t, using a 1g/t cut-off.  Diamond drilling has shown that these gold zones are not steep.  The distribution of gold at Kisunge would appear to be flat to moderately dipping.  

No drilling programs were conducted during 2002 or 2003 on the Luhala Property, but a further US$100,000 in RC drilling was performed during the 2004 exploration season.  The Kisunge hill area was targeted where trenching in 2001 identified numerous zones of surface mineralization.

In March-April, 2004, old trenches from L7400E to L7600E as well as the trench on L8000E were cleaned to expose the floor of the trench for remapping. Four new trenches were excavated, the first along L7650E. The remaining three trenches were excavated along E-W lines to determine if N-S structures (similar to that shown at Kisunge outlier) might have a determining control on gold mineralization at Kisunge hill.

As detailed above under Exploration, RC/RAB and diamond drilling programs continued on the Luhala property throughout fiscal 2006.

THE LUHALA PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY PROPOSED EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.

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Lunguya Project Area

Property Description and Location

The Lunguya Property is located in the Kahama District of Tanzania (see property location map) , and the Company’s interest therein is held indirectly through Tanzam.  The Lunguya Property is situated in the Lake Victoria Greenstone Belts, approximately 100 kms by air to the southwest of Mwanza and about 15 kms south of  Bulyanhulu.  The Lunguya Property consists of eight (8)  prospecting licenses (namely, the Lunguya 1766/01 and 2828/04, Lunguya East 1887/02 and 3273/05, Shilela North 2059/02 and 4074/06, Shilela  2472/04 and Lunguya West PL 2193/03).  These prospecting licenses are in good standing with respect to required filings and payments with the Government of Tanzania.

With respect to Lunguya PL 1766/02, in January, 2003, a Shareholder’s Agreement was entered into wherein a new company, Lunguya Mining Company Limited (“LMC”), was created to form a joint venture between Northern Mining Consultancy Company Limited (“NMCCL”), Tanzam and LMC.  Tanzam has a 60% shareholding and NMCCL has the remaining 40% shareholding in LMC.

The Lunguya Property covers an area of 323 square kilometers.  There are no work requirements, and property payments on each of licenses are as follows:

* First renewal annual rental fees = US$30/sq.km.

Through prospecting and mining option agreements, the Company has options to acquire interests ranging from 60% to 75% in the eight (8)  licenses.  To maintain the options, the Company is required to make certain expenditures and fund all exploration costs of the properties.  During the fiscal year ended August 31, 2003, the Company abandoned one of the licenses, and wrote-off $35,342 in costs deferred to such license.  There are no royalties to the original license holder.  At Shilela North, through a Prospecting and Mining Option Agreement signed by Tanzam dated June 25, 1999, the Company has a right to obtain a 70% working interest in this project and no royalties are required.  The payment schedule is identical at Shilela.  At Lunguya East, the Company can earn up to a 70% interest and no royalty is required.  For PL 1990/02, through a Prospecting and Mining Option Agreement dated June 10, 1999, the Company can earn a right to obtain a 75% working interest in this project and no royalty is required; an initial payment of US$50,000 was made and no annual payments are required.

Internal to the Lunguya prospecting license (1766/01) is a small approximately 1.0 square kilometre primary mining license (“PML”).  The PML is currently held by Mr. Joseph Magunila who is exploiting the Nyamakwenge Reefs.  Negotiations for control and the validity of this license is currently under discussion with

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relevant private and government third parties.  Portions of the currently known veins at Lunguya and some of the RC and Lunguya diamond drilling, conducted by the Company in 2002, lie within this mining license.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Lunguya Property can be reached by plane from Mwanza to an airstrip accommodating Bulyanhuylu or by road via Geita up to the Bulyanhulu/Kahama road intersection. From Kahama, the property is located approximately 8 kms to the south, toward Lunguya village. Secondary roads and trails traverse the property. The Nyamakwenge Reef, located in the northeastern part of the property, can be accessed using a 12 kms dirt tract passing to the north of the property.  Climate and elevation are similar to the Luhala Property.

Very little outcrop (less than 1%) has been identified at Lunguya.  The entire property is flat and covered largely by granitic sands and grey orange laterities derived from granitic sources.  Like Luhala, Lunguya is actively cultivated, but also is being actively mined by a few score artisanal miners along the trend of the Nyamakwenge Reefs.  No significant infrastructure, power or water is available on site.  However, the entire infrastructure of the region including electricity, air transport, health clinics, schools, and improved road networks, have been greatly improved due to the proximity to Barrick’s Bulyanhulu mine, some 20 kms to the north.

History

Exploration in the Lunguya area has had a much briefer history than the exploration of the Luhala area.  Reconnaissance overviews of this area are documented, but no significant historical exploration activities are known to the Company.  The license was acquired by the Company in 2001 and a program of bulk leach extractable gold (BLEG) sampling, geological mapping, rock sampling, reverse circulation (RC) and diamond drilling was initiated.

Geology

The very limited outcrop exposures on the Lunguya concession necessitate development of a geological and interpretive environment largely based on geophysical interpretations.

Regionally, Lunguya is located near the eastern terminus of the inner volcanic arc, lower Nyanzian, of the Sukumaland Greenstone belt.  The succession is dominated by tholeiitic volcanic rocks containing lesser felsic tuffaceous rocks and  argillaceous horizons cut by thin quartz porphyry dykes and sills.  The thick, banded iron formation and felsic flows characteristic of the outer arc Upper Nyanzian sequence are absent. Most of the map scale granite – greenstone contacts strike north-south.  No information is available with respect to the orientation of sub-surface contacts.

At Lunguya, all currently known, auriferous structural zones track at an oblique angle, the eastern granodiorite-mafic volcanic contact.  Auriferous veins strike at 020 ° to 030 ° with the dominant intrusive volcanic contact trending at approximately 360 ° .  On the property scale, two 330 ° trending fault  structures are interpreted to offset the Lunguya vein into two fault repeated vein segments, having strike lengths of  approximately 180 and 300 m.  A few score artisanal miners have exploited these veins to a depth not exceeding 30 vertical m’s subsurface. A second set of auriferous reefs, the Nyikoboko Reefs, are located 12 kilometres to the south. This area is associated with a smaller set of largely inactive artisanal dumps and workings.

Based on the aeromagnetic data a new model has been proposed whereby a large NS trending shear zone is believed to exist below a thick black cotton soil (mbuga) cover. The thin veins associated with the Nyikoboko and Nyamakwengwe reefs probably represent secondary structures from the main shear. This idea has been tested using biogeochemistry and results are pending.

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Exploration

During the 2005 exploration period, an auger drilling program was initiated on the Lunguya project area to test various anomalies reported in previous exploration programs. The aim of this particular program was to start testing some of the less attractive RAB drill targets while waiting the arrival of the drill rig in Mwanza.  The Company carried out limited exploration in 2005 undertaking regional biogeochemical (BGC) surveys across the entire Project area.

Limited exploration activities were carried out on the Lunguya property during fiscal 2006.  The greater portion of the shear zone is covered by mbuga, and to test the idea biogeochemistry was conducted in 2003 over the mbuga on a 400m x 50m grid system where some 2,291 samples were collected. Abundant one point gold anomalies with pathfinder support have been identified. These will be tested with IP in the 2007 dry season.

The Company has deferred total net costs (after any recoveries and write offs) of $2,826,034 on the Lunguya Property to August 31, 2006.  

Mineralization

Lunguya is a mineralized brittle ductile strain zone, developing internal to a major granite-greenstone contact. Gold is associated with one fault offset vein which is likely broken into two segments, the Western and Eastern reefs.  Lesser veins are also present.  Initial sampling of artisanal vein waste dumps indicated the presence of well mineralized dump samples.  The site contained greater than 200 of these small pits-shafts ranging from 1 to 20 metres deep.

Diamond drill and RC programs at Lunguya have demonstrated excellent geological continuity of the Nyamakwenge West and East Reefs but weaker continuity of grade.  The difficulty in obtaining representative gold grades from small core samples of vein material containing coarse particulate gold is a well documented phenomenon.  Significant assays obtained during the 2002 diamond drill program at Lunguya are summarized in Table 4 of the Luhala and Lunguya 2002 Report.  Widths in these boreholes are approximately true widths and the boreholes have been collared roughly perpendicular to the strike and dip of the mineralized structural zones.

Drilling

Two programs of drilling where initiated on the Lunguya property during 2002. This included a seven hole RC program totaling 535 metres completed in late August 2002.  A follow-up diamond drill program consisting of 1175 metres, in 18 boreholes was completed in November and December of 2002.

Core recovery measurements where made on site by geotechnician of the Company.  RC boreholes (LGRC 01 – 07) utilized the same grid system as the diamond drill program.  The location of all drill collars were marked with concrete monuments.  Drilling was concentrated on the Lunguya Reefs (11 boreholes) with three boreholes completed on the Nyikoboko Reefs.  A series of geological cross-sections and plans (Figures 10 to Figure 18 in the Luhala and Lunguya 2002 Report), summarize the results of these programs.  Both RC and diamond drill data are combined on these sections.  Drill collar locations for 12 diamond holes and 7 RC holes on the Nyamakwenge Reefs are shown on Figure 9 of the Luhala and Lunguya 2002 Report.  Drill logs for diamond drill holes are compiled on Appendix III and for RC holes in Appendix IV of the Luhala and Lunguya 2002 Report.  Assay results for diamond drill holes are compiled in Appendix V and RC assay data in Appendix VI of the Luhala and Lunguya 2002 Report.

THE LUNGUYA PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.

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Tulawaka Project Area

The Tulawaka Project is located in the Biharamulo District of Kagera Region of Tanzania and is approximately 160 kilometers west-southwest of Mwanza.  The Tulawaka Project consists of nine (9) prospecting licenses, including six (6) licenses held through Tanzam.   These prospecting licenses are in good standing with respect to required filings and payments with the Government of Tanzania.  The Company has incurred $955,269 in total costs on the Tulawaka Project to August 31, 2006.  Two of the Tulawaka prospecting licences are under option to MDN.  

The Tulawaka Project covers an area of approximately 297 square kilometers.  The property lies on an east-west magnetic trend, between the Kakindu gold discovery (Ashanti) and the Tuluwaka gold discovery (Pangea).  RAB (rotary air blast) drilling on the Mnekezi property intersected mineralized chert sequences which included intersections of 5 meters @ 0.26 grams/tonne gold, 3 meters @ 0.24 grams/tonne gold and 1 meter @ 0.37 grams/tonne gold.  Much of this project has been joint ventured to MDN.

MDN noted that the holes were drilled at 60° to the horizontal and were sited “heel-to-toe” on the drill fences to ensure they completely overlapped.  Target depth was 70 metres and the drill fences were spaced approximately 150 metres apart.  The drilling employed RAB and RC techniques.  

The discovery area is located approximately 15 kilometres from the Tulawaka Gold Mine (Barrick 70% - MDN 30%) and extends for a strike distance of approximately 0.4 kilometres and across a width of 0.3 kilometres. It was tested initially by four drill fences comprising 23 drill holes for a total of 1,475 metres. MDN reported that the target evaluated in the drill program was previously unknown and still remains open along strike and at depth.  According to MDN, a follow up drilling program is being arranged in order to further investigate the gold mineralization that has just been discovered and to probe two additional targets in other nearby Prospecting Licenses.  The recent program tested three targets, two of which revealed significant gold intersections as reported above. Located about 10 kilometres from an earlier discovery made by MDN in the region, MDN describes the latest find as “an entirely different gold occurrence.”  MDN said “both gold discoveries are interpreted as being associated with shear zones that are close to the contact of volcanic and granitic rocks, and both remain open on strike and at depth. We are confident that yet more significant gold occurrences will be found in this region, which has remained virtually unexplored until now”.

Samples from the MDN drill program were prepared and analyzed by Humac Laboratories in Tanzania. The anomalous results were subsequently independently checked by the ALS Chemex laboratory in South Africa. The drilling program was carried out under the direction of Geologist Brian Lloyd, supervised by Carlos Bertoni, P.Geo., a Qualified Person under NI 43-101.

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In October 2005, MDN announced a significant gold discovery on a Prospecting License (PL) held under option from the Company in the Tulawaka region of Tanzania.  In March 2006, MDN announced assay results from the Isozibi gold discovery on PL2182/03 which is located about 17 kilometres northwest of the Tulawaka gold mine’s process plant. The discovery is known to extend for approximately one kilometre along strike and across a width of 0.9 kilometres. This previously unknown gold occurrence is associated with fracture zones in iron formations, a particularly attractive environment for the emplacement of gold deposits.  The discovery was tested by 26 RC drill holes for a total of 2,582 metres. Among the most significant drill intersections from this initial drill program were 2.0 metres averaging 4.4 g/t and 1.0 metre grading 3.25 g/t.

On November 15, 2006, MDN announced significant assay results from the RC drill program they carried out on the Viyonza Zone, which includes the Nyantimba license optioned from the Company.

THE TULAWAKA PROPERTY IS WITHOUT KNOWN MINERAL RESERVES AND ANY EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.

Lake Victoria Goldfield Properties

The following discussion regarding the Lake Victoria Goldfield Properties below is summarized in part  from a technical report prepared in accordance with the requirements of NI 43-101F dated March 21, 2002 entitled, “Project Technical Review on 52 Prospecting Licenses, Lake Victoria Goldfields Tanzania” by Stephen R. McMullan, P. Geo. of  Poseidon Geophysics (Pty) Ltd. (the “52 PL Report”).  The reader is referred to the complete text of the 52 PL Report, which is available at www.sedar.com , filed on March 28, 2002 under the heading, “Technical Reports”.

Property Description and Location

Tanzam, a mineral investment company wholly-owned by the Company, currently holds various interests in 121 prospecting licenses in the Lake Victoria Goldfields Belts of north-western Tanzania (the “LVGB”) in order to explore for economic mineral deposits.

Tanzam engaged Geodass (Pty) Limited of Johannesburg, South Africa (now Fugro Airborne Surveys (Pty) Limited) to undertake and manage an integrated mineral exploration program in the LVGB in August 1999. The exploration program was designed primarily to explore for gold mineralisation, without bias for mode of occurrence. Other commodities including base metals, diamonds and industrial minerals were also considered and suitable exploration methods were adopted for a multi-commodity approach.

As of the date hereof, Tanzam holds interests in the following licenses:

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As of the date hereof, Tancan holds interests in the following prospecting licenses:

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The total land area currently held under license is approximately 10,762 km ² .

History

Prior to Tanzam’s acquisition of the original fifty-two prospecting licenses (“PL”), little systematic work using modern exploration methods had been undertaken on the licenses. Tanzam acquired the licenses through negotiation with local vendors and prospectors, and by direct application to the Geological Survey (Madini), within the Mineral Resources Department of the Ministry of Water, Energy and Minerals of Tanzania.

Tanzam’s interest in the prospecting licenses is variable, depending on the agreements with the individual vendors. However, it is common to all agreements with the vendors that Tanzam has exclusive rights to sell the project to a third party without restraint. Compensation to the vendors remains the responsibility of Tanzam.

Tanzam has granted to BEAL an option to acquire the total rights, titles and interests held by Tanzam in the following prospecting license:

PL 2374/03

If such option is exercised, Tanzam is entitled to (i) certain payments after the Commercial Production Date (as defined) with respect to the first mine constructed by BEAL on any property covered by the license; and (ii) a 1.5% net smelter return (which may, in certain circumstances, be reduced).  

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The Company has deferred total net costs of $20,356,725 on all of the Lake Victoria Goldfields Properties to August 31, 2006.

Mineralisation

Lake Victoria Goldfields Belt

The Lake Victoria Goldfields have produced the greatest proportion of Tanzania’s mineral wealth and are still the most fertile and prospective for gold exploration.  Ninety percent of Tanzania’s gold production to 1991 had come from the district and new production is likely.  Significant gold resources have been discovered in the Lake Victoria Goldfields in the last decade by other third parties.

Artisanal Gold Mining

Official estimates indicate that artisanal gold mining in Tanzania produces 8 to 15 tonnes of gold per annum. Black market dealers have previously purchased most of this production, but Meremeta (a state-owned gold company) has set up regional buying centres to capture most of this production. The net benefit is both to the State in gaining foreign currency, and to the artisanal miners who can sell gold at set prices based on world commodity markets.

Historically, artisanal miners have only operated on a cash basis, i.e. where the gold grade was less than approximately 40g/t, the artisanals could not profitably mine the ore.  Artisanals actively explored the Lake Victoria Goldfields, and have discovered several significant deposits that are currently being developed commercially by other mining companies.

Geology

Tanzania is underlain by the Tanzanian Craton, a crustal block of predominately Archaean (>2,500 Ma) rocks surrounded and overlain by younger sediments and mobile belts.  It is one of the core blocks of Africa, and is essentially a continuation of the Congo Craton.

The Lake Victoria Goldfields consist of a granite greenstone terrain that extends northwards into SW Kenya.  The internal stratigraphy of the greenstone belts is reasonably well constrained.  It consists of a lower, essentially mafic, volcanic unit in which ultramafic rocks are rare, overlain by chemical and classic sediments and then felsic volcanics.  This assemblage is called the Nyanzian Group.  The Nyanzian Group is unconformably overlain by a classic sedimentary sequence, also Archean, known as the Kavirondian Group.  These sediments contain clasts of all Nyanzian lithogies, some of which appear to have been deformed before erosion.  In addition they contain debris of some granitoids.  However, the main period of granitoid emplacement post-dates the Kavirondian.  Although there was early tectonism, the main pervasive deformation post-dates the bulk of the granites, imparting a foliation to all these lithogies.  Some Archaean granitoids of the Belt appear to pot-date this foliation.  Further discussion on the regional and local geology is set out above, under the section on “Geology” for the Itetemia Property.

Exploration

Kibara Property

Following up on gold anomalies previously recognized by regional BLEG sampling and on high copper and gold values from one grab sample in March and June of 2004, field crews collected 12 grab samples, mostly as float, which were submitted for analysis. Many of these samples were noted in the field to have high copper concentrations.

In addition, a 100m x 100m grid was established over the initial copper-gold anomaly and soil samples were collected for multi-element analysis. Assessment of this multi-element data is still in progress but maximum values of 0.198 ppm and 2760 ppm were observed for gold and copper respectively.  The preliminary grab

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sampling results from the Nyakona Hill area on its Kibara project in the Lake Victoria goldfields of northwest Tanzania yielded the following assay results:

All rock samples were analyzed by fire assay with an ICP-MS finish, with ore grade values undergoing fire assay with an AA finish.  Soils were analyzed for gold by fire assay with an ICP-MS finish, and up to 34 elements using AR and ICP-AES.  All analyses were undertaken by ALS Chemex in Brisbane, Australia.

Significant assay results were received in March 2006 from a trenching program on the Company’s Kibara Gold Project, with 20 samples returning values exceeding 1.22 g/t gold. In addition to the gold values, encouraging copper and silver assay results were received from the trenching program. Seventeen samples returned values greater than 1% Cu, nine samples returned values greater than 5% Cu, and four values were above 10% Cu. Silver values ranged from detection levels to 87 g/t (2.5 oz/ton).

In 2006, the Company undertook a regional Biogeochemistry (BGC) program on a 400 metres x 200 metres grid system. Some 3,567 samples were collected and  submitted to Acme Vancouver for analysis. Results have been received and are currently being analyzed.

The Company has incurred total net costs (after any recoveries) of $162,775 on the Kibara Property  to August 31, 2006.  

Shinyanga Project

The Shinyanga license is situated amongst the scattered greenstone units of the Shinyanga greenstone belt some 25 kilometres  north of the Nzega greenstone belt. Principal rock types include meta-basalt with quartz veinlets, banded iron formation (BIF), granite and diabase dykes. Greenstone cover is estimated at 50% with the balance comprising granitic rocks. There are also known kimberlite occurrences within this project area that could be prospective for diamonds.

In June 2005, drilling commenced on the Company’s 120 square kilometers Shinyanga Property in the southeastern portion of the Lake Victoria Greenstone Belt in Tanzania. Approximately 6,000 metres of rotary drilling was planned, comprising about 300 shallow holes.

Four trenches were excavated in September 2004 at Shinyanga directly beneath areas defined by anomalous quartz debris samples. The overall Shinyanga gold anomaly is at least 4 kilometres long by 1 kilometre wide and is open to the west where it disappears under overburden. A single trench at Shinyanga intersected an alternating sequence of meta-basalt and meta-diorite with a strong foliation and quartz veining along the contact zones.  The quartz veins are typically thin, being less than 20 centimetres, but they contain high

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grade gold intersections, with selected grab samples carrying up to 65 grams per tonne gold. As reported on November 10, 2004, re-sampling of the trench, taking true width channel samples along the best zone in the south-facing sidewall, returned the following intersections:

The license is situated amongst the scattered greenstone units of the Shinyanga greenstone belt, some 25 kilometres to the north of the Nzega greenstone belt. Principal rock types include meta-basalt with quartz veinlets, banded iron formation (BIF), granite and diabase dykes. Greenstone cover is estimated at 50% with the balance comprising granitic rocks. There are also known kimberlite occurrences within this project area that could be prospective for diamonds.

During the period July-August 2005, Rotary Air Blast (RAB) drilling in the Shinyanga Project area succeeded in identifying a north-westerly trending zone of gold mineralization along three drill fences.  This trend is supported by anomalous gold in soil values and a single anomalous biogeochem value.  The gold trend identified by the drilling follows the trend of a prominent depression that could be interpreted as a shear/fault zone, which appears to follow the regionally important trend direction that plays host to the Bulyanhulu gold mine.  Within the Shinyanga Project Area, RAB drilling was completed on the Manghongo PL and 107 RAB holes were drilled, totaling 2,188 metres.  In addition, seven reverse circulation (RC) holes were drilled, comprising 141 metres.  In August 2005, a total of 686 samples were submitted for gold analysis and two batches for multi-element analyses from BGC anomalies.

A follow-up RC program was completed in January 2006. Drilling was conducted over the Eastern and Central mineralized zones that gave the best RAB intersections. The drilling consisted of 16 drill holes aggregating 784 metres. In addition, 316 samples were collected and submitted to Humac Lab in Mwanza for gold analysis.  From the drilling it is evident that the Central Zone is conducive to the deposition of gold mineralization albeit of low grade. It appears that there are two zones of gold mineralization, one thick low grade zone and a thinner higher grade zone.

The Company has incurred total net costs (after any recoveries) of $108,998 on the Shinyanga Property to August 31, 2006.  

Kigosi Project

The Kigosi Property forms part of the greenschist-amphibolite facies metamorphic belts of the Kigosi-Miyabi Granite-Greenstone Terrain situated in the southwestern Sukumaland Greenstone Belt. The terrain is bounded to the south by the Kigosi-Haneti Granitoid Tectonic Zone of extensive granite intrusions and deep-seated lineaments.

The Project hosts gold mine workings that were discovered and have been worked on by local artisans for decades. Subsurface geology in these workings sub-crops intermittently along a strike length of at least 4.8-kilometres.  No exploration activities were performed on the Kigosi property during fiscal 2006.

Kanagele Project

In February 2005 heavy mineral analysis of sample material from the Kanegele project area returned

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mostly ilmenite diamond indicator minerals. In total, 15 ilmenite grains were picked from one sample site, the highest number collected from a single sampling point to date. The grains appear to be associated with nearby magnetic targets which should simplify follow-up work.  An auger drill program similar to that which was carried out on the Geita Project area was carried out in the Kanagele project area.  This program confirmed that several mineral indicator grains from this prospect had a kimberlite source, the principal host rock for diamonds.  Grab samples returned anomalous gold values from artisanal workings within Banded Iron Formation which are considered prospective for large tonnage mineral deposits.  Drilling commenced on the Shenda License in mid-August 2005 and was completed in September.  The Shenda Prospecting License represents the second license where the biogeochemical method is being tested by drilling various shallow geochemical holes.  A total of 316 holes were drilled totaling 3,647 metres.  In addition, six RC holes were drilled totaling 258 metres.  In one of the holes, vein material up to 3.0 metres thick was encountered, along with a sulphide-rich layer in the footwall vein.  Two drill holes intersected a pegmatite containing pyrite that is considered to have more potential than the actual reef structure that was the program’s primary target.  The majority of the Shenda PL consists of unaltered, undeformed granite.  Of the entire program, 23 homes intersected quartz veining that was typically thin, although two holes intersected thicker veins ranging from 2-3 metres.

Rotary drilling commenced on the Shenda License in mid-August 2005 and was completed in September 2005. The Shenda Prospecting License represents the second license where the Company’s biogeochemical method was tested by drilling various shallow geochemical holes.  A total of 316 holes were drilled totaling 3,647 metres.  In addition, six RC holes were drilled totaling 258 metres. Due to discouraging results this license was returned to the vendor. No exploration activities were performed on the remainder of the Kanagele property during fiscal 2006.  The Company has incurred total net costs (after any recoveries) of $1,077,512 on the Kanagele Property to August 31, 2006, net of write off of $291,480.   

Ushirombo West Project Area

In March 2005 a n extensive auger drilling program was carried out in the  Ushirombo West Project area region to test areas with anomalous gold values.  Microprobe analysis confirmed that a chromite grain discovered in the Ushirombo West Project Area had a kimberlite source.  

Limited exploration activities were performed on the Ushirombo West property during fiscal 2006.  The Company has incurred total net costs (after any recoveries) of $237,223 on the Ushirombo West Property to August 31, 2006.  

Igunga Project

During June 2005, 1,936 samples were collected from 39 traverses covering 387 square kilometres in the Igunga Project Area, which was also botanically mapped by a BGC field crew to establish plant associations and distribution patterns.  A small greenstone occurrence exists on the extreme southwest corner of this License.  BGC sampling of the Itunduru License in the Igunga Project Area continued during July 2005 and 3,742 samples were collected from 74 traverses covering 327.75 line kilometres.  The purpose of this program was to establish plant associations and distribution patterns.  A limited follow-up BCG program was carried out on the Igunga Property during fiscal 2006.

Geita Project Area

In June 2005, a follow-up stream sampling program returned kimberlitic grains from a target area that produced favourable results in 2004.  Further sampling and ground magnetic work are planned on this particular target area.  Limited exploration activities were performed on the Geita property during fiscal 2006.  The Company has incurred total net costs (after any recoveries) of $361,053 on the Geita Property to August 31, 2006.  

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Diamond Exploration

Stream sediment sampling and auger drilling programs carried out in the fall of 2004 returned diamond indicator minerals from several properties that will be the subject of follow-up work during the 2005 exploration period.  The 2005 diamond exploration program consisted of sampling for diamond indicator minerals carried out on two magnetic targets in the Geita Project area using an auger drill.  

Ground magnetic surveys were completed on kimberlite targets in the Mwadui, Igunga and Nzega Project areas in September 2005 and these targets were subsequently tested by a RAB drilling program a short time later in November.  Five previously known kimberlite bodies were intersected at Mwadui along with two new pipes. In addition, two brand new kimberlite pipes were discovered at Igunga and another two at Nzega for a grand total of 11. One of the pipes at Nzega occurs close to artisanal diamond activity for alluvials in a nearby river bed.  Subsequent testing confirmed that a range of diamondiferous kimberlite indicator minerals including G10 and G3 garnets were identified in four kimberlite pipes on its Nzega and Igunga Project Areas. Based on the probed results from the kimberlites at Igunga and Nzega, both project areas have potential to host diamondiferous kimberlites.

THE LAKE VICTORIA GOLDFIELDS PROPERTIES ARE WITHOUT KNOWN MINERAL RESERVES AND ANY EXPLORATION PROGRAM IS AN EXPLORATORY SEARCH FOR ORE.

Drill Rig

In April 2005, the Company’s drill rig and support vehicle was delivered. The unit is a combination Reverse Circulation (RC) and Rotary Air Blast (RAB) drill rig with a rod storage capacity of 14 tonnes.  In order to ensure maximum mobility and efficiency, the drill rig was assembled on a reconditioned Samil 100 truck and is coupled with an Ingersoll Rand XHP900SCAT air compressor. A similar truck fitted with a 3,000 litre water tank and a 3,000 litre diesel tank will be used to support drilling operations.

Accessory equipment includes 200 metre sets of RAB and RC drill rods with percussion hammers and drill bits and basic spares that should ensure continuity of drilling.. The spares and stores will be accommodated in Mwanza in a store house / maintenance depot consisting of two storage containers and an office which are presently being refurbished.   The drill management team working out of the Company's Mwanza office gathered the necessary documents and crews ready for the drill program. The entire crew attended a safety and first aid course conducted by the Company's security contract company, Knight Support Tanzania Ltd.  The Company’s RC/RAB drill rig was in constant use during fiscal 2006 carrying out drilling programs on several of the Company’s properties.  

Biogeochemistry

A key component in the Company’s optimization of its exploration process is the deployment of biogeochemistry techniques in its field programs.  One of the major problems confronting mineral explorers in the Lake Victoria Greenstone Belt - and for that matter in most other greenstone belts in the world - is the presence of deep overburden which frequently masks the existence of favorable host rocks for gold, diamonds and other mineral commodities.  

Biogeochemical protocols have been developed relating to the selection and analysis of sample materials and specially-trained crews have been put into the field to gather samples for analysis. In addition, a biogeochemistry laboratory has been established in Mwanza for the preparation of sample materials which are then sent to independent laboratories.  In order to protect its internally developed biogeochemical methodology via international laws governing intellectual property, the Company has submitted a patent application which is currently pending legal review.   The BGC program of collecting and analyzing samples continued throughout fiscal 2006.  

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Item 5.

Operating and Financial Review and Prospects

This discussion and analysis of the operating results and the financial position of the Company for the years ended August 31, 2006, 2005, and 2004, and should be read in conjunction with the consolidated financial statements and the related notes attached hereto.

Critical Accounting Policies

The Company is in the process of exploring its mineral properties and has not yet determined whether these properties contain mineral deposits that are economically recoverable.  The recoverability of the amounts shown for mineral properties and related deferred costs are dependent upon the existence of economically recoverable reserves, securing and maintaining title and beneficial interest in the properties, obtaining necessary financing to explore and develop the properties, and upon future profitable production or proceeds from disposition of the mineral properties.

In accordance with Canadian generally accepted accounting principles, acquisition costs and exploration and development costs relating to mineral properties are deferred until the properties are brought into production, at which time they are amortized on a unit-of-production basis, or until the properties are abandoned or sold or management determines that the mineral property is not economically viable, at which time the deferred costs are written off.  Option payments on mineral properties are exercisable at the discretion of the Company and, accordingly, are only recognized as paid.

Amounts recovered from third parties to earn an interest in the Company’s mineral properties are applied as a reduction of the deferred exploration costs.  The amounts shown as deferred expenditures and property acquisition costs represent net costs to date, less amounts amortized and/or written off, and do not necessarily represent present or future values.

Overhead costs directly related to exploration are allocated to the mineral properties explored during the year and are deferred and amortized using the same method applied to property-specific exploration costs.  All other overhead and administration costs are expensed in the year they are incurred.

For the purposes of United States generally accepted accounting principles (“US GAAP”), the Company expenses all exploration expenditures made prior to commercially mineable deposits being identified.  Property acquisition costs are capitalized as incurred and are subject to impairment analysis on occurrence of a triggering event.   See Note 11(a) of the Consolidated Financial Statements of the Company.

The Consolidated Financial Statements utilize estimates and assumptions principally regarding mineral properties, going concern and future income taxes and stock-based compensation, that reflect management’s expectations at the date of preparation.  Events or circumstances in the future, many of which are beyond the control of the Company, may impact these expectations and accordingly could lead to different assumptions and estimates from those utilized.  Factors that could impact the estimates and assumptions that were made at the date of preparation of the Consolidated Financial Statements have been previously discussed under the heading “Risk Factors”.

A.

Operating Results

The following discussion and analysis of the financial condition and operating results of the Company for the three years ended August 31, 2006, 2005 and 2004 should be read in conjunction with the Consolidated Financial Statements and related notes to the financial statements which have been prepared in accordance with Canadian GAAP.  The discussion and analysis set for the below covers the results measured under Canadian GAAP.  Material differences between the application of Canadian GAAP and U.S. GAAP to the Company’s audited financial statements exist as described in Note 11 to the Consolidated Financial Statements.

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Fiscal year ended August 31, 2006 compared to fiscal year ended August 31, 2005

The loss before income tax in 2006 was $4,327,000; a $748,000 increase from last year’s loss before income taxes of $3,579,000. The major reason for the higher loss before income taxes in 2006 was due to increases of write off of Mineral properties and deferred exploration costs of $60,000, professional fees of $338,000 and $134,000 in stock-based compensation expense.  During the year, professional fees increased as the Company was engaged in litigation which amounted to $243,000; year end audit fees increased by $40,000 and legal fees relating to the issuance of the RSUs was approximately $50,000.  Property investigation costs decreased to $24,000 from $134,000 due to a concentrated effort in drilling properties owned.  The 2006 foreign exchange loss of $140,000 is consistent with that of 2005.  Net interest earned was $23,000 for the year ending August 31, 2006, an increase of $34,000 from 2005 due to higher cash balances in 2006.  The increase in Transfer Agent and Listing fees from $140,000 for the year ended August 31, 2005 to $205,000 is largely due to the listing on the American Stock Exchange.  The increase in Salaries and Benefits from $691,000 for the year ending August 31, 2005 to $765,000 for the current year is a result of both a larger staff to accommodate the operation of the drill rig and a higher wage level to remain competitive with local salary scales.

The Company recorded a non-cash future income tax recovery of $648,000 during the year ended August 31, 2005 due to additional tax basis accumulating in Tanzania in excess of the carrying value of mineral properties and deferred exploration costs.  No such recovery was recorded in the current year, resulting in a loss for the year of $4,327,000 compared to a loss of $2,931,000 in the prior year.

Fiscal year ended August 31, 2005 compared to fiscal year ended August 31, 2004

The loss before income tax in 2005 was $3,578,628; a $1,962,264 increase from 2004 loss before income taxes of $1,616,364. The major reason for the higher loss before income taxes in 2005 was the write-off of deferred mineral property and exploration costs of $1,629,932 on the abandonment of certain mineral properties in 2005.  There was no abandonment or write-off of deferred exploration costs in 2004. A loss on foreign exchange of $134,650 was incurred in 2005 as compared to a gain of $48,630 in 2004.  The 2005 foreign exchange loss  is a result of exchange-related losses associated with the decline in value of the US dollar and Tanzanian shilling relative to the Canadian dollar.  Net interest earned has decreased from $30,626 for the year ending August 31, 2004 to an expense of $11,488 for 2005.  The reduction in interest earned is a reflection of the sale of high interest yielding bonds and includes interest paid on the interim financing and the Company’s capital lease obligation for the Company’s drill rig.  The increase in insurance expense from $65,744 for the year ending August 31, 2004 to $97,412 for 2005 and the increase in amortization from $54,643 for the year ending August 31, 2004 to $88,981 for 2005 are both attributable to the acquisition of the drill rig and its ancillary equipment.  The increase in Transfer Agent and Listing fees from $68,895 for the year ended August 31, 2004 to $140,166 is largely due to the listing on the American Stock Exchange.  The increase in Salaries and Benefits from $604,368 for  the year ending August 31, 2004 to $691,059 for 2005 is a result of both a larger staff to accommodate the operation of the drill rig and a higher wage level to remain competitive  with local salary scales.  Some of these increased expenses have been offset by a reduction in Professional Fees from $201,167 for the year ending August 31, 2004 to $147,333 for 2005 and a reduction in Property Investigation costs from $254,991 for the year ending August 31, 2004 to $133,627 for 2005.  Professional Fees were reduced due to the successful initial completion of the Form 20-F in 2004 and Property Investigation Costs have decreased due to the focus on exploring properties held in inventory rather than increasing our portfolio of properties.  The Company recorded a recovery in capital taxes during the year end August 31, 2004 of $46,052, and no such recovery was incurred in the 2005 year.

The Company recorded a non-cash future income tax recovery of $647,565 during the year ended August 31, 2005 due to additional tax basis accumulating in Tanzania in excess of the carrying value of mineral properties and deferred exploration costs.  No such recovery was recorded in the prior year, resulting in a loss for the year of $2,931,063 compared to a loss of $1,616,364 in the prior year.

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Inflation

Historically, inflation has not affected the Company’s business in the current locations where it is doing business and the Company does not expect it to affect the Company’s operations in the future.

B.

Liquidity and Capital Resources

The Company had $3,175,000 in cash at August 31, 2006, compared to $1,396,000 as at August 31, 2005.  The Company had working capital of $2,838,000 at August 31, 2006, compared to $1,389,000  at August 31, 2005.  Although the Company believes it has enough resources through working capital and share subscription agreements to finance operations for its 2007 fiscal year, ultimately the Company will need to obtain additional financing to sustain operations at the present rate of activity.  Historically, the Company has raised funds through equity financing, entering into joint venture or royalty agreements with other mining companies, and the exercise of options and warrants to fund its operations.  The Company’s funding requirements by major expenditure category, listed in order of priority are:

(a)

exploration work,

(b)

new property investigations, and

(c)

general and administrative costs.

Exploration work and new property investigations can generally be deferred until adequate capital resources are available, and general and administrative costs can be reduced during periods when funding is not available.

At this time, the Company has no operating revenues, and does not anticipate any operating revenues unless the Company is able to find, acquire, place in production and operate a profitable mining property.

In February 2005, the Company completed the twenty-fourth (24) tranche of a twenty-four (24) tranche private placement pursuant to a Subscription Agreement dated March 5, 2003 made between the Company and James E. Sinclair, Chairman and Chief Executive Officer of the Company for the purchase of 2,137,629 common shares for $2,950,000.

The Company also completed a $1,000,000 private placement pursuant to a separate Subscription Agreement dated January 5, 2004 between the Company and James E. Sinclair for 622,278 common shares at a price of $1.607 per share.

On January 13, 2005, the Company entered into private placement subscription agreement with the Company’s Chairman and C.E.O. for the purchase of an aggregate of $3,000,000 worth of common shares of the Company in eight separate quarterly tranches of $375,000 each.  As at November 16, 2006 the Company has completed the following seven (7) tranches of the eight (8) tranche private placement:

(a)

May 9, 2005 – 382,653 common shares at a price of $0.98 per share;

(b)

August 18, 2005 – 259,516 common shares at a price of $1.445 per share;

(c)

December 16, 2005 – 90,405 common shares at a price of $4.148 per share;

(d)

February 14, 2006 – 47,807 common shares at a price of $7.844 per share;

(e)

May 12, 2006 – 40,783 common shares at a price of $9,195 per share;

(f)

August 14, 2006 – 44,664 common shares at a price of $8.396 per share;

(g)

November 16, 2006 – 54,058 common shares at a price of $6.937 per share.

On June 20, 2005 the Company completed a $1,000,000 private placement pursuant to a separate Subscription Agreement between the Company and James E. Sinclair for 819,000 common shares at a price of $1.221 per share.

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On September 30, 2005 the Company completed a $950,000 private placement pursuant to a separate Subscription Agreement with the Company’s Chairman and C.E.O. for the purchase of  442,478 common shares at a price of $2.147 per share.

On February 23, 2006 the Company completed a US$1.25 million private placement pursuant to a separate Subscription Agreement between the Company and James E. Sinclair for 183,440 common shares at a price of C$7.844 per share.

On March 8, 2006 the Company completed a US$1.25 million private placement pursuant to a Subscription Agreement between the Company and Guild Investment Management, Inc. for 215,820 common shares at a price of C$6.667 per share.

On May 12, 2006 the Company completed a $1,000,000 private placement pursuant to a separate Subscription Agreement between the Company and James E. Sinclair for 107,124 common shares at a price of $9.335 per share.

On August 8, 2006 the Company entered into private placement subscription agreement with the Company’s Chairman and C.E.O. for the purchase of an aggregate of $3,000,000 worth of common shares of the Company in eight separate quarterly tranches of $375,000 each.  The initial quarterly period shall commence February 1, 2007.

Mineral Property Projects:

As at August 31, 2006 amounts capitalized in respect of mineral properties were $20,593,948 an increase  from August 31, 2005 when the balance was $19,739,275, and an increase  from August 31, 2004 when the balance was $19,853,296.

During the fiscal year ended August 31, 2006, the Company capitalized mineral property exploration costs of $2,545,000 (net of option payments received of $320,000 on its mineral resource properties.  The Company wrote off  $1,690,000 in exploration expenditures on areas abandoned in the year ended August 31, 2006.

For information on the Company’s commitments for property and rental payments, refer to Item 4.

C.

Research and Development, Patents and License, etc.

Not Applicable.  

D.

Trend Information

No known trend.

E.

Off Balance Sheet Arrangements

The Company has no material off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition.

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F.

Tabular Disclosure of Contractual Obligations

The following table sets out the Company’s known contractual obligations as of the latest fiscal year end:

⁽¹⁾

Expires on April 30, 2007

⁽²⁾

Includes finance charges

Item 6.

Directors, Senior Management and Employees

A.

Directors and Senior Management

The following is a list of the Company’s current directors and officers.  The directors named below were all re-elected by the Company’s shareholders on February 27, 2006 with the exception of Mr. Deane who was appointed a Director by the Board effective September 1, 2006.  

Mrs. Victoria Luis wished to step aside as Chief Financial Officer and Corporate Secretary.   Ms. Regina Kuo-Lee was appointed Chief Financial Officer effective September 1, 2006.  Mrs. Helen Hansen was appointed Corporate Secretary effective September 1, 2006.

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Directors and Senior Management

James E. Sinclair

Chairman, Chief Executive Officer and Director

Mr. Sinclair became Chairman and CEO of the Company following the Company’s acquisition in April, 2002 of Tanzam, a Tanzanian gold exploration company formerly controlled by the Sinclair family.  Mr. Sinclair, aged 65, devotes his full time to the business and affairs of the Company.

Mr. Sinclair is primarily a precious metals specialist and a commodities and foreign currency trader.  His past experience includes that of founder of the Sinclair Group of Companies (1977), which offered full brokerage services in stocks, bonds, and other investment vehicles.  The companies, which operated branches in New York,

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Kansas City, Toronto, Chicago, London and Geneva, were sold in 1983.  Mr. Sinclair served as a Precious Metal Advisor to Hunt Oil and the Hunt family from 1981 to 1984 for the liquidation of their silver position. Mr. Sinclair was a general partner and member of the executive committee of two New York Stock Exchange firms and also President of Sinclair Global Clearing Corporation (Commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies).  Mr. Sinclair was President of James Sinclair Financial Research SARL in Luxembourg. Mr. Sinclair held the position of Chairman of Sutton Resources from 1989 to 1995.

Mr. Sinclair is the author of numerous magazine articles and three books, which deal with a variety of investment subjects, including precious metals, trading strategies and geopolitical events and their relationship to world economics and the markets.

Victoria Luis, M.B.A., CSCPA and AICPA Member

Corporate Accountant and Director

Mrs. Luis wished to step aside as Chief Financial Officer and Corporate Secretary.  She will now focus her energies and experience on strategic planning and other corporate issues.  

Prior to her association with the Company, she was a board member of Tanzam in addition to being its Chief Financial Officer, a position she also held with an associated company, Sinclair Financial.

Before joining Tanzam, Mrs. Luis held various management positions with General Electric Capital Corporation where she was part of a team that facilitated the amalgamation of companies acquired by GE.

She earned her Masters of Business Administration with a specialization in Accounting in 1998 and her Bachelors of Science in Finance in 1990.  Ms. Luis, aged 37, devotes her full time to the business and affairs of the Company.

Regina Kuo-Lee, C.A.

Chief Financial Officer

Ms. Kuo-Lee was appointed Chief Financial Officer effective September 1, 2006.   Ms. Kuo Lee, a Chartered Accountant, has more than 16 years experience in the accounting field, more recently as CFO and Vice President of Finance for Trimin Capital Corp., a management company with large equity interests in operating businesses.   She also has several years experience as a Controller in the technology sector and worked as an internal auditor in the brokerage industry after five years with Deloitte & Touche, Chartered Accountants in Toronto.

Jonathan G. Deane, M.Sc. (Geol.), B.Sc. (Honors)

Director and President

Mr. Jonathan G. Deane was appointed to the Board of Directors effective September 1, 2006.  Mr. Deane retains his position as President of the Company, including responsibility for all its exploration activities in Tanzania.