About Tanzania

• Abundant Natural Resources
• Democratic Republic (1977)
• Investment Incentives and Guarantees Against Expropriation
• Stable Macroeconomic Performance and Fiscal Regime
• Infrastructure Facilities
• Peace and Stability

Setting of Tanzania in East Africa showing locations of Projects 1, 2 and 3.

Handeni/Sindeni Area, Northeastern Tanzania

1992.18 km2 in size, both Projects 1, 2 and 3 are located within the Tanga region of Northeastern Tanzania.

Consisting of 12 Prospecting Licenses Totaling 1992.18 sq. Kilometers in North eastern Tanzania.

Tanzania has become one of the fastest emerging gold producers in Africa, and is now the continent's third largest gold producing country after South Africa and Ghana. Based upon ongoing projects and developing mines, most of Tanzania's proven gold reserves are from the Lake Victoria Goldfields (LVGF) located in Northern Tanzania. The Handeni/Sindeni area located within Eastern Tanzania has been known to host gold since 2003. Although the area is regarded as inferior to the Lake Victoria Goldfields (LVGF) (with regards to operational gold mines), Canaco Resources' (Canaco's) gold discoveries at Kilindi and Magambazi are indicative of a new and emerging exploration environment, capable of hosting primary gold mineralization. Recent graduate level research published by the University of Western Australia show that the highly-endowed Sukumaland Superterrane, the geological host to Tanzania's most significant gold deposits, may have been overprinted on its East-Southeastern extension by a Proterozoic orogeny adjacent to the Mozambique Belt further east.

Logistics

1992.18 km2 in size, both Projects 1, 2 and 3 are located within the Tanga region of Northeastern Tanzania.

Infrastructure and Availability of Exploration Requirements

The Projects are located Northwest (by road) of Dar es Salaam and the Korogwe-Arusha railway line passes through the Northeast corner of Project 1. Although the properties are not located nearby any permanent water damming facility, the area is rich in surface water, which may constitute a possible water source. The Mombo-Handeni 33 kV power line is located within the Northwestern part of Project 1, whilst another two 132 kV power lines are located within 20 km of the Eastern boundary (Figure 4.7). In addition, the amount of villages in the immediate area will be able to supply personnel required for operation. Potential tailings storage areas, waste disposal areas, heap leach pads and potential processing plant sites can only be supplied after an Environmental Impact Statement has been completed. Dar es Salaam is able to supply most exploration requirements and comply with all sustenance supplies. What is not available in Dar es Salaam, should be obtainable in South Africa, serviced by daily commercial flights from Dar es Salaam. Surface rights are vested in the Government of Tanzania.

Geology

The 3 Projects geology comprises the Neoproterozoic domain of the Mozambique belt and is characterized by the occurrence of abundant high P-T granulite-facies rocks (including meta-anorthosites) such as marbles and pegmatites wherein gemstone mineralisation is well pronounced. The geology comprises metamorphic rocks including garnet amphibolite, biotitic-quartz-feldspar-gneiss and quartzo-feldspathic-gneisses of the Proterozoic Mozambique Belt. Although most of the property is covered by recent lithological units (mostly alluvium), significant outcrop of garnet-amphibolite and garnet-biotite gneiss are located within the Northeastern and Southwestern parts of the property.

The amount of small scale mining and visible gold shown to NS during the field investigation is conclusive that further investigation and associated sampling of the areas on a more detailed scale is necessary. In addition, the copper-gold values obtained from grab samples during the recent reconnaissance field investigation by NS are proof that the Projects contain merit for further investigation and exploration. The geological setting, NW-SE structural development, high grade copper (Cu) assay result (13.5% Cu) from sample A2022 as well as up to 0.17% Cu from sample A2023 are evidence that the Handeni-Sindeni area is highly prospective for gold-copper mineralization on a similar scale that the Lake Victoria Goldfields in Northern Tanzania.

Targeted Areas

NS was able to identify four areas that should receive follow up by ground based investigations:

• Mahanti
• Koluguzao
• Konkongo
• Sindeni

Generated target areas, small-scale artisanal gold workings and structures on Projects 1, 2 and 3.

Mahanti

The target area is a possible source for the alluvial gold working downstream due to significant NW-SE structural development.

Sindeni

The target area hosts the copper stained quartz vein development within garnet-amphibolite and contains significant NW-SE and NE-SW structural development.

Koluguzao

The target area follows a NW-SE trending structure (drainage probably developed on this structure).

Konkongo

The target area is located within an area that shows significant folding and other structural development.

Proposed Exploration Program & Budget

Airborne (initially in the SW and NE targets, totaling 1600 line kilometers)		$275,000
Regional and detailed mapping		$100,000
Soil sampling (utilizing XRF analyzer for 90% of samples)		$200,000
Ground magnetics & Induced Polarization		$156,000
Diamond drilling, 2000 meters (minimum)		$300,000
Six to Nine Month Program (once initiated)		Total: $1,031,000
* No formal work commitments in Year 1

Capital Structure

Current Issued Shares		13,039,118
Options		2,380,000
Weighted Average Exercise Price		$0.15
Expiry Dates		August 17,2013
Total Cash & Near Cash		$300,000
52 Week High/Low		$0.325/$0.12
Currently Fully Diluted		15,419,118 shares
Acquisition - Project 1 over 30 months   - Project 2 over 37 months   - Project 3 over 27 months		3,500,000 shares 3,500,000 shares 0 shares
Total Post Acquisition		22,419,118 shares
Proposed Financing Proposed Financing - "A" WTS Proposed Financing - "B" WTS		7,500,000 units @ $0.20 3,750,000 units@ $0.35 750,000 units @ $0.20
Total Fully Diluted Post Acquisition & Financing		34,419,118 Generating $3,319,500 Gross

Company Comparables (in Handeni/Sindeni Area)

View the Claims Map

Company		Shares Issued		Market Price (12/13/11)		Market Cap
Canaco (Can)		198,931,603		$1.22		$242,696,555
Kokanee (KOK)		84,454,959		$0.13		$10,979,145
Douglas Lake (DLKM)		307,416,653		$0.14		$43,038,331
Gem International (GI)		24,977,660		$0.10		$2,497,766
Strike Gold Corp. (SRK)		32,075,938		$0.16		$5,132,150
Brookemont Capital (BKT)		54,850,262		$0.09		$4,936,524
Canada Gold (CI) - Pre Financing Canada Gold (CI) - Post Financing		13,039,118 20,539,118		$0.20 $0.20		$2,607,802 $4,107,824