Frustration with Tanzania law change is growing among Aussie explorers
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Problems caused by a new change in legislation in Tanzania are spreading among ASX-listed junior explorers.
Indiana Resources — which first warned investors of the new Tanzanian law changes — today said it was facing difficulty in raising the $1.2 million it needs to help buy a project outside the troubled east-African nation.
The Tanzanian government plans to revoke any retention licences issued to exploration companies under previous legislation.
A retention licence is a holding title for a project that gives a company more time to develop the resource and secure financing.
Indiana Resources (ASX:IDA) holds a retention licence for its Ntaka Hill nickel project.
The company had been in the process of finalising its capital raising when the government announced the new legislative changes.
Indiana has also recently been the target of a disgruntled shareholder who wants to take control of the gold and nickel explorer.
As a result, the company has only been able to raise $470,906 of the total leaving it with a sizeable shortfall.
Indiana had $650,000 in the bank at the end of the September quarter.
Chairperson Bronwyn Barnes told Stockhead earlier that while Indiana was focused on progressing activities in Tanzania, it was also considering new acquisitions as well as a potential joint venture partnership or sale of the Ntaka Hill project.
“The purpose of this entitlement offer was to support Indiana’s project generation activities and to ensure that the company has sufficient capacity and flexibility, should the opportunity to acquire a suitable project outside Tanzania arise,” Barnes told investors on Monday.
“We remain focused on project review activities for suitable opportunities.”
Retention licence denied
Liontown Resources, meanwhile, has had its application for a retention licence for the Simba resource within its Jubilee Reef project rejected.
The company, which has two projects in Tanzania, applied for the licence prior to the amendments coming into effect.
“The effects of previously reported amendments to the legal framework governing the natural resources sector in Tanzania are still yet to be determined,” the company told investors.
Liontown has now appointed a senior consultant in Tanzania to administer the tenement portfolio until the effects of the changed legislation are understood.
A third party, Chela Resources — in which Liontown previously held a beneficial interest — has subsequently applied for tenements over the Simba resource.
Liontown has struck a deal under which it has a right to acquire all of the shares in Chela if the tenements are converted to licences that can be legally owned by a foreign company.