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A Cheap Gold Lottery Ticket in Rwanda

Bob Moriarty
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Nov 8, 2011

I made a most interesting trip to Rwanda in May of 2010. I've had to wait ever since to be able to write it up. Face it; Rwanda is one of those places that you have to look up on a globe to even figure out where it is. (Hint: It's west of Tanzania, south of Uganda and east of the DRC.) I didn't even have a clue there was gold there even though Banro has some major deposits in the DRC nearby.

Gold was first discovered at the Miyove Gold district about 1938 and mined on a small scale at three mines contained within the Miyove project. Historic government reports estimate that between 80,000 and 125,000 ounces were mined in the 1930s and 1940s. Between 1984 and 1988, a Belgian company operating in conjunction with the UN conducted a basic exploration program and drilled some 2200 meters. The best results were a blazing 99 g/t over 6 meters.

A Russian company called Rogi did more work and came up with a SWAG estimate (absolutely not 43-101) of about 400,000 ounces of gold. Simba Gold did a deal on the 2937 hectares property in March of 2011. Simba is paying Rogi 5.7 million shares and $2.750 million for 100% of the project over a four-year period.

With only 34.5 million shares outstanding and a price of $.14, the market values Simba at a tiny $4.8 million and the company has $3.5 million in the bank. Basically the company was being run on a caretaker basis for months with little or no news. With the appointment of Werner Ullmann as President a few weeks ago, you can expect a lot more action.

Mr Ullmann founded Simba three years ago and it has taken this long to get the company public and do the deal on the Miyove project. Along with the appointment of Mr Ullmann as President came the appointment of Allan Armitage as Senior Technical Advisor.

I've been to the project as I said, about 18 months ago. There is gold there and it comes right to the surface. I bought shares in the company two years ago and bought more shares in the PP. I have been a buyer of shares in the open market since I think it's really cheap.

The only issue here is grade and tonnage. It's a proven past producer, gold can be found in oxide form right at the surface and there have been several very high-grade intercepts. What the company needs is a good well-directed technical program to advance the project. It's an early stage project with nice potential.

I've spent a lot of time in Africa over the past three years in Tanzania, Ghana, Mali and Kenya. Rwanda was a pleasant surprise. It's far more developed in terms of infrastructure than most of Africa. It's in the hills so even though it's near the equator, the climate is cool at night and warm in the day. I don't think I came across any mosquitos. The project is a quick 45 minute trip north of the capital, Kigali.

No one knows enough about the project to make any projects but at $.14 the stock is a very cheap call on the price of gold. With a successful technical program it has a lot of potential. It's located in a business friendly environment with far less corruption than its neighbors.

Simba is an advertiser, we own shares and we are biased. I had a most enjoyable visit to the project and I'm looking forward to progress on the exploration side. With the treasury cashed up and new management in place, Simba has a lot of potential.

As always, you are reminded that you alone are responsible for your own due diligence. We share in neither your profit nor your losses.

Simba Gold Corp
SGD-V $.14 (Nov 07, 2011)
SMBGF-OTCBB 34.5 million shares
Simba Gold website

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Bob Moriarty
President: 321gold
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