The Morogoro Project comprises 33 mineral licences and applications covering an area of ~8,900 square kilometres and is situated in the Morogoro and Dodoma regions of central and south eastern Tanzania. Access is by a network of gravel and tarred roads in varying stages of repair linking to the well maintained and busy central east-west Dar es Salaam to Dodoma road. The project can be conveniently divided into two large licence blocks, the Morogoro Licence Block and the Dodoma Licence Block, each comprising smaller blocks of contiguous and non-contiguous licence blocks at various stages of application, offer, issue and renewal. The Morogoro Licence Block and the Dodoma Licence Block are also known as the Morogoro South Block (MSB) and the Morogoro North Block (MNB) respectively. The MSB comprises mineral tenements covering an area of ~ 4,900 km 2 located south and west of the town of Morogoro. The MNB comprises mineral tenements covering an area of ~4000 km 2 east of Dodoma . Both licence blocks significantly increases the Company’s footprint in this newly emerging gold field in eastern Tanzania where, prior to the acquisition of Morogoro Gold Limited (Morogoro Gold), it had just one prospecting licence.

The Morogoro project covers a non-traditional gold exploration area dominated by Proterozoic age high grade metamorphic rocks in eastern Tanzania.

The prospectivity of the project has been enhanced by the on-going discoveries of new areas of gold mineralisation by itinerant artisanal miners and by the recent Magambazi gold discovery of Canaco Resources Limited near the town of Handeni 30 km north east of the MNB. The southeastern part of the MNB is contiguous with an area of alluvial and hard rock gold mining and preliminary stream sediment sampling by Morogoro Gold in this part of the MNB has returned anomalous gold values. The MSB includes part of the rugged Uluguru mountains and the Company has already identified a major geological structure, the Ruvu Nappe, that it believes has important implications for gold mineralisation in this area. The Ruve Nappe is a 60 km long regional north-south trending fault zone that has thrust marbles of the Matombo Group over granulites of the Langanwangule Group. Most artisanal gold mining activity in the area is coincident with the basal thrust fault of this nappe along its length, workings being located within the rivers and river terraces that drain the structure. Some hard rock mining is also present within the Ruvu Nappe area, most significantly at the Udovelo Mine, which occurs 8 km to the north of PL 5625/09 (the Company’s original licence in the project area). Local reports suggest mining is being carried out to a depth of 50 to 80 metres of 5-10 cm quartz veins and grades reputed to be up to 280 g/t.

Recent research by workers at the University of Western Australia and the University of Dar es Salaam has indicated that that the geology in this part of eastern Tanzania may be an extension of the highly gold endowed Sukumaland Superterrain, host to the Lake Victoria Goldfield to the north-west. Should this be correct,this strongly establishes the prospectivity of the Morogoro project for the discovery of structurally controlled mesothermal metamorphosed Archaean and Proterozoic age gold mineralisation and the Company will primarily target this style of mineralisation in its field exploration programmes. Additionally, within and adjacent to some of the Morogoro licence blocks, published geological and mineral maps show occurrences of base metals (e.g. copper) and one rare earth element occurrence which will also be investigated by the Company.

The Morogoro project presents the Company with an interest in a large mineral licence portfolio in a relatively unexplored and geologically poorly understood region that is receiving increasing company interest in Tanzania as a result of recent gold discoveries and new geological research. This point to a newly emerging gold field where the Company anticipates significant new gold discoveries will be made in the years ahead..

A Stage 1 field exploation programme on priority area was implemented over  the MNB and the MSB during the period October 2011 to March 2012. This programme comprised regional soil sampling survey across the Ruvu Nappe (MSB) and regional stream sediment sampling over PLs 6717/2010 and 6598/2010 in the southern part of the MNB. Both the soil and stream sampling programmes resolved a number of anomalous areas for detailed follow up work.Results from follow up infill soil and stream sediment sampling implemented during the 2nd and 3rd quarters of 2012 indicate a significant gold anomaly, open-ended on the South at the northern end of PL 5635/2009 on Morogoro South on the Ruvu Nappe. Weaker gold anomalies were also defined on in-fill sampling blocks further South along the Ruvu Nappe. A feature of these anomalies is an association with arsenic, bismuth and antimony as well as weaker association with other elements. A significant barium anomaly was also defined over two of the infill sampling blocks (Block B & H).  These results provide areas for follow on trenching and drilling during 2013.

The results of in-fill  stream sediment sampling for gold  over PLs 6717/2010 and 6598/2010 on Morogoro North were low but these licences are just a small part of a larger area. Kibo's field teams are continuing to sample licences further north closer to the Handeni area where the company is optimistic that more significant results will be forthcoming.

The results of the Stage 1 field programme are discussed in detail on the Company's operational update of the 21 June 2012 and exploration updated of the  14 November 2012. Sampling locations and significant results and illustrated on the relevant maps on the right.