MD&A from SOC Dec 29/11
What issues exist and are they material to CAN?
CONTINGENCY
On February 11, 2011, the Minister for Energy and Minerals for Tanzania cancelled the mineral
licence underlying the Handeni Property option agreement. The Company believes that it has a
valid agreement and that the Minister for Energy and Minerals erred in law when it cancelled
the mineral licence. The Company has appealed to the High Court of Tanzania to have the
mineral licence reinstated. The Court has now ruled that issues exist and that a hearing will be
held on March 27, 2012 to resolve the matter. The outcome cannot be reasonably determined
at this time.
They continue....
Handeni Property
In July, 2010, the Company entered into an Exploration Development and Purchase Option
Agreement with Abdalah Omary Kigoda (the "ML Holder"), to acquire title to a mining license
situated in The Handeni Tanga Mining District of United Republic of Tanzania, Africa. The
Handeni Mining License covers 7.02 hectares and is located in the Handeni region. On
September 6, 2010, the ML Holder made application to the Commissioner for Minerals,
Ministry of Energy and Minerals in Dar es Salaam for the conversion of the PML into a mining
license ("Mining Licence"). The ML holder also assigned the PML and all rights and obligations
under the Option Agreement to his son Abdallah Omar Kigoda. As part of this assignment, the
Company agreed to issue 700,000 common shares to Abdallah Omar Kigoda, which was done in
October 2010. Effective February 1, 2011, the Minister of Mines cancelled the ML refusal to
surrender the ML and the Company appealed this decision. The appeal court has just ruled that this matter be referred to the High Court for a hearing that is scheduled to be held on March 27, 2012. The Company is of the opinion that there were no grounds for cancellation of the ML.