Properties

Gold
• Handeni
• Bagamoyo
Diamonds
• Kolandoto
• Shinyanga

Handeni District, Tanzania

Gem International Acquires 100% Of A Strategic Handeni Gold Project Contiguous To Canaco Resources Handeni Project Bordering The Western And Southern Boundary In Tanzania

Gem International Resources Inc. (the “Company”) (TSXV: GI) announces that through its subsidiary Sierra Exploration and Mining Ltd. (‘Sierra”), the Company expands its current Tanzania exploration projects. Sierra entered into a Sales Agreement with Samwel Mchele Chitalilo and Leo John to acquire a 100-per-cent interest in two gold projects located in the Handeni District of Tanzania. The project encompasses Prospecting Licenses PL7403/2011 and PL7456/2011, containing a total area of 84.52 square kilometers and adjoins the western and southern boundary of Canaco Resources Inc.’s Handeni property and is located at Mbwego area and Swagiro/Magamba area in the Handeni District respectively.

See Full Size Location Map

The consideration for the purchase is cash payments totaling USD$190,000.

Cash payment schedule:
i) US$60,000 upon execution of the Sales Agreement;
ii) US$130,000 within 7 days upon completion of the transfer of the Prospecting Licenses from the Vendors to Sierra.

Canaco has made a major gold discovery, including 23 metres of 19.14 grams per tonne gold in drilling (see Canaco news release in Stockwatch of July 12, 2010). Canaco's regional exploration has extended the gold trend to 15 kilometres, discovering new gold mineralization 5 kilometers west-northwest of the Magambazi Gold Discovery (see Canaco news release in Stockwatch of September 13, 2010), 35.0 metres at 6.45 grams per tonne gold in the Western Lodes and 55.3 metres at 3.19 grams per tonne gold on the Magambazi Main Lode (see Canaco news release in Stockwatch of October 14, 2011), Canaco reports additional drill results at Magambazi, Including 11.0 Metres at 14.75 grams per tonne gold ( see Canaco news release in Stockwatch of November 3, 2011), and Canaco reports additional drill results at Magambazi, including 8.3 Metres at 8.84 grams per tonne gold on the Western Lodes and 23.8 metres at 2.8 grams per tonne at Magambazi North (see Canaco news release in Stockwatch of December 5, 2011) on their Handeni property in Tanzania. This discovery has created significant market attention.

Simon Tam, the president of Gem International Resources Inc. stated: “The purchase of the two projects will significantly supplement the Company’s current Tanzania exploration projects. The additional landholdings in the Handeni Districts achieve a critical mass for future development. The Company’s immediate plan is to aggressively explore the project.”

The Handeni Region

The Handeni Gold District in eastern Tanzania contains numerous artisanal gold discoveries and continues for several hundred kilometres. A significant gold discovery by Canaco Resources Inc. (CAN - TSX.V) on their Handeni Project has recast the area into a new gold frontier and has drawn considerable attention to the Handeni Gold District with one reported drill intercept of 48.6 metres of 14.81 g/t gold (December 6, 2010). Throughout 2010 Canaco's share price has risen from a low of $0.36 to a high of $6.45. Canaco continues to undergo a major diamond drilling program.

The geology of this region represents a non-traditional exploration environment dominated by high-grade metamorphic (granulite to amphibolite facies) rocks which are now thought to be overprinted Achean rocks. Canaco Resources' neighboring "Handeni" gold discovery contains a definable stratigraphic sequence with original rock types (pre-metamorphism) including ultramafic to felsic flows and volcaniclastic rocks, black shales and quartz-rich sedimentary rocks. Upper amphibolite facies metamorphism has created a sequence including a variety of rocks including feldspar-quartz biotite gneiss and pegmatite, kyanite and garnet pelite to psammopelite, amphibolites, and pyroxene-olivine ultramafic rocks on Canaco's neighboring property.The geology of this region represents a non-traditional exploration environment dominated by high-grade metamorphic (granulite to amphibolite facies) rocks which are now thought to be overprinted Achean rocks. Canaco Resources' neighboring "Handeni" gold discovery contains a definable stratigraphic sequence with original rock types (pre-metamorphism) including ultramafic to felsic flows and volcaniclastic rocks, black shales and quartz-rich sedimentary rocks. Upper amphibolite facies metamorphism has created a sequence including a variety of rocks including feldspar-quartz biotite gneiss and pegmatite, kyanite and garnet pelite to psammopelite, amphibolites, and pyroxene-olivine ultramafic rocks on Canaco's neighboring property.

Companies surrounding Gem International tenement are at various stages of advance

• Canaco Resources is at the most advance stage of exploration and currently in the project development phase. Since discovery in 2009, Canaco has reported in excess of 400 surface drill holes totaling 110,000 drill meters and a current drill rate of 10,000m. From this it would appear that Canaco has discovered a world class gold deposit. The foregoing is supported by very impressive gold intercepts as reported by Canaco. The discovery surface drill hole in 2009 return a gold mineralized intercept of 59m @ 4.28 g/t. Subsequent drill results were also impressive as summarized by Canaco, January 2012.


• Douglas Lake has completed an initial surface diamond drill program on their Magambazi East project that comprises 28 holes totaling 5,347m. Drilling of 32 surface diamond drill holes has also been completed on their Kwandege target of 4,386m. As of their Jan. 2012 press release, some drill core assays were outstanding but an intercept of 12m @ 4.40 g/t Au were reported for drill hole KW2_01.
  
  
• Benzu Gold Ltd.
  WBDD010 - 31m@1.72 g/t, including 11.5@3.6g/t & 1m@12g/t.; KWBDD017 - 16m@6.4g/t including 2m@7.47 g/t & 1m@64 g/t.; report the presence of free visible gold observed in RC chips, rocks and DD core; 7 clearly defined, high interest gold drilling targets in Negero PL.; 12 km long target, structurally related geochemical and geophysically NE-SW trend anomaly identified in Kwadijava license.

These 3 companies show serious investment but is also indicative of the highly prospective nature of the Gem International properties. Canaco, Benzu and Douglas Lake have all advanced to a drilling phase; either to test gold mineralization in depth and along strike, confirm gold mineralization in depth and along strike and/or in process of development drilling for resource calculation.

Major Points of interest of the Handeni Region

• New aeromagnetic interpretation portrays Handeni Region to represent an extension of the Lake Nyanza Superterrane which contains the most prospective segment of the Lake Victoria Goldfields in the Sukumaland Terrane to the west-northwest.
• Discovery of bedrock-hosted gold at Mkurumu spurred experienced artisanal miners from the Lake Victoria Goldfields to re-locate to the region which resulted in the discovery of other primary gold-hosting bedrocks in the Mkurumu-Magamba Province.
• Canaco has made a major gold discovery, including 23 metres of 19.14 grams per tonne gold in drilling (see Canaco news release in Stockwatch of July 12, 2010).

Geology

“Recent academic studies (Kabete 2008, age dating) highlight the area as prospective for traditional (but metamorphosed) Achaean orogenic gold deposits within the Sukumaland Corridor, the host to major deposits (i.e. Bulyhulu, Golden Pride, Geita) in the Lake Victoria Goldfields.”(Canoco website). Tanzania is the fourth largest gold producer in Africa.