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Report on AGG in Ticker Trax by Thom Calandra – (1 of 3)

21 February 2011

African Gold Group’s 9-Year-Old Foray Into Africa –  by Thom Calandra

ACCRA, GHANA — I am several hours from seeing African Gold Group Inc.’s (TSX: V.AGG) Esaase-area land package, in the same district that put Keegan Resources Inc. (TSX: T.KGN) and (AMEX: KGN)on the investor map. You have the word on Kobada from our Monday Ticker Trax: a potential world-class mesothermal deposit in Mali. And I will fill out the details later today or Thursday in a separate report.

Right now, after three flights through three West Africa nations, I am here with PhD. geologist Kevin Downing of 9-YEAR-OLD African Gold Group. Kevin and President Michael Nikiforuk — along with director and longtime West Africa prospector Pierre Lalande — have shown me dirt, data, veins and orpaillage (gold pillagers) across 216 square kilometers of Mali ground. Some of the details on this 740,000-ounce Canada-compliant resource have never been shared with an outsider. And the first 22 holes of a 200-reverse circulation program are due in three weeks or lesst (after 170 holes that already proves much of the prospecting model that Mr. Lalande and Dr. Downing share in their zeal. Still, this is not the real-time subject of this brief note, spit out to you in 45 minutes before we head to Kumasi, and then Asankrangwa in Ghana. Call this insurance in case we get into Asankrangwa and the Internet lights are all out.

The Esaase District Asankrangwa covers 456 square kilometers across five contiguous concessions. As Ticker Trax subscribers know from almost two years ago, Dr. Dan McCoy of Keegan gave me the entire rundown on that company’s far smaller concession well before the stock went into orbit. Now, Keegan is $500 million-plus with a fresh $185 Canadian in the bank (bought-deal). AGG, in pale comparison,strikes a lonely $80 million market cap. But that was before I visited Kobada … and now, with our purchase alert on AGG as of Monday, the stakes are rising.

As in: AGG shares are 88 cents and closing in on their one-year high. Down and dirty (since I intend to purchase the shares myself and want to do so as soon as possible) At Asankrangwa, Mr. Nikiforuk points out that AGG controls 94 percent of the northern part of that belt and therefore 100% of the blue sky. “They are banging into our borders already,” Michael says about Keegan.

Aside from the work AGG is performing as I write this at its prime Ghana property, the similarities between Asankrangwa and Kobada are spooky.More on that later. As for Ghana, “The placer across the Esaase pointed Dan and his folks to the lode deposit of 5 million ounces; they found the source of the placer. Our area of that belt is swarming with placer,” says Michael. We’ll know when the first RC rigs show up at Asankrangwa when we land at Kumasi later this evening. Dr. Downing and Mr. Lalande at Kobada are following the theory that Kobada is severely understated because of small sample sizes of dirt and rock sent first to the Mali capital of Bamako (ALS Laboratories). Now larger samples are going to Ouagadougou in Burkina Faso for leachwell assays that can capture some of that nuggety gold.

This is all for now. I would like to leave you with something Mr. Lalande and Dr. Downing drilled into my nuggety brain at Kobada and the adjoining Foroko North. That is that a proprietary MMI technique owned by SGS might do justice to an extensive auguring orientation program. “This is designed to identify the mineralization way below the duricrust of the property.”

Folks, I will be dismayed if the shares here travel farther north before I get a chance at them. But as you know the rules, you all get first shot as of this past Monday. In the meantime, we have an entire year of drill results to peruse from Mali … and from Ghana. In the 10 percent or greater chance that a set of those holes locates a significant mesothermal ore body (above 2 million ounces at Kobada and WHO KNOWS at Asankrangwa), the equity of AGG, with its $14 million in the bank and no immediate financing schedule, is worth three to five times current value.

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THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom was founding editor of MarketWatch, CBS MarketWatch and FT MarketWatch. He was the voice of Thom Calandra’s StockWatch and The Calandra Report. Thom has been covering life-sciences and natural resources since 1988.