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Report on AGG in Ticker Trax by Thom Calandra – (2 of 3)

23 February 2011

AGG Concessions Might Be Crown Jewel – by Thom Calahandra

MOSEASE, Ghana – Pictures truly are worth a king’s ransom of paragraphs in gold-dusted Ghana, where we have unearthed what we think is the next Marmato miracle.

Ticker Trax subscribers received our real-time report, and some of the following pictures, on Monday. Now, on site at African Gold Group Inc.’s (TSX: V.AGGStock Forum) Kobada Gold Project in Mali and presently, its Asankrangwa concession in Ghana, I can say: Michael Nikiforuk’s AGG was below fair value at 75 cents Canadian a share. That was when subscribers got the word earlier this week.

After three days of four-wheeling across Mali and Ghana, I have witnessed first-hand the presence of orpaillagegold pillagers at Koboda and a flock  of galamsay Ghana alluvial miners adjacent to Keegan Resources Inc.’ (TSX: T.KGNStock Forum) and (AMEX: KGNStock Forum) pricey patch of Esaase real estate. (See photo here: two illegal miners at a makeshift shaft straddling the properties of Keegan Resources and African Gold Group – photo today February 17, 2011/Thom Calandra)

The Ghana property controlled by African Gold Group is several times the size of infamous Marmato in Colombia … and likely will spark political and popular uproar in Ghana, which is headed to a 2012 presidential election. Wealth comes at a price. “”You fall on these rocks, they are not forgiving,” says African Gold Group’s lead Ghanaian geologist Kwame Opoku as we navigate our way around the richest and most overrun gold concessions I have seen since Medoro’s Marmato in Colombia. (Please see our Ticker Trax password-protected archives and our free Stockhouse coverage for the entire Marmato saga.)

For the sake of speed, efficiency and investor awareness, this free report, deliver first to our subscribers, is Part I of II. I am still on site as we publish this report.

  • PhD. geologists Kevin Downing of 9-year-old African Gold Group and geology consultant Derek McBride, another doctor of earth sciences, accompany Mr. Opoku and me at Assuowunu, which is directly adjacent to Keegan’s  well financed Esaase project. (Photo in this article, above, of Dr. McBride examining porphyry near a galamsay digging on AGG property.)
  • Dr. Downing and President Michael Nikiforuk — along with AGG director and longtime West Africa prospector Pierre Lalande — have shown me dirt, data, veins and orpaillage (gold pillager workings) 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. The first 22 holes of a 200-reverse circulation program are due in three weeks or less (after 170 holes that already proves much of the prospecting model that Mr. Lalande and Dr. Downing share in their zeal.
  • In Ghana, Keegan’s Esaase District is said to be worthy; I received a tour from Keegan’s Dr. Dan McCoy about 18 months ago. In comparison, AGG’s poison-pill-protected Asankrangwa covers 456 square kilometersacross five contiguous concessions. Keegan is a $500 million-plus market worth with a fresh $185 million Canadian in the bank (bought-deal). AGG, in pale comparison, strikes a lonely $90 million market cap. (That was before we visited Kobada this week … and now, with our purchase alert on AGG as of Monday, the investor stakes are rising.)
  • The risk factors at Asankrangwa are significant. The area, as reported here, is swarming with illegal miners. Villagers are falling into makeshift shafts and open pits of placer ponds. They are suffocating and drowning, several in recent months and as many as 20 in 2008 at one site here at Asankrangwa. “That was in late ’08 after we had drilled some holes and the galamsay came from everywhere,” says Mr. Opoku, 49 and a Ghana-trained geologist.
  • At Asankrangwa, Mr. Nikiforuk points out that AGG controls 94 percent of the northern part of that belt and therefore 100 percent of the blue sky. “They are banging into our borders already,” Michael Nikiforuk says about Keegan. Indeed, as a photo here shows, Keegan has Geodrill reverse circulation drill rigs, on massive crawlers, cruising through AGG property, barely skirting historic and pre-colonial Ashanti pits at the sides of dirt roads. “They look like they are drilling the same trend that AGG diamond-drilled three years ago,” says Dr. McBride.
  • Aside from the work AGG is performing as I write this at its prime Ghana property, the similarities between Asankrangwa in Ghana and Kobada in Mali are spooky. More on that later.
  • As for Ghana, “The placer across the Esaase pointed Dan (McCoy, Keegan geologist and a former CEO) and his folks to their lode deposit of 5 million ounces; they found the source of the placer. Our area of that belt is swarming with placer,” says Michael Nikiforuk. I testify to that.
  • In Mali, 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.
  • Folks, as of today, after our subscribers had shots at AGG shares at 75 cents and 85 cents, I purchased 39,500 shares at 91 cents. I intend to buy more. 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 at Kobada in Mali 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. More to come this weekend   .

THE KIBI: After two days with AGG in Ghana, following two days in Mali, I shall be at James Longshore’s and Paul Zyla’s Apapam Concession several hours from the Esaase. This will be my third visit of Xtra-Gold Resources Corp. (TSX: T.XTGStock Forum) and (OTC: BB: XTGRStock Forum). I own shares of Xtra-Gold. And now, of AGG.

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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.