ROBUST GROWTH CONTINUES AT ZONE 1 NORTH – KOBADA, MALI
TORONTO, CANADA, March 20, 2012 – African Gold Group, Inc., (“AGG” or the “Company”) is pleased to report the analytical results for eight, near surface (oxide), reverse circulation (RC), step-out drill holes from the Company’s Kobada, Mali gold project. All eight holes represent northern step out holes that were collared up to 200 meters north of AGG’s current, 43-101, Zone 1, inferred resource.
Near Surface (Oxide) Drill Highlights From Northern Step-Out Holes Include:
- KBRC12-006: 70 m @ 1.83 g/t Au & 45 m @ 1.79 g/t Au, ended in mineralization
- KBRC12-003: 27 m @ 0.47 g/t Au & 84 m @ 1.26 g/t Au, ended in mineralization
- KBRC12-004: 21 m @ 1.07 g/t & 9 m @ 1.80 Au
- KBRC12-005: 21 m @ 1.15 g/t Au
The assay results detailing the 8 near surface, (oxide) northern step-out RC holes that were collared up to 200 meters north of the Zone 1 resource are listed in Table 1 below:
|Section||Hole ID||From (m)||To (m)||Length (m)||AU (g/t)||EOH (m)||AZIMUTH (Deg. TN)||Hole Objective|
|1000S||KBRC 12-001||5||20||15||0.98||117||200||Test Zone 1 North extension|
|950S||KBRC 12-002||10||17||7||1.60||111||200||Test Zone 1 North extension|
|92||95||3||0.85||Hole Ended in mineralization|
|950S||KBRC 12-003||9||29||20||0.55||129||200||Test Zone 1 North extension|
|45||129||84||1.26||Hole Ended in mineralization|
|950S||KBRC 12-004||0||21||21||1.07||Test Zone 1 North extension|
|900S||KBRC 12-005||11||16||5||1.09||129||200||Test Zone 1 North extension|
|900S||KBRC 12-006||16||86||70||1.83||141||200||Test Zone 1 North extension|
|including||140||141||1||18.58||Hole Ended in mineralization|
|900S||KBRC 12-007||2||15||13||0.64||129||200||Test Zone 1 North extension|
|900S||KBRC 12-008.||3||14||11||0.89||123||200||Test Zone 1 North extension|
- Significant drilled intercepts have a minimum length of 3m at 0.3 g/t or the product “Length X Grade” greater than 0.9 g.m/t. Intercepts are drilled lengths and may not be true width within a structure dipping 70 degrees to 80 degrees
- Up to 7 m of horizontal “waste” included within mineralized intercept
AGG’s management is most encouraged with today’s drill results as they represent the continuation of significant drill intercepts encountered within the near surface, oxidized profile of the deposit. More specifically, AGG reported near surface drill results for six RC drill holes that were collared up to 100 meters north of the Zone 1, 43-101 resource in a press release dated November 15, 2011.
Highlight drill intercepts from the first set of northern step out holes, collared up to 100 meters north of the Zone 1, 43-101 resource, reported November 15, 2011 included:
- KBRC11-189: 112 m @ 2.14 g/t Au, incl, 1 m @ 90.19 g/t Au, ended in mineralization
- KBRC11-192: 88 m @ 1.66 g/t Au, incl 2 m @ 25.60 g/t Au
- KBRC11-191: 55 m @ 0.79 g/t Au, incl 1 m @ 15.06 g/t Au
- KBRC11-190: 42 m @ 0.96 g/t Au, incl 1 m @ 12.42 g/t Au
- KBRC11-193: 12m @ 0.89 g/t Au, ended in mineralization
“We continue to remain focused on development of the near surface oxidized resource at our Kobada gold project. Today’s results clearly show the continuing presence of robust gold mineralization extending as far as 200 meters north of our current Zone 1 resource, where highlight hole KBRC12-003, collared directly on strike from KBRC11-189, intercepted 70 meters at 1.83 g/t Au and 45 meters at 1.79 g/t Au. Both of these holes ended in mineralization,” states AGG Vice President, Exploration, Dr. Kevin Downing.
“In addition to demonstrating a strike extension of at least 200 meters north, the holes released here define a mineralized corridor that exceeds 100 meters in lateral width that is associated with an oxidation depth in the magnitude of 100 vertical meters. The mineralization contained within these northern step out holes is well distributed down several of the holes, and is as strong as any gold mineralization encountered in the Zone 1 resource to date.”
“We are very optimistic that mineralization of this strength will continue as our drill program extends further north, along strike,” announces Downing. “In this region of our Zone 1 deposit, we are observing that the depth of drilling that is required to encounter fresh rock continues to be in excess of 140m down hole. As a result, we expect that our northern step out holes will have a very positive impact on our 2012 revised resource estimate,” concludes Downing.
On July 14, 2011 AGG announced the results of a positive NI 43-101 Preliminary Economic Assessment (the “PEA” or the “Study”) that evaluates the potential of an open pit, bulk mining model, utilizing a gravity recovery process plant, at the Company’s Kobada (Mali) gold project. The PEA incorporates and includes drill data up to the end of December, 2010. There is no drill data from the 2011 campaign included in the PEA. More specifically, the PEA does not incorporate drill data for the northern extension holes that hold potential to extend Zone 1 up to 2 kilometers north of the Zone 1 deposit, in addition, the PEA does not incorporate the 2011 southern holes that hold potential to extend Zone 1 up to 1.55 kilometers south of the Zone 1 deposit, nor does the Study include any potential from the newly discovered Foroko North deposit, the newly discovered Termite Zone or the recently announced Gosso discovery zone, the latter three discovery zones being separate and distinct structures from Zone 1
Project Economics – Base Case
The PEA estimates an after-tax Net Present Value (NPV) of US$216.9 million from commencement of construction and an after-tax Internal Rate Of Return (IRR) of 90.57% using a base case of US$1,100 per ounce of gold and a discount rate of 5%.
The Kobada project base case is for processing 20,000 tonnes per day for a total of 7,000,000 tonnes per year in a gravity process plant that is projected to recover 87.9% of the gold contained in 41,750,000 tonnes of lateritic material assaying 0.64 g/t Au, for average annual production of 126,600 ounces of gold for the first five years of operation. The average annual operating cost is calculated to be US$8.27/t for the first five years of operation with a CAPEX of US$122,500,000. The project produces gold at the direct cost of US$470.90 per ounce. The Study demonstrates that the Kobada gold project is economically optimized by adopting bulk mining versus selective mining. The direct implications of bulk mining are demonstrated in a substantial increase in tonnage and recoverable gold but with an associated decrease in the average gold grade. Please visit www.africangoldgroup.com to review the entire content of AGG’s July 13, 2011 press release announcing the results of the positive Preliminary Economic Assessment.
Sampling – QA/QC Program
RC cuttings are recovered at the bottom outlet of the RC rig cyclone into 50-kg capacity poly-weave bags to recover the cuttings from each 1 meter of drill penetration. Each one meter sample weighs an average of approximately 19 to 23 kg. Each sample is passed through a 3-tier Jones Riffler (1 to 8 split), the samples are riffled twice to obtain from 3 to 5 kg of cuttings which are put in a numbered sample bag. Each bag is sealed and picked up on site by ALS Chemex Laboratories for delivery to its Burkina Faso facilities. The remaining 14 to 18 kg of cuttings (field rejects) are stored in camp under tarps to protect the bags against the elements.
Original samples are analyzed using Leachwell on 2 kg of pulp. Leachwell is a bottle roll cyanidation procedure with the addition of a catalyst to speed up gold dissolution. A QA/QC program is in place and includes: blank (1 in 20 samples), duplicates (1 in 20), standards (1 in 20), external lab checks (1 in 30) and two different analytical procedures checks (1 in 100).
Under the guidelines of National Instrument 43-101, the qualified person for the Kobada Gold Project is Mr. Pierre Lalande, P. Geo. Mr. Lalande is a member of the Association of Professional Geoscientists of Ontario and has reviewed and approved the contents of this news release.
African Gold Group, Inc., based in Toronto, Canada, is engaged in the identification, acquisition and exploration of prospective gold projects that are situated along significant gold trends within West Africa. To date, the Company controls a total of eleven gold concessions that are consolidated in four distinct stand alone exploration projects. Three of these projects are located in Ghana and one project (Kobada) is located in Mali, West Africa.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.
Additional Information is available on www.sedar.com or at
AFRICAN GOLD GROUP INC.
151 Yonge St.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release includes certain “Forward-Looking Statements.” All statements, other than statements of historical fact included herein, including without limitation, statements regarding future plans and objectives of African Gold Group; and statements regarding the ability to develop and achieve production at Kobada are forward-looking statements that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from African Gold Group’s expectations have been disclosed under the heading “Risk Factors” and elsewhere in African Gold Group’s documents filed from time-to-time with the TSX Venture Exchange and other regulatory authorities. African Gold Group disclaims any intention or obligation to update or revise any forward looking statements whether resulting from new information, future events or otherwise, except as required by applicable law.