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African Gold Group, Inc. Feasibility Study Drilling On 25 Meter Centers Gold Mineralization1 Km South Of (2011) 43-101 Resources Estimate – Kobada Remains Open Along Strike, At Depth And West

8 May 2013

African Gold Group, Inc., (“AGG” or the “Company”) is pleased to report the analytical results for 57 near surface (oxide), reverse circulation (RC) southern step out drill holes from the Company’s Kobada, Mali gold project.

Near Surface (Oxide) Drill Highlights From Southern Step Out RC Holes Include:

  • KBRC11-043*: 52 m @ 1.02 g/t Au
  • KBRC11-045*: 47 m @ 0.77 g/t Au
  • KBRC12-036:   29 m @ 0.86 g/t Au
  • KBRC12-044:   56 m @ 0.91 g/t Au
  • KBRC11-055*: 35 m @ 0.9 g/t Au
  • KBRC11-056*: 18 m @ 1.18 g/t Au
  • KBRC11-059*: 14 m @ 3.08 g/t Au
  • KBRC11-071:   38 m @ 1.01 g/t Au
  • KBRC11-076:   30 m @ 0.75 g/t Au
  • KBRC11-093:   27 m @ 1.28 g/t Au
  • KBRC11-088:   15 m @ 7.38 g/t Au

The assay results detailing mineralized intercepts for the 57 near surface (oxide) southern step out RC holes are listed in Table 1 below:

TABLE 1

Section Hole ID From (m) To (m) Length (m) Grade g/t Au Depth Azimuth Objective
3000S

 

 

 

KBRC11-043*

including

 

 

21

49

66

93

73

50

67

99

52

1

1

6

1.02

10.14

10.96

0.56

102

 

 

 

 

 

 

 

Southern step out from 2011 Resource

 

 

 

3000S

 

KBRC11-045*

 

2

66

49

74

47

8

0.77

0.33

82

 

Southern step out from 2011 Resource

 

3050S

 

 

KBRC12-032

 

 

3

14

39

6

27

42

3

13

4

3.21

0.36

2.98

75

 

200

 

Infill to 2011 Resource

 

 

3050S KBRC12-033 9 12 3 0.79 75 200 Infill to 2011 Resource
3053S KBRC12-034 NSR 84 200 Infill to 2011 Resource
3100S KBRC12-035 NSR 75 200 Infill to 2011 Resource
3100S

 

 

KBRC12-036

 

 

0

36

50

26

43

53

26

7

3

0.90

0.47

0.33

81

 

200

 

Infill to 2011 Resource

 

 

3100S

 

KBRC12-037

 

52

63

55

63

3

6

0.41

0.66

81

 

200

 

Infill to 2011 Resource

 

KBRC12-038 NSR 99 200
3250S

 

 

KBRC12-039

 

 

1

25

90

15

52

93

14

27

3

0.83

0.38

0.54

93

 

200

 

Infill to 2011 Resource

 

 

3250S

 

 

KBRC12-040

 

 

22

50

73

41

57

93

19

7

20

0.57

1.39

0.75

93

 

200

 

Infill to 2011 Resource

 

 

3250S KBRC12-041 20 49 29 0.86 81 200 Infill to 2011 Resource
3250S KBRC12-042 1 7 6 0.61 75 200 Infill to 2011 Resource
3300S

 

KBRC12-043

 

0

88

3

91

3

3

0.45

0.38

93

 

200 Infill to 2011 Resource

 

3300S

 

KBRC12-044

 

0

71

56

76

56

5

0.91

0.74

87

 

200 Infill to 2011 Resource

 

3300S

 

 

KBRC12-045

 

 

52

60

71

55

64

74

3

4

3

0.44

1.09

0.33

96

 

200

 

Infill to 2011 Resource

 

 

3350S

 

 

 

KBRC11-054*

 

 

 

0

28

51

77

3

37

55

100

3

9

4

23

0.43

0.47

0.76

0.58

100

 

200

 

Southern step out from 2011 Resource

 

 

 

3350S

 

 

 

KBRC11-055*

 

 

 

1

25

45

65

8

38

49

100

7

13

4

35

0.47

1.18

13.16

0.47

100

 

200

 

Southern step out from 2011 Resource

 

 

 

3350S

 

 

 

 

KBRC11-056*

 

including

 

 

1

15

32

41

86

4

33

33

54

100

3

18

1

13

14

0.47

1.18

13.16

0.47

0.29

100

 

200

 

Southern step out from 2011 Resource

 

 

 

Ended in mineralization

3400S

 

 

KBRC11-058*

 

 

0

16

62

4

37

65

4

21

3

0.49

0.70

0.49

100

 

200

 

Southern step out from 2011 Resource

 

 

3400S

 

KBRC11-059*

 

0

30

3

44

3

14

0.57

3.08

45

 

200

 

Southern step out from 2011 Resource

Ended in Mineralization

3400S

 

 

KBRC11-059A*

 

 

27

80

92

37

83

95

10

3

3

0.43

0.33

0.58

100

 

200

 

Southern step out from 2011 Resource

 

3400S

 

 

 

KBRC11-060*

 

 

 

0

22

46

64

3

29

55

100

3

7

9

36

1.68

1.31

0.34

0.61

100

 

200

 

Southern step out from 2011 Resource

 

3450S KBRC12-046 0 3 3 0.33 75 200 Infill to 2011 Resource
3450S KBRC12-047 1 44 43 0.57 81 200 Infill to 2011 Resource
3450S KBRC12-048 NSR 81 200 Infill to 2011 Resource
3450S

 

 

KBRC12-049

 

 

35

56

73

41

59

78

9

3

5

0.75

0.63

0.35

81

 

200

 

Infill to 2011 Resource
3500S KBRC12-050 NSR 81 200 Infill to 2011 Resource
3500S

 

 

KBRC12-051

 

 

0

20

72

8

63

75

8

43

3

1.14

0.47

0.37

93

 

200

 

Infill to 2011 Resource

 

3500S

 

 

KBRC12-052

 

 

0

38

81

23

41

84

23

3

3

0.49

0.31

0.37

87

 

200

 

Infill to 2011 Resource

 

3500S KBRC12-053 79 87 8 0.32 87 200 Infill to 2011 Resource
3600S KBRC11-0070 1 12 11 0.35 100 200 Southern step out from 2011 Resource
3600S

 

 

 

KBRC11-071

including

 

 

2

 

75

88

40

 

78

99

38

1

3

11

1.01

12.33

0.41

0.94

100 200

 

Southern step out from 2011 Resource

 

3600S

 

 

 

KBRC11-072

 

 

 

20

41

49

77

34

44

56

80

0.96

0.37

1.19

0.34

100

 

200

 

Southern step out from 2011 Resource

 

3650S KBRC12-054 70 73 3 0.62 93 200 Infill to 2011 Resource
3650S KBRC12-055 24 29 5 0.46 93 200 Infill to 2011 Resource
3650S KBRC12-056 NSR 111 200 Infill to 2011 Resource
3650S

 

 

 

 

KBRC11-096

 

 

 

including

33

53

93

104

36

62

96

108

3

9

3

4

1

0.48

0.87

0.33

4.21

13.60

108 200 Southern step out from 2011 Resource

 

3700S

 

KBRC12-057

including

 

 

15

15

27

89

18

16

40

92

3

1

13

3

5.80

14.80

0.39

0.37

93

 

200

 

Infill to 2011 Resource

 

3700S KBRC11-076 57 87 30 0.75 100 200 Southern step out from 2011 Resource
3700S KBRC12-058 NSR 111 200 Infill to 2011 Resource
3700S

 

KBRC11-093

 

19

72

22

99

3

27

0.66

1.28

100

 

200

 

Southern step out from 2011 Resource

 

3700S KBRC11-094 54 59 5 1.55 100 200 Southern step out from 2011 Resource
3750S KBRC12-058 NSR 111 200 Infill to 2011 Resource
3750S

 

KBRC11-087

 

22

54

31

57

9

3

0.74

0.44

100 200 Southern step out from 2011 Resource
3750S KBRC11-088

 

46

76

61

79

15

3

7.38

0.33

100

 

200

 

Southern step out from 2011 Resource
3750S

 

 

KBRC11-089

 

 

37

61

97

41

64

100

4

3

3

1.87

0.46

0.40

100

 

200

 

Southern step out from 2011 Resource

 

  1. 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
  2. Up to 7 m of horizontal “waste” included within mineralized intercept
  3. * previously published, re-published to complete line drilled
  4. NSR: no significant results

“Today’s results have extended drilling on 25 meter centers for a total of one kilometer south of AGG’s resources estimate that was published as part of a press release issued on July 14, 2011. At present, the overall strike length of the Kobada gold project now stands at 3,200 meters, representing an increase in strike length of 1,500 meters, relative to the 1,700 meters of strike length reported in the July 14, 2011 press release that detailed the results of the Kobada Preliminary Economic Assessment. We are encouraged to report that Kobada remains open along strike in both directions (north/south), at depth and to the west of the current resource,” states AGG President, Michael A. Nikiforuk.

Kobada Review

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 either the 2011 or 2012 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 14, 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 fully focused on transitioning from an exploration / development company into a gold producer. In conjunction with this objective, a full Feasibility Study is currently underway for AGG’s Kobada, Mali gold project. The Company is projecting the Feasibility Study will be completed in Q4/2013, at which time, the Company will submit an application to obtain an Exploitation License to the appropriate Malian authorities.

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.
11th Floor
Toronto, Ontario
M5C 2W7

Phone: 647-775-8538
Fax: 647-775-8301

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.