TORONTO, ONTARIO--(Marketwire - Dec. 13, 2011) - African Gold Group, Inc., ("AGG" or the "Company") (TSX VENTURE:AGG) is pleased to report that drilling has resumed and is well underway at AGG's Kobada, Mali gold project.
Post rainy season drilling, commencing November 2011, through to July 2012, is referred to as the 2012 drill campaign.
The 2011 drill campaign, commencing November 2010 through to July 2011, focused 100% on step-out exploration drilling along strike, to the north and south of the Zone 1, 43-101 deposit. In addition, 2011 step-out drilling also tested off trend targets that resulted in the announcement of the discovery of new gold zones located at Foroko North (4.3 km north of Zone 1 deposit), The Termite Zone (1.5 km south-east of Zone 1 deposit) and the Gosso Zone (5 km east of Zone 1 deposit).
On August 23, 2011, AGG announced that the Government of Mali's Minister of Mines granted AGG an extension of its Kobada, Mali exploration license to facilitate AGG completing a Feasibility Study for the Kobada (Mali) gold project. The submission of a positive Feasibility Study is required for securing an Exploitation (Mining) License. (Please activate the link to view the complete Aug 23, 2011 press release: http://africangoldgroup.com/index.php?option=com_content&view=article&id=198:mali-minister-of-mines-grants-extension-of-kobada-license-in-order-to-complete-feasibility-study-for-kobada-mali-gold-project&catid=54:2011&Itemid=161.
AGG's 2012 drill program is focused on achieving two primary goals that pertain to the completion and submission of a positive Feasibility Study for the Kobada (Mali) gold project:
1. Increase the strike length of the 43-101 Zone 1 deposit from 1.7
kilometers (contained within Section 1100S - 2800S) to 3.15 kilometers
of strike length (contained within Section 650S - 3800S), representing a
potential 185% increase in (relative) strike length.
2. Upgrade the classification of the 43-101 resource from the Inferred
category to the Indicated category as a result of drilling on a 50 meter
x 50 meter grid, from Section 650S through to Section 3800S (3.15
kilometers of strike).
2011 step-out exploration drilling has encountered the presence of significant gold mineralization as far as 1.5 kilometers north of Section 1100S. The full strike extent of northern mineralization has not yet been determined. In addition, 2011 step-out exploration drilling has encountered the presence of significant gold mineralization as far as 1.55 kilometers south of Section 2800S. The full strike extent of southern mineralization has not yet been determined.
A total of 30 holes has been completed since drilling resumed on November 20, 2011. These 30 holes were drilled on a 50 meter x 50 meter grid and collectively, represent a 450 meter northern extension of the Zone 1 deposit, from Section 1100S, north through to Section 650S. Approximately 350 meters of this northern strike extension has never been RC drilled before.
AGG geologists report that drilling in this region has continued in saprolite up to 153 meters depth, down hole, at -55 degrees. This is interpreted as encouraging, from a geological perspective, as the conditions that are responsible for creating this relatively deeper saprolite profile has proven to be positive for gold mineralization, based on AGG's recent drilling, at Kobada.
On November 15, 2011 AGG issued a press release announcing the results of six northern step-out holes drilled on Section 1000S, which is contained within the 1100S - 650S boundary. Drill highlights from Section 1000S include:
Near Surface (Oxide) Drill Highlights From Section 1000S include:
KBRC11-189: 112 m @ 2.14 g/t Au, incl, 1 m @ 90.19 g/t Au, ended in
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: 12 m @ 0.89 g/t Au, ended in mineralization
At present, the drill rig has relocated to the south of the 43-101 resource and is working between Section 2900S and 3800S to complete a 50 meter x 50 meter grid that is intended to increase the Zone 1, 43-101 resource up to 1 kilometer south of the current 43-101 mineralized envelope. 2011 step-out drilling, within this region, was completed on lines that were spaced a distance of 200 meters apart. Current drilling, within this region, is being executed on a 50 meter x 50 meter grid and is in direct response to the success of the 2011 step-out program.
The analytical results of 38, near surface (oxide) RC drill holes was published by AGG in a press release dated September 15, 2011. Drill highlights included:
Near Surface (Oxide) Drill Highlights Between Section 2700S & 3400S include:
KBRC11-043: 52 m at 1.02 g/t Au, incl 1 m at 10.14 g/t Au and 1 m at 10.96
g/t Au, ended in mineralization
KBRC11-103: 24 m at 1.56 g/t Au, incl 1 m at 17.52 g/t Au, ended in
KBRC11-045: 47 m at 0.77 g/t Au
KBRC11-055: 35 m at 0.9 g/t Au, ended in mineralization,
KBRC11-056: 18 m at 1.18 g/t Au, incl 1 m at 13.16 g/t Au, hole ended in
KBRC11-058: 21 m at 0.7 g/t Au
KBRC11-059: 14 m at 3.08 g/t Au, incl 1 m at 25.44 g/t Au, hole ended in
"Activate the link to view a plan map of the Zone 1 strike extension drilling that is intended to significantly increase and upgrade the current 43-101 resource: http://media3.marketwire.com/docs/AfricanGold.jpg".
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, based on a 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 1.5 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.
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 the Company's website at www.africangoldgroup.com and on www.sedar.com and through the Company's offices at: Sun Life Financial Tower, Suite 2518, 150 King St. West, Toronto, Canada M5H 1J9.
On Behalf of the Board:
Michael A. J. Nikiforuk, President, DirectorThe TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.