Abzu Gold Ltd.
TSX VENTURE : ABS
OTCQX : ABZUF

Abzu Gold Ltd.

June 29, 2011 16:19 ET

Abzu Gold Options 10 Red Back Ghanaian Gold Concessions From Kinross Gold Corp.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 29, 2011) - Abzu Gold Ltd. (TSX VENTURE:ABS)(OTCQX:ABZUF) ("Abzu") is pleased to announce that it has entered into an agreement with Red Back Mining Ghana Limited ("Red Back"), a wholly owned subsidiary of Kinross Gold Corporation, pursuant to which Abzu has acquired an option on (10) concessions in Ghana.

Terms of the Agreement

Abzu Gold has the right to earn 51% of Red Back's holding in these concessions by incurring exploration expenditure of a total of US$3,000,000 ($500,000 in year 1, $1,000,000 in year 2, and $1,500,000 in year 3). The government of Ghana retains a 10% free carried interest in all concessions as per mining legislation of Ghana. Once the US$3,000,000 option expenditures have been fulfilled, Abzu and Kinross will form a joint venture which Abzu will manage and to which both companies will contribute proportionately to their interest.

This agreement and commencement of work on these concessions are subject to the approval of the Ghana Minerals Commission.

Two of the concessions, Kwahu Oda and Horizon West, are temporarily being held in escrow pending finalization of approvals from the Ghana Minerals Commission with respect to the original Red Back agreements on these properties.

All of the Red Back concessions possess targets at various stages of definition ranging from robust untested gold-in-soil anomalies to multi-meter, multi-gram gold intercepts in drill holes. The concessions lie along three of Ghana's major gold-bearing belts; the Bole-Nangodi, the Sefwi, and the Ashanti Belts, and significantly expands Abzu's portfolio to more than 1,100 km2 from 350 km2. Addition of these concessions to Abzu's portfolio distributes Abzu's exploration opportunity over a strategic range of geologic environments and places Abzu as one of Ghana's leading explorers in terms of landholding size.

The most advanced targets are on the Nangodi and Yameriga concessions (Figures 1 and 2) where previous explorers have identified numerous targets, including the Nangodi Main Zone where prior drilling intercepted: 52m @ 3.24g/t Au (NGRC009), 26m @ 2.24 g/t Au (NGRC017), 51m @ 2.4 g/t Au (NGRC018), 13m @ 2.48g/t Au (NGRC019) (Figure 3) (based on incomplete, unpublished historic data provided by Red Back. This information is historic in nature and is not 43-101 compliant. A Qualified Person has not reviewed drilling or sampling procedures or QA/QC undertaken at the time of drilling. However, Abzu has no reason to doubt the validity of the information).

To view "Figure 1. Location of Red Back JV properties and current Abzu concessions in Ghana", please visit the following link: http://media3.marketwire.com/docs/abs-0629-map1.pdf

"The option to acquire an interest in the Red Back projects is a transforming event for Abzu Gold Ltd.," stated Dr. Paul Klipfel, Abzu's President. "The option to acquire an interest in these concessions dramatically advances Abzu's discovery and development strategy through expansion of our portfolio and landholdings by 300%. Abzu is now in the process of evaluating the data and prioritizing drill targets for an aggressive exploration program. Having Kinross Gold Corporation as our joint venture partner offers Abzu a significant strategic opportunity for the future development of a major discovery."

To view "Figure 2. Location map showing Nangodi and Yameriga concessions. The Youga Mine in Burkina Faso lies along strike within the belt", please visit the following link: http://media3.marketwire.com/docs/abs-0629-map2.pdf

The Properties

Bole-Nangodi Belt:

The Yameriga and Nangodi concessions cover 216 km2. These concessions cover areas previously explored by Africwest, Etruscan Resources, and Red Back and host numerous, extensive soil anomalies, some with important drill intercepts, but with minimal follow-up exploration. These targets are near the Burkina Faso border and are approximately 30 km southwest of and along strike from the Youga Mine where Endeavor Mining Corporation anticipates 2011 gold production of approximately 84,000 ounces (News Release June 13, 2011).

To view "Figure 3. Simplified cross section from the Nangodi Main Zone showing mineralized intercepts in quartz-feldspar porphyry rock", please visit the following link: http://media3.marketwire.com/docs/abs-0629-map3.pdf

In addition to the important Nangodi Main Zone, other targets include the >500m long Zupeliga Zone where past drilling by Etruscan Resources identified intercepts up to 21m @ 2.31 g/t Au and 10.5m @ 3.14 g/t Au. (This information is based on incomplete, unpublished historic data provided by Red Back. This information is historic in nature and is not 43-101 compliant. A Qualified Person has not reviewed drilling or sampling procedures or QA/QC undertaken at the time of drilling. However, Abzu has no reason to doubt the validity of the information). Extensive soil anomalies occur within the Yameriga concession and require follow-up work.

Sefwi Belt

Four concessions cover the northwest and southeast margins of the Sefwi Belt.

The Tanoso concession covers 86 km2 and lies along the northwest margin of the Sefwi Belt approximately 45 km northeast of, and along the same structure as Newmont's series of Ahafo deposits (Figure 4) where 2010 production was 545,000 oz Au (Newmont 2010 Annual Report).

In 2005, the Tanoso concession was explored by Newmont with reconnaissance stream sediment sampling and follow-up soil sampling. Soil samples outline local gold anomalies worthy of follow-up.

To view "Figure 4. Location map showing Sefwi Belt concessions, Bibiani, and Chirano Mines", please visit the following link: http://media3.marketwire.com/docs/abs-0629-map4.pdf

Three concessions, Abofour, Kasutie, and Horizon West, constitute a partly contiguous set of concessions along approximately 45 km of the southeast margin of the Sefwi Belt. Collectively these concessions are called the Bibiani North Project as they lie along the belt margin northeast of Noble Gold's Bibiani Mine, and Kinross's (formerly Red Back's) Chirano mine. Past work on these concessions by Newmont and others, includes soil sampling, ground geophysics, aircore drilling, and integration of data sets. Numerous surface anomalies and air core drill intercepts have not received comprehensive follow-up work. Gold-bearing intercepts in air core drill holes include 6m@2.63 g/t Au (ABAC093), 4m@5.87 g/t Au (ABAC 142), and 4m@6.87 g/t Au (ABAC142), and numerous other short intercepts with gold values up to 6.04 g/t Au. (This information is based on incomplete, unpublished historic data provided by Red Back. This information is historic in nature and is not 43-101 compliant. A Qualified Person has not reviewed drilling or sampling procedures or QA/QC undertaken at the time of drilling. However, Abzu has no reason to doubt the validity of the information).

Ashanti Belt

Four concessions, Amuanda Praso, Kwahu Oda, Asankare, and New Abirem (Figure 5) form a nearly contiguous land holding within the Ashanti Belt approximately 10-30 km northeast of Newmont's 7.2 M oz Akyem deposit (Newmont 2010 Annual Report), currently under construction.

The concessions overlie northeast-trending structures within the Ashanti belt and Tarkwaian sedimentary rocks known for their paleoplacer deposits to the southwest.

Past work by Newmont has identified numerous soil anomalies. Follow up trenching and drilling reveal gold-bearing intervals that include, among others: 10m @ 8.8 g/t Au (KYRC075), 8m @ 3.1 g/t Au (KYRC06) 21m @ 3,71 g/t Au (Trench AMTR010), 6m @ 3.02 g/t Au (Trench AMTR022). (This information is based on incomplete, unpublished historic data provided by Red Back. This information is historic in nature and is not 43-101 compliant. A Qualified Person has not reviewed drilling or sampling procedures or QA/QC undertaken at the time of drilling. However, Abzu has no reason to doubt the validity of the information).

To view "Figure 5. Location map of the Akyem project concessions showing targets", please visit the following link: http://media3.marketwire.com/docs/abs-0629-map5.pdf

In addition to the Red Back concessions, Abzu is pleased to announce acquisition from Jubilee Mining Company two further concessions, Nyafoman and Subriso, in the vicinity to help Abzu consolidate exploration opportunities in this region (Figure 5). These concessions will be explored along with the Red Back concessions.

The two concessions Nyafoman and Subriso (Figure 5) obtained independently by Abzu from Jubilee Mining Company Ltd. constitute a separate option agreement with Jubilee Mining Co. In this case, Abzu is required to spend US$100k per year for each of five years.

About Abzu

Abzu is a gold exploration and development company working in Ghana, Africa's 2nd largest gold producer and host to some of the world's largest gold deposits. Ghana has strong land title laws and is one of the world's most mining-friendly jurisdictions. Abzu has invested several years developing local and national relationships, key to its strategic land position on over 360 square kilometres of highly sought after and productive gold belts.

Qualified Person and Quality Control/Quality Assurance

Professional geologist (AIPG cert. # 10821) Dr. Paul Klipfel, President and a Qualified Person as defined by National Instrument 43-101, has reviewed the data and prepared the material in this disclosure. Dr. Klipfel has a PhD in economic geology and more than 33 years of relevant experience as a mineral exploration geologist. He is a Certified Professional Geologist [CPG 10821] by the American Institute of Professional Geologists. Dr. Klipfel is not independent of the Company as he is an officer and shareholder.

On behalf of the board of directors of Abzu Gold Ltd.

Allan Serwa, Chief Executive officer

This news release contains certain forward-looking statements, and such statements involve risks and uncertainties. The results or events predicted may differ materially from actual results or events. Any forward-looking statement speaks only as of the date of this news release. Except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results, or any other occurrence.

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 press release, which has been prepared by management.

Contact Information

  • Abzu Gold Ltd.
    Quentin Mai
    Manager, Corporate Communications
    604-638-3288
    qmai@abzugold.com