African Gold Group, Inc.
TSX VENTURE : AGG

African Gold Group, Inc.

May 08, 2013 09:00 ET

African Gold Group, Inc. Feasibility Study Drilling on 25 Meter Centers Pushes Au Mineralization 1 km South of (2011) 43-101 Resources Estimate-Kobada Remains Open Along Strike, at Depth and West

TORONTO, ONTARIO--(Marketwired - May 8, 2013) - African Gold Group, Inc., ("AGG" or the "Company") (TSX VENTURE:AGG) 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 To Length Grade g/t Au Depth Azimuth Objective
3000S KBRC11-043* 21 73 52 1.02 102 Southern step out from 2011 Resource
incl 49 50 1 10.14
66 67 1 10.96
93 99 6 0.56
3000S KBRC11-045* 2 49 47 0.77 82 Southern step out from 2011 Resource
66 74 8 0.33
3050S KBRC12-032 3 6 3 3.21 75 200 Infill to 2011 resource
14 27 13 0.36
38 42 4 2.98
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 26 26 0.9 81 200 Infill to 2011 resource
36 43 7 0.47
50 53 3 0.33
3100S KBRC12-037 52 55 3 0.41 81 200 Infill to 2011 resource
63 69 6 0.66
KBRC12-038 NSR 99 200
3250S KBRC12-039 1 15 14 0.83 93 200 Infill to 2011 resource
25 52 27 0.38
90 93 3 0.54
3250S KBRC12-040 22 41 19 0.57 93 200 Infill to 2011 resource
50 57 7 1.39
73 93 20 0.75
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 3 3 0.45 93 200 Infill to 2011 resource
KBRC12-043 88 91 3 0.38
3300S KBRC12-044 0 56 56 0.91 87 200 Infill to 2011 resource
71 76 5 0.74
3300S KBRC12-045 52 55 3 0.44 96 200 Infill to 2011 resource
60 64 4 1.09
71 74 3 0.33
3350S KBRC11-054* 0 3 3 0.43 100 200 Southern step out from 2011 Resource
28 37 9 0.47
51 55 4 0.76
77 100 23 0.58
3350S KBRC11-055* 1 8 7 0.33 100 200 Southern step out from 2011 Resource
25 38 13 0.53
45 49 4 0.77
65 100 35 0.9
3350S KBRC11-056* 1 4 3 0.47 100 200 Southern step out from 2011 Resource
15 33 18 1.18
incl 32 33 1 13.16
41 54 13 0.47
86 100 14 0.29 Ended In Mineralization
3400S KBRC11-058* 0 4 4 0.49 100 200 Southern step out from 2011 Resource
16 37 21 0.7
62 65 3 0.49
3400S KBRC11-059* 0 3 3 0.57 45 200 Southern step out from 2011 Resource
30 44 14 3.08 Ended In Mineralization
3400S KBRC11-059A* 27 37 10 0.43 100 200 Southern step out from 2011 Resource
80 83 3 0.33
92 95 3 0.58
3400S KBRC11-060* 0 3 3 1.68 100 200 Southern step out from 2011 Resource
22 29 7 1.31
46 55 9 0.34
64 100 36 0.61
3450S KBRC12-046 0 3 3 0.3 75 200 Infill to 2011 resource
3450S KBRC12-047 1 44 43 0.57 87 200 Infill to 2011 resource
3450S KBRC12-048 NSR 81 200 Infill to 2011 resource
3450S KBRC12-049 35 41 6 0.75 81 200 Infill to 2011 resource
56 59 3 0.63
73 78 5 0.35
3500S KBRC12-050 NSR 81 200 Infill to 2011 resource
3500S KBRC12-051 0 8 8 1.14 93 200 Infill to 2011 resource
20 63 43 0.47
72 75 3 0.37
3500S KBRC12-052 0 23 23 0.49 87 200 Infill to 2011 resource
38 41 3 0.31
81 84 3 0.37
3500S KBRC12-053 79 87 8 0.32 87 200 Infill to 2011 resource
3600S KBRC11-070 1 12 11 0.35 100 200 Southern step out from 2011 Resource
3600S KBRC11-071 2 40 38 1.01 100 200 Southern step out from 2011 Resource
incl 1 12.33
75 78 3 0.41
88 99 11 0.94
3600S KBRC11-072 20 34 14 0.69 100 200 Southern step out from 2011 Resource
41 44 3 0.37
49 56 7 1.19
77 80 3 0.34
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 33 36 3 0.48 108 200 Southern step out from 2011 Resource
53 62 9 0.87
93 96 3 0.33
104 108 4 4.21
incl 1 13.6
3700S KBRC12-057 15 18 3 5.8 93 200 Infill to 2011 resource
incl 15 16 1 14.8
27 40 13 0.39
89 92 3 0.37
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 22 3 0.66 100 200 Southern step out from 2011 Resource
KBRC11-093 72 99 27 1.28
3700S KBRC11-094 54 59 5 1.55 100 200 Southern step out from 2011 Resource
3750S KBRC12-059 NSR 111 200 Infill to 2011 resource
3750S KBRC11-087 22 31 9 0.74 100 200 Southern step out from 2011 Resource
KBRC11-087 54 57 3 0.44
3750S KBRC11-088 46 61 15 7.38 100 200 Southern step out from 2011 Resource
KBRC11-088 76 79 3 0.33
3750S KBRC11-089 37 41 4 1.87 100 200 Southern step out from 2011 Resource
KBRC11-089 61 64 3 0.46
KBRC11-089 97 100 3 0.4
  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 (http://www.africangoldgroup.com/index.php?option=com_content&view=article&id=197%3Aafrican-gold-group-inc-positive-preliminary-economic-assesment-generates-2169-million-npv-and-90-irr&catid=54&Itemid=161) (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 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, Director

Neither the 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.

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