September 27, 2005 10:01 ET

AXMIN Regains Control of Kofi Project Area, Mali and Announces Updated Resource Estimate

TORONTO, ONTARIO--(CCNMatthews - Sept. 27, 2005) - AXMIN Inc. (TSX VENTURE:AXM) is pleased to announce that it has regained control of four exploration permits, comprising the Kofi Project Area, in Mali following the withdrawal of a subsidiary of Newmont Mining Corporation (NEM-NYSE & ASX; NMC-TSX) from a joint venture over these permits. The Kofi North, Netekoto-Kenieti, Walia West and Walia permits, collectively referred to as the "Kofi Project Area", adjoin Randgold Resources Limited's Loulo project on the north and east sides - they cover the northern extension of the same host rock and structures that contain the Loulo and Yalea deposits for which Randgold previously announced a total measured, indicated and inferred resource of approximately 8 million ounces.

During the two year joint venture exploration program, which combined reconnaissance drilling of targets with substantial amount of effort in understanding controls of gold mineralisation on Loulo style structures, Newmont fulfilled its requirement to expend US$2.5 million. According to the terms of the joint venture Newmont would have been obligated to expend a further US$3 million in the third year to earn 50% of AXMIN's interest in the permits. Thereafter Newmont could have earned up to 75% of AXMIN's interest by funding the project through to completion of a positive bankable feasibility study on or before the 7th anniversary of the joint venture agreement (dated September 26, 2003) and if then not completed would have been obligated to make escalating annual advance payments to AXMIN until done so. More recently AXMIN carefully considered an alternative proposal from Newmont whereby Newmont would earn a reduced equity interest under different terms. However, this proposal was not considered to be in the best interests of the Company.

Deputy Chairman and President Dr Michael Martineau comments "With current gold prices and our objective of defining further deposits in west Africa capable of hosting over 1 million ounces and suitable for timely development, the return of the strategically located and highly prospective Kofi Project Area could not have come at a better time. The Newmont joint venture was entered into at a time of much lower gold prices and of our need to focus funds on the definition of resources on the Bambari Permits in the Central African Republic ("CAR"). As a result of this approach AXMIN recently announced the initiation of a pre-feasibility study at Bambari based on over 2 million ounces of total resources, being an indicated mineral resource of 1.072 million ounces (13.2 Mt grading 2.5 g/t Au) plus an inferred mineral resource of 1.109 million ounces (19.3 Mt grading 1.8 g/t Au) - this resource was previously announced on July 5, 2005 and prepared by independent consultants SRK Consulting. Having achieved our objective at Bambari we are delighted to be able to conduct our own sole-risk programs to drill test the many targets identified across the Kofi Project Area in parallel with our continuing work in the CAR. Details of the Kofi Project Area programs will be announced after we have completed our review of the joint venture data. However, we are already encouraged that as a result of a study commissioned by AXMIN from SRK Consulting we are able to announce an updated and increased resource estimate (see below) for the first two structures, both of which are open along strike."

Following drilling carried out under the joint venture AXMIN recently commissioned independent consultants SRK Consulting of the United Kingdom ("SRK") to prepare an updated in-situ mineral resource estimate on two adjacent blocks of mineralisation at the Kofi Project Area, known as Kofi SW Zone B and Kofi SW Zone C. The table below provides a detailed summary statement of the mineral resource estimate (with the cut off grade taken at 1.0 g/t Au) for these two blocks, which are located 2.3 kilometres apart:

Indicated Mineral Resource Inferred Mineral Resource
Tonnes Grade Ounces Tonnes Grade Ounces
(Kt) (g/t Au) (Au) (Kt) (g/t Au) (Au)

Zone B oxide 415 3.2 45,000 500 2.7 45,000
sulphide - - - 500 2.6 40,000

Zone C oxide - - - 430 4.4 60,000
sulphide - - - 600 5.2 100,000

Total oxide 415 3.2 45,000 930 3.5 105,000
sulphide - - - 1,100 4.0 145,000

Total 415 3.2 45,000 2,030 3.8 250,000

Grade interpolation was carried out using ordinary kriging. Classification of the mineral resource is based on quality control data, geological continuity and borehole spacing.

The updated mineral resource estimate has been based on some 15,800 metres of core, reverse circulation ("RC") and rotary air blast ("RAB") drilling completed across the resource blocks. The mineral resource estimate has been compiled in accordance with National Instrument 43-101 by independent consultants SRK, under the supervision of Mr Martin Pittuck (CEng, MIMMM), Principal Resource Geologist. SRK's report will shortly be available on the SEDAR website. The indicated resources were established from drilling on 40 metre fence spacings at Kofi SW Zone B and 20-80 metre fence spacings at Kofi SW Zone C, and to a maximum vertical depth of 130 metres at Kofi SW Zone B and 170 metres at Kofi SW Zone C. SRK considers the mineral resource to be in discrete veins which carry grades giving reasonable prospects for economic extraction, however further technical studies are required before mineral reserves can be estimated.

Chief Executive Officer Dr Jonathan Forster comments "AXMIN's management is excited about redeveloping its own programs on the Kofi Project Area, where multiple targets with potentially economic drill intersections have been identified with previous reconnaissance drilling. Especially given Randgold's recently reported discoveries at depth at both Loulo and Yalea, on the adjacent property, which demonstrate that large and high grade deposits can be discovered in this district below relatively narrow surface structures."

AXMIN is a mineral exploration company with a strong focus on gold in highly prospective properties across central and west Africa.

For more information regarding AXMIN visit our website at

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • AXMIN Inc.
    Jon Forster
    Chief Executive Officer
    +44 (0)1233 665600 (UK)
    AXMIN Inc.
    Judith Webster
    Manager - Investor Relations
    (416) 368-0993 (Canada)