Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining
5 June 2007
Central African Gold Plc ("CAG" or "the Company")
Signs heads of agreement over the Kola permit, contiguous to the multi-million ounce Morila gold deposit, south Mali
Central African Gold Plc, the AIM traded gold mining and exploration company, has signed heads of agreement with Mand'e Mines SARL to form a subsidiary company for the development of the circa 300 sq km Kola permit in south Mali, whereby CAG, Mand'e Mines SARL and the Government of Mali would hold 80 per cent. 10 per cent. and 10 per cent. equity interest respectively ("Kola Permit Agreement"). The permit is situated in the prospective Birimian Gold Belt and is contiguous structurally to the circa 6 million oz Au Morila gold deposit, operated by Anglogold Ashanti and Randgold Resources. It is CAG's intention to fast-track exploration by utilising existing data and its teams' knowledge of the area to generate drill targets.
Greg Hunter, CEO of CAG, commented, "This agreement further extends our exposure to the prospective gold regions of southern Mali. The geological setting, in close vicinity to Morila, and early work already conducted on the licence all underpin our confidence in the Kola permit area. We have an extensive portfolio of exploration permits in highly prospective areas of Mali that have already yielded significant gold targets, which we believe have the potential to be economic deposits. We are advancing our projects and look forward to updating the market once further sampling and drilling results have been processed."
Kola permit background
The Kola permit is situated over lower Proterozoic age Birimian strata in south Mali, roughly 180 km east of the capital Bamako, in the Bougouni District. The property is notable for its locality, which is partly over a preserved metasedimentary package that is contiguous structurally to Morila.
In recent years (2002-2004) Anglogold (now Anglogold Ashanti) has completed regional multi-element geochemical surveys (10,651 samples), and follow-up reverse-air-blast (RAB: 43,387m) and reverse circulation (RC: 6,677m) drilling programmes. These programmes were initiated on a previous 600 sq km permit area, which subsequently has been reduced on renewal to 300 sq km. Numerous anomalous gold intersections above 1g/t Au were intersected at shallow depths (1-30m) during the various phases of RAB drilling. RC boreholes checked certain high value gold intersections to a maximum of 180m. The relationship with Anglogold was terminated during 2005.
CAG's intended work programme
CAG intend to thoroughly collate and review all available data for the Kola permit. The key areas of interest include metasedimentary enclaves (biotite schist) preserved in certain structural domains emanating from the regional Banifin deformation zone to the east of the property. CAG, from previous experience working in the Bougouni district and Morila itself, has in-house working models on the Morila style mineralisation, and intends to systematically generate and prioritise targets for diamond drilling during 2008. It is anticipated that the areas of interest will be deeper (200-800m below surface) than previous exploration work has tested.
Terms of the agreement
The Kola Permit Agreement complements CAG's existing business interests in Mali, namely its two joint venture subsidiaries, Songhoi Ressources SA and Mali Goldfields SA, where exploration is ongoing over a package of 20 permits covering over 2,500 sq km in south and west Mali, including the Medinandi prospect (500,000 oz Au resources). Assuming CAG enter into the Kola Permit Agreement, under the terms of the agreement CAG would fund exploration on the properties through its existing subsidiary companies in Mali.
Other exploration
CAG is also conducting exploration in Ghana at the Bibiani mine site (RC and DD programme), Botswana (regional work on the extension of the Archean Kraaipan greenstone belt from South Africa), as well as initiating fieldwork in Zimbabwe proximal to existing mining operations at the Camperdown and Dalny/Venice mines.
* * ENDS * *
For further information please contact or visit www.centralafricangold.com or contact:
Central African Gold Plc
Greg Hunter Tel: +27 (0)82 882 4222
In London:
St Brides Media & Finance Ltd
Hugo de Salis/ Felicity Edwards Tel: +44 (0)20 7242 4477
Strand Partners Limited
Simon Raggett /Braden Saunders Tel: +44 (0)20 7409 3494
In South Africa:
Central African Gold
Nicole Broome Tel: +27 11 676 2500
Mob: +27 83 601 1702
Russell and Associates
Charmane Russell Tel: + 27 11 880 3924
Mob: + 27 82 372 5816
Notes to Editors:
Central African Gold Plc, admitted to AIM in April 2004, was established to acquire gold assets with a geographical focus on Africa. The Company has established a sound portfolio with projects in Ghana, Mali, Zimbabwe and Botswana. It has a highly experienced management team, which has worked together for four years managing six underground greenstone gold mining operations and building exploration portfolios.
CAG's portfolio includes the producing Bibiani gold mine and prospecting licences in Ghana, which it acquired from AngloGold Ashanti Ltd, two joint ventures in Mali covering 23 prospective permits and licences in Botswana covering the extension of the Kraaipan greenstone belt from South Africa. CAG recently acquired five mines and extensive exploration properties in Zimbabwe. The directors are evaluating additional prospects in Africa to establish CAG as a leading mid-tier African gold producer with world class exploration and production assets.
