African Gold Group, Inc. (TSX-V: AGG: OCT: AGGFF) reported today the analytical results for six near surface (oxide), reverse circulation (RC), step-out drill holes, from the Company’s Kobada, Mali gold project. All six holes represent northern step out holes that were collared up to 100 meters north of the Zone 1 deposit including step-out hole KBRC11 coming in at 112 meters of 2.14 g/t gold which ends in mineralization.
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, 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 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%.