African Gold Group Inc.

Published : July 13th, 2011

July 13/11

( 0 vote, 0/5 ) Print article
  Article Comments Comment this article Rating Follow Company  
0
Send
0
comment
Keywords :   Canada | Ghana | Gold | Mali | Market | Recovery |
African Gold Group

 African Gold Group, Inc. Positive Preliminary Economic Assessment Generates $216.9 Million NPV And 90% IRR

1,000,000 Oz Au THRESHOLD SURPASSED FROM 15% OF STRIKE AT KOBADA, MALI

TORONTO, CANADA, July 13, 2011 � African Gold Group, Inc., (�AGG� or the "Company�) is pleased to announce the results of a positive NI 43-101 compliant 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 consulting group Bumigeme Inc., located in Montreal, Quebec, was commissioned by AGG to complete the study.

The Study incorporates and includes drill data up to the end of December, 2010. There is no drill data from the 2011 campaign included in the Study. More specifically, the Study does not incorporate drill data for the northern extension holes that extend Zone 1 up to 2 kilometers north of the Zone 1 deposit, it does not incorporate the 2011 southern holes or the newly discovered Foroko North deposit, nor the newly discovered Termite Zone, the latter two are 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 of ore 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. During years 4 and 5 of operations the CAPEX will be increased by US$2.9 million for the addition of a ball mill that will be required to process the sulphide resource. The average operating cost at year 6 will increase to US$8.73/t of ore. Gold recovery and production in year 6 is projected to be 80.80% and 112,200 ozs Au, respectively.

Key highlights from the Study are as follows:

  • 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 ore tonnage and recoverable gold but with an associated decrease in the average gold grade.
  • AGG Director and Qualified Persons, Mr. Pierre Lalande, P.Geo., has recommended that 100% of all material excavated between the hanging wall and footwall of the mineralized zone be processed in the gravimetric plant as lateritic deposits containing coarse free gold result in a strong �nugget effect�. It is this characteristic, due to weathering, that makes Kobada amenable to utilizing gravity for gold recovery. Mr. Lalande contends that the increase in sampling density of drilling during grade control of mined deposits in West Africa often turns much �in ore waste� of feasibility study estimates into incremental ore.
  • The geological and in-pit resources that are detailed in this study are only projected to a vertical depth of 160 meters versus the projected depth of 260 meters in AGG�s 43-101 compliant Initial Resources Estimate that was published in May of 2008. This amendment reflects AGG�s primary focus on the oxidized horizon of the deposit. Therefore, most of the volume of the sulphide resource that was included in the May, 2008 Initial Resources Estimate is not included in this Study.

    Base Case Economics � US$1,100 oz Au, 5% Discount Rate

    Equity             IPR                 Pay Back Period Net Present Value $(M)
    50% 90.6 14 months $216.9

     

    Summary of Capital Costs (CAPEX)

    Description C$
    Mining 34,404,000
    Concentrators 30,554,760
    Infrastructures & Services 29,016,650
    Personnel Accommodations 2,100,000
    Subtotal 96,075,410
       
    EPCM (12.5%) 12,009,426
    Miscellaneous (15%) 14,411,312
    Subtotal 26,420,738
       
    Total CAPEX 122,496,148

     


     

     

     

    Summary of Operating Costs (OPEX)

    Description C$
    Mining 15,122,267
    Concentrators 31,411,184
    Administration & Services 2,591,319
    Personnel Accommodations 1,236,000
    Subtotal 50,360,770
       
    Miscellaneous (15%) 7,554,116
       
    Total OPEX 57,914,886
       
    Operating Cost/t 8.27

     

     

     

     

     

     

    IRR vs Operating Cost Variation

    The projects sensitivity to variation in cost components is demonstrated as follows:

    Operation Cost
    Variation (%)
    Pay Back
    Period (months)
    Net Present
    Value (M)
    IRR
    (%)
    IRR Variation
    (%)
    -25 11 $286.7 114.9 +26.8
    -15 12 $258.8 105.2 +16.1
    Base 14 $216.9 90.6 ---
    +15 16 $175.0 75.7 -16.4
    +25 18 $147.1 65.6 -27.6

     

    IRR vs Gold Price Sensitivity

    The project is sensitive to changes in the market prices for gold as demonstrated in the following sensitivity analysis. US$1,100/oz Au represents the Base Case of the Study:

    Gold Price
    Variation ($US)
    Pay Back
    Period (months)
    Net Present
    Value (M)
    IRR %
    $900 23 $103.2 48.8
    $1,000 17 $160.1 70.1
    $1,100 14 $216.9 90.6
    $1,200 11 $273.7 110.7
    $1,450 8 $415.8 160.1

     

     

    Overall Pit Inventory, After Dilution (Metric Tonnes and Average Grade)

    Based on the mineralization geometry, the geology and the size of mining equipment, it is anticipated that there will be approximately 5% dilution. The grade of the diluting material is estimated at 0.1 g/t.

    Ore tonnage before dilution (kt) 39,763
    Grade before dilution (g/t) 0.67
    Waste tonnage before dilution (kt) 71,195
    Stripping ratio before dilution 1.79
    Dilution 5%
    Diluting tonnage coming from waste (kt) 1,988
    Diluting grade (g/t)
    Ore tonnage after dilution (kt) 41,751
    Average grade after dilution (g/t) 0.64
    Waste tonnage after dilution (kt) 69,207
    Stripping ratio after dilution 1.66

     

     

     

     

     

     

    Rate of Production

    The mine production rate was estimated from general experience and from general reference books.

    Ore (t) 41,750,896
    Waste (t) 69,206,672
    Total (t) 110,957,568
    Expected Mine Life (years) 6
    Expected Daily Production (Ore) (t) 20,000
    Stripping Ratio 1.66
    Expected Daily Production (Waste) (t) 33,152
    Expected Daily Production (Ore & Waste) (t) 53,152

     

     

     

    Geological Resources Estimate From Surface To 160 Meters Vertical Depth

    The resources estimate reported in this Study are calculated from surface to a vertical depth of 160 m as compared to AGG�s 2008 initial resources estimate that was calculated to a vertical depth of 260 m. As previously stated, this amendment reflects AGG�s primary focus on the oxidized horizon of the deposit. Therefore, most of the volume of the sulphide resource that was included in the May, 2008 Initial Resources Estimate is not included in this Study.

    The horizontal polygon block method was used for this Study and a total of eight (8) horizontal plans were generated from drill data with polygon vertical influence set to a distance of 20 m between plans. The grade of 0.1 g/t Au is used to define the mineralized envelope of the deposit. The specific gravity used is 1.9 g/m�, which represents a 30/70 compromise between quartz at 2.5 (used by WGM) and saprolite at 1.6 (AGG internal test report from trenches). The geological interpretation was projected to the bottom plan. This means that the average block size and grade for the 380 level represents the block from 380 m to 400 m. The same will apply for the pit design.

    Levels Cut (g/t) Tonnage Grade (g/t) Ounces  (Au) Categories
    240-400 0.1 72,211,336 0.48 1,093,000 Resources
    240-400 0.3 36,133,759 0.77 893,000 Resources
    240-400 0.5 19,167,747 1.12 689,000 Resources

     

     

     

     

     


    Pit Parameters

    The parameters of the proposed pit are dictated mainly by the wall geometry and the production rate. The wall geometry depends on the geotechnical behaviour of the rock. A geotechnical study will be undertaken as part of a Feasibility Study, which is currently underway. The assumptions used in this report are based on the geology. The planned pit will have a depth of 160 m, in a saprolitic formation which does not require blasting. Weathering can affect the wall angles.

    From the available information, it is suggested, prior to the results of a geotechnical study, to consider the following configuration:

    • bench height: 10 m
    • ramp width: 18 m
    • ramp grade: 10%
    • berm width: 5 m
    • berm frequency: every 20 m;
    • minimum working space required: 50 m;
    • bench face angle: 71 degrees .
    • Overall pit angle: Overall pit angle taking into account berms and one ramp access is approximately 36 degrees.

      �The economics associated with our Kobada gold project are outstanding. I have in excess of 30 years of working experience in West Africa and have participated in the development of numerous lateritic deposits, of which seven (7) are now in production. My experience has taught me that increasing: 1/ sampling density; 2/ sample support or weight; 3/ aliquot or the amount of material actually analyzed, are strongly beneficial to increasing in situ gold content. The historical records indicate that Kobada was originally analyzed using 15 g to 30 g fire assay (FA) for gold content analysis. AGG acquired Kobada in 2006 and commenced its sample analysis program using 50 g fire assay (FA50). AGG submitted a total of 4,280 samples to dual analysis in the 2006 and 2007 core drilling program. Screen fire assay (SFA) of 1,000 g aliquot reported 11% higher gold content when compared to the same sample analyzed using FA50. In 2009, I managed a RC drill program that was fully funded by an arm�s length company. This company was sufficiently intrigued to investigate my hypothesis that Kobada gold could be recovered using a gravimetric recovery plant alone. RC drilling generated a larger sample support and aliquot versus historical core and rotary air blast drilling. I recommended analyzing using a significantly larger 2,000 g aliquot by Leachwell analysis versus  the historical 15 g, 30 g and 50 g FA and 1,000 g SFA. My RC drill program using Leachwell analysis increased the gold grade by 31%. As part of the overall program, I recommended metallurgical testing be conducted on a 287 kg RC cutting composite made up from 127 samples derived from 8 distinct RC drill holes. The metallurgical tests included desliming, followed by both gravity and, separately, cyanidation of the deslimed portion. The deslimed portion had a gravity recoverable gold grade of 4.28 g/t Au from a 10 kg aliquot while duplicate 50 g FA aliquots of the same portion gave 1.07 g/t Au. Based on my experience, I state with confidence that Kobada will become a producing mine in the near future and I predict it will be a highly profitable, low cost, gravimetric operation,� states AGG Director, Pierre Lalande, P.Geo.

      Qualified Person

      The Preliminary Economic Assessment was prepared by Bumigeme Inc. under the supervision of Florent Baril, P. Eng. who is a "qualified person" under the standards set forth in NI 43-101. Mr. Pierre Lalande, P.Geo, AGG Director is the Company�s designated Qualified Persons for the purposes of the Study. All parties have reviewed and approved their respective content of this press release.

      Publication of the Study

      The Study was originally prepared in French and is currently being translated into English. AGG intends to make the Study available on SEDAR upon receipt of the final English version.

      African Gold Group, Inc., based in Toronto, Canada, is engaged in the identification, acquisition and exploration of prospective gold projects that are situated along significant gold trends within West Africa. To date, the Company controls a total of eleven gold concessions that are consolidated in four distinct stand alone exploration projects. Three of these projects are located in Ghana and one project (Kobada) is  located in Mali, West Africa.

      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

       

      FOR FURTHER INFORMATION PLEASE CONTACT:

      African Gold Group, Inc.

      Michael A. J. Nikiforuk

      (416) 644-8892 ext 101

      info@africangoldgroup.com

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

       

      Communication Design by Independent Development Inc.



      Powered by Joobi
      Data and Statistics for these countries : Canada | Ghana | Mali | All
      Gold and Silver Prices for these countries : Canada | Ghana | Mali | All

      African Gold Group Inc.

      EXPLORATION STAGE
      CODE : AGG.V
      ISIN : CA00829A1066
      Follow and Invest
      Add to watch list Add to your portfolio Add or edit a note
      Add Alert Add to Watchlists Add to Portfolio Add Note
      ProfileMarket
      Indicators
      VALUE :
      Projects & res.
      Press
      releases
      Annual
      report
      RISK :
      Asset profile
      Contact Cpy

      African Gold Group is a gold exploration company based in Canada.

      African Gold Group holds various exploration projects in Ghana.

      Its main exploration properties are BAGOE - EAST, BAGOE - WEST and KOBADA in Mali and NYANKUMASI, MANKRANHO and ASANKRANGWA in Ghana.

      African Gold Group is listed in Canada and in United States of America. Its market capitalisation is CA$ 48.9 millions as of today (US$ 39.1 millions, € 34.3 millions).

      Its stock quote reached its highest recent level on April 02, 2004 at CA$ 3.40, and its lowest recent point on April 12, 2019 at CA$ 0.01.

      African Gold Group has 326 100 000 shares outstanding.

      Your feedback is appreciated, please leave a comment or rate this article.
      Rate : Average note :0 (0 vote) View Top rated
       
      Financings of African Gold Group Inc.
      3/18/2015Announces Closing of Private Placement
      3/11/2015Announces Private Placement
      9/5/2013Announces the Closing of $1,500,000 Private Placement Offeri...
      3/20/2006private placement of up to 4 million shares
      Option Grants of African Gold Group Inc.
      4/5/2011, Engages Torrey Hills Capital for Investor Relations
      Project news of African Gold Group Inc.
      8/23/2013(Kobada)Clarifies Disclosure on Kobada, Mali Gold Project Press Rele...
      5/3/2010(Asankrangwa)Airborne Survey Of Asankrangwa Holdings -- Contiguous And O...
      4/8/2010(Asankrangwa)To Commence Airborne Survey Of Asankrangwa Holdings -- Conti...
      2/18/2010(Kobada)Drilling At Kobada, Mali Focused On Surpassing 1,000,000 Oz ...
      1/20/2010(Kobada)Multi-Phase Work Program Focused on Surpassing 1,000,000 oz ...
      3/24/2010(Kobada)Intersects 18 Meters of 7.04 G/T Au In Zone 1 and 21 Meters ...
      10/28/2009(Mankranho)Newmont Confirms Structures That Host Yamfo North-East & Sub...
      9/23/2009(Kobada)Kobada "Zone 1" Resources Estimate Will Increase
      5/21/2008(Kobada)Files Initial 43-101 Mineral Resources Estimate For "Zone 1"...
      4/9/2008(Kobada)Intercepts 9 Meters Of 25.8 G Au/T
      Mineralization Identi...
      4/2/2008Releases Initial 43-101 Mineral Resources Estimate for "Zone...
      3/18/2008(Kobada)Diamond Drilling Set To Test Multiple Structures Parallel To...
      3/6/2008(Bagoe - East)Randgold Resources Reports Rab Drilling Is Underway At Bagoe...
      Corporate news of African Gold Group Inc.
      1/6/2016African Gold Group, Inc. Announces Sale of Ghanian Assets fo...
      10/28/2015African Gold Group, Inc. Announces Metalurgical Test Work Co...
      9/3/2015African Gold Group Announces Closing of Private Placement
      8/5/2015African Gold Group, Inc. Announces Grant of Kobada Mining Li...
      7/8/2015African Gold Group, Inc. Announces Election of Mr. Georges C...
      2/6/2015African Gold Group to Participate in "Doing Business in Mali...
      1/22/2015African Gold Group Closes Second Non-Brokered Private Placem...
      1/14/2015African Gold Group Closes Non-Brokered Private Placement for...
      12/23/2014African Gold Group, Inc. Announces Filing of Preliminary Eco...
      11/25/2014African Gold Group, Inc.: Updated Preliminary Economic Asses...
      10/29/2014Kobada Metallurgy Test Work Confirms 85.2% Gold Recovery for...
      10/28/2014African Gold Group Unaware of Any Material Change
      9/4/2014AGG Appoints David Brown as Company Chairman
      7/29/2014African Gold Group Updates on Kobada Feasibility Study
      7/23/2014African Gold Group Inc. Completes 2014 Kobada Field Season-B...
      7/17/2014African Gold Group, Inc., Appoints Misha Collins Feasibility...
      7/9/2014African Gold Group, Inc., Kobada Feasibility Study Work to M...
      6/19/2014African Gold Group, Inc.: Bulk Sampling Results Identifies S...
      5/22/2014African Gold Group Closes Over-Subscribed Non-Brokered Priva...
      4/29/2014African Gold Group Strengthens Mine Development Team With th...
      3/25/2014African Gold Group, Inc. Announces Early Warrant Exercise In...
      10/22/2013(Kobada), Engineering Team Mobilizes to Commence Metallurgical Test ...
      7/8/2013Annual and Special Shareholder Meeting
      6/20/2013letter Press Release June 18 2013
      6/18/2013(Kobada)Updated Resources Estimate for Kobada Gold Project Surges to...
      5/29/2013KBRC12-160 Intercepts 75 Meters of 3.06 g/t Au; KBRC12-201 I...
      5/29/2013KBRC12-160 Intercepts 75 Meters of 3.06 g/t Au; KBRC12-201 I...
      5/15/2013KBRC12-084 Intercepts 69 Meters of 2.37 g/t Au; KBRC12-066 I...
      5/8/2013Feasibility Study Drilling on 25 Meter Centers Pushes Au Min...
      3/25/2013IGE Resources calls for Extra General Meeting, related to th...
      2/5/2013(Mankranho)Completes Sale of Mankranho, Ghana Concession for US$4,000,0...
      11/5/2012Pope & Company Initiates Equity Research Coverage on African...
      10/10/2012(Mankranho)Announces Sale of Mankranho, Ghana Concession for US$4,000,0...
      5/1/2012May 01/2012
      3/29/2012March 29/2012
      3/20/2012March 20/2012
      11/29/2011Nov 30/11
      10/26/2011Featured In The Financial Post,
      10/25/2011Oct 25/11
      9/14/2011Sept 14/11
      8/25/2011Featured In The Financial Post, Mining News
      7/13/2011July 13/11
      7/13/2011Positive Preliminary Economic Assessment Generates $216.9 Mi...
      6/1/2011June 01/11
      6/1/2011Southern Step Out Hole Intercepts 96 Meters of 1.35 g/t Au f...
      4/5/2011April 05/11
      3/29/2011March 29/11
      3/22/2011March 22/ 11
      3/22/201167 RC Drill Holes Shipped to Lab; 3,980 m of Trench Results ...
      3/16/2011Re-Adopts Shareholder Rights Plan
      4/29/2008 included in The Gold Newsletter, April 2008 Edition
      4/16/2008Trenching Returns 84 Meters Of 3.0 G Au/T, Including 36 Mete...
      2/25/2008 Retains AGORACOM To Provide Google Search Engine IR Program...
      Comments closed
       
      Latest comment posted for this article
      Be the first to comment
      Add your comment
      TSX-V (AGG.V)OTHER OTC (AGGFF)
      0.150+0.00%0.124-11.43%
      TSX-V
      CA$ 0.150
      08/03 10:30 -
      0%
      Prev close Open
      0.150 0.150
      Low High
      0.145 0.150
      Year l/h YTD var.
      0.085 -  0.195 11.11%
      52 week l/h 52 week var.
      0.085 -  0.195 30.43%
      Volume 1 month var.
      76,091 -23.08%
      24hGold TrendPower© : 20
      Produces
      Develops
      Explores for Gold
       
       
       
      Analyse
      Interactive chart Add to compare
      Interactive
      chart
      Print Compare Export
      Last updated on : 3/25/2010
      You must be logged in to use the porfolio and watchlists (free)
      Top Newsreleases
      MOST READ
      Annual variation
      DateVariationHighLow
      2022-14.29%
      20210.00%0.200.11
      2020-40.68%0.380.10
      20191375.00%0.590.01
      2018-55.56%0.060.02
       
      5 years chart
       
      3 months chart
       
      3 months volume chart
       
       
      Mining Company News
      Plymouth Minerals LTDPLH.AX
      Plymouth Minerals Intersects Further High Grade Potash in Drilling at Banio Potash Project - Plannin
      AU$ 0.12-8.00%Trend Power :
      Santos(Ngas-Oil)STO.AX
      announces expected non-cash impairment
      AU$ 7.47+5.66%Trend Power :
      Oceana Gold(Au)OGC.AX
      RELEASES NEW TECHNICAL REPORT FOR THE HAILE GOLD MINE
      AU$ 2.31+1.32%Trend Power :
      Western Areas NL(Au-Ni-Pl)WSA.AX
      Advance Notice - Full Year Results Conference Call
      AU$ 3.86+0.00%Trend Power :
      Canadian Zinc(Ag-Au-Cu)CZN.TO
      Reports Financial Results for Q2 and Provides Project Updates
      CA$ 0.12+4.55%Trend Power :
      Stornoway Diamond(Gems-Au-Ur)SWY.TO
      Second Quarter Results
      CA$ 0.02+100.00%Trend Power :
      McEwen Mining(Cu-Le-Zn)MUX
      TO ACQUIRE BLACK FOX FROM PRIMERO=C2=A0
      US$ 3.10-2.52%Trend Power :
      Rentech(Coal-Ngas)RTK
      Rentech Announces Results for Second Quarter 2017
      US$ 0.20-12.28%Trend Power :
      KEFIKEFI.L
      Reduced Funding Requirement
      GBX 0.58-1.03%Trend Power :
      Lupaka Gold Corp.LPK.V
      Lupaka Gold Receives First Tranche Under Amended Invicta Financing Agreement
      CA$ 0.14-6.90%Trend Power :
      Imperial(Ag-Au-Cu)III.TO
      Closes Bridge Loan Financing
      CA$ 2.65-1.85%Trend Power :
      Guyana Goldfields(Cu-Zn-Pa)GUY.TO
      Reports Second Quarter 2017 Results and Maintains Production Guidance
      CA$ 1.84+0.00%Trend Power :
      Lundin Mining(Ag-Au-Cu)LUN.TO
      d Share Capital and Voting Rights for Lundin Mining
      CA$ 7.09+0.42%Trend Power :
      Canarc Res.(Au)CCM.TO
      Canarc Reports High Grade Gold in Surface Rock Samples at Fondaway Canyon, Nevada
      CA$ 0.24-3.92%Trend Power :
      Havilah(Cu-Le-Zn)HAV.AX
      Q A April 2017 Quarterly Report
      AU$ 0.36-1.37%Trend Power :
      Uranium Res.(Ur)URRE
      Commences Lithium Exploration Drilling at the Columbus Basin Project
      US$ 6.80-2.86%Trend Power :
      Platinum Group Metals(Au-Cu-Gems)PTM.TO
      Platinum Group Metals Ltd. Operational and Strategic Process ...
      CA$ 1.91+2.69%Trend Power :
      Devon Energy(Ngas-Oil)DVN
      Announces $340 Million of Non-Core Asset Sales
      US$ 67.92+5.89%Trend Power :
      Precision Drilling(Oil)PD-UN.TO
      Announces 2017Second Quarter Financial Results
      CA$ 8.66-0.35%Trend Power :
      Terramin(Ag-Au-Cu)TZN.AX
      2nd Quarter Report
      AU$ 0.04+6.06%Trend Power :