Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining

Central African Gold Plc (“CAG” or the “Company”)

CAG reports circa fourfold increase in underground Ore Reserve estimates to 1.05 million oz Au at its Bibiani gold mine in Ghana

Central African Gold Plc, the AIM traded gold mining and exploration company, is pleased to announce an increased ore reserve estimate following revised mineral resource estimation, mine planning and scheduling at its Bibiani gold mine, Ghana.

Highlights:                             

• Bibiani Main Zone underground Ore Reserve estimate increases to 9.18 million tonnes (“Mt”) at 3.57 g/t Au for 1.05 million oz Au at a cut off grade of 2.00 g/t Au (JORC compliant)
• The Ore Reserves have been estimated from within Measured and Indicated Mineral Resources totalling 13.32Mt at 3.66 g/t Au for 1.57 million oz Au at a cut-off grade of 2.00 g/t Au (JORC compliant), as compared to the Company’s resources update in July 2007 which cited Measured and Indicated Resource totalling 14.49Mt at 3.38g/t Au for 1.56 million oz Au at a cut off of 2.00g/t Au, (JORC compliant)
• The Ore Reserve upgrade represents a circa 391% increase on those stated in the Company’s last reserves update in February 2007 (214 koz Au)
• Two hydraulic underground drilling rigs have been commissioned, and have commenced stope delineation and cover drilling

Greg Hunter, CEO of CAG, commented, “This circa fourfold increase in our underground Ore Reserves estimate for the Bibiani orebody marks a significant step in CAG’s economic development of the Bibiani gold mine and continued delivery of its strategy to its shareholders. The increase in Ore Reserves is a direct result of continued geological assessment, refined Mineral Resource estimation procedures, as well as the optimisation of mine planning and scheduling of the orebody. We are well advanced with the deployment of the trackless mining method with all of our critical mining development equipment now on site and operating. Modification of existing infrastructure and underground development has now commenced.

“The Ore Reserve estimate further underpins our confidence in the potential for the development of a +10 year viable underground mining operation. In fact, we have initiated a feasibility study to assess extracting these reserves at a higher rate than our initially planned 100,000 tonnes per month (“tpm”). The engineering design specifications for the conveyor system in the conveyor decline are for 200,000 tpm and the process plant is capable of treating 225,000 tpm. With growing confidence in the sustainability of the orebody, there is a real opportunity to increase our annualised ounce production to over 150,000 oz per year.

“Bibiani has continued to fulfil its potential in providing us with a multi-million ounce gold resource with global underground resources now standing at just under 3 million oz. Our strategy of becoming a leading mid-tier African gold producer with world class exploration and production assets is, I believe, already becoming a reality.”

Background:

The Bibiani gold mine has historically produced approximately 4 million oz Au from a combination of high-grade underground (1902-1967) and opencast (1997-2005) mining. The historic underground mining exploited various narrow (1-5m) zones of mineralisation via three vertical shafts, and using a cut-off grade of 7 g/t Au extracted approximately 2 million oz Au at an average recovered grade of 9 g/t Au.  The more recent opencast operation mined the broader mineralised “halo” (widths up to 100m, but generally 15-25m) at an average recovered grade of 3.5 g/t Au.  Approximately 1.7 million oz Au were recovered from the Bibiani main pit with a number of smaller satellite pits and a tailings re-treatment operation further contributing to a total of 2 million oz Au from more recent operations.

CAG is currently developing a mechanised long-hole open stoping operation below the main Bibiani open pit, initially through the extension of an existing decline to 9 level (approximately 270 metres below surface). During Q3 2008, CAG intends to commission a 2.8km decline from the run of mine (“ROM”) pad which will allow for both the conveyance of ore as well as access for man and materials. The conveyor decline will have a design capacity of 200,000 tpm. CAG has contracted a small select team of experienced Australian and South African mining and engineering personnel to spearhead the initial development phase of the mine. The bulk of the mining equipment is already commissioned underground, with delivery of the balance due shortly. Initial underground development has commenced, with old stope cleanup in progress, whilst initial stoping is anticipated at the end of November 2007.

The Bibiani process plant (Lycopodium 1997) has a capacity of 225,000 tpm. Underground production is phased to achieve 100,000 tpm during Q3 2008. The favourable geology and drilling results are providing impetus to assess expanding planned output to over 150,000 tpm.

Revised Ore Reserve estimation

Snowden Mining Consultants (Pty) Ltd. (“Snowdens”) has been retained by CAG in an advisory capacity for the mineral resource estimation procedures. Ukwazi Mining Consultants (Pty) Ltd(“Ukwazi”) has been retained to complete the first phase of mine planning, stope design and scheduling at Bibiani. The current Ore Reserve statement, which has been undertaken by CAG, is JORC compliant, and signed off by CAG’s Competent Person, Mr Phil Bentley. This estimate follows on from previous Ore Reserve estimates (September 22, 2006 and February 26, 2007) where the underground Ore Reserves at Bibiani were undertaken by Snowdens/Ukwazi /CAG using Surpac and Datamine software. A fully audited statement of the current estimate will be finalised by 31 December 2007.

The Ore Reserves are stated at a gold price of US$ 600/oz, and an operational paylimit of 2 g/t Au. Stopes have been designed based on a 2 g/t Au cutoff.

Underground Ore Reserves

The Ore Reserve estimate is based on a continued refinement of first principle geological modelling and mineral resource estimation on the main Bibiani ore body, coupled with detailed mine planning and scheduling. The mineral resource estimation within the stope outlines has been refined to 7.5m x 7.5m x 3m blocks within five geological domains (as compared to the July 2007 mineral resource estimate that used 15m x 15m x 5m blocks). The smaller block size has provided a more accurate tonnage and grade estimate. Modelling of the geological zones was achieved by sectional digitising of geological units and alteration zones, especially silicification, brecciation and sulphidation.  Gold grades for the reported underground resource model have been determined using Ordinary Kriging with grades interpolated into the parent blocks. The gold content estimation was constrained within a stope outline wireframe at a 2g/t Au cut-off. Modifying factors applicable to the long-hole open stoping mining method have been developed by Ukwazi, and have been applied to converting stope outlined resources to Ore Reserves.

The extractable Proven and Probable Ore Reserve estimates within each stope have been generated by modifying the relevant in-stope Mineral Resources. These were classified according to the distribution of sampling in the Ordinary Kriging neighbourhood, utilising a combination of the normalised variance, sample density and spatial continuity (>92.5% confidence Measured, 70-92.5% confidence Indicated, <70% confidence Inferred). The bulk long-hole open stoping mining method also has an impact on certain <2g/t Au blocks being caught up in the mining as internal dilution. This classification scheme takes into account the uncertainty in the estimates related to the proximity and distribution of the informing composites.

Draw point levels are planned on 9 level (270m below surface), 11 level (330m) and 13 level (390m) from which ore will be delivered via ore passes to an underground crushing station on 14 level (420m). The revised estimation method is constrained to 13 level and above, reflecting the current extent of mine planning and scheduled extraction of ore. Proven Reserves are restricted to 9 level and above, where current infrastructure is in place. Below 9 level to 13 level, all Measured mineral resources are modified to Probable Ore Reserves. 

The conversion to Ore Reserves was undertaken by outlining stope blocks from the Mineral Resource model. Each stope was fully diluted, comprising internal dilution (1.5-2.0 g/t Au in the Measured and Indicated Resource blocks), and a provision for overbreak at 10% tonnage at a grade of 0.82 g/t Au (the average 0-1.5g/t in stope block grade). The diluted stope was further modified for mining losses (5%) and a Mine Call Factor of 95% (applied as gold loss from stope to ROM pad). Stope blocks with an average grade less than 3g/t were excluded from the Reserve and were left in Resource classification at this stage.

Ore Reserve tonnage and grade estimates have been made both with and without modifications for pillars. Pillar modification is a 14% reduction in tonnage, and 28% reduction for a crown pillar on 6 level and 7 level under the existing openpit. An extraction of 70% of pillars has been factored during life of mine operations.

The underground Ore Reserves estimate of 1.05 million oz Au represents a circa 391% increase on those stated in February 2007 (214 koz Au), and include modifying factors such as ore loss and dilution factors in quantifying ore reserves.

The Ore Reserve estimates were undertaken internally by CAG. Dale Richards, Frans Dooge and Phil Bentley (all SACNASP affiliated) have reviewed the information contained in this announcement. They have more than 70 years combined experience in the geological modelling of orebodies and the use of geostatistics for the estimation of recoverable resources in gold deposits. For the purpose of reporting under the JORC code, pursuant to the AIM rules, Phil Bentley, CAG Manager: Geology and Exploration, is regarded as the Company’s Competent Person.

* * ENDS * *

For further information please visit www.centralafricangold.com or contact:

Central African Gold Plc

Greg Hunter/Nicole Broome                                                     Tel:       +27 (0) 11 676 2500

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

RBC Capital Markets

Martin Eales/ Andrew Smith                                                     Tel:       +44 (0) 20 7029 7881

In South Africa:

Russell and Associates

Charmane Russell                                                                     Tel:       + 27 (0) 11 880 3924

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 Limited, three joint ventures in Mali covering 22 prospective permits and a licence 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 management team is evaluating additional prospects in Africa to establish CAG as a leading mid-tier African gold producer with world class exploration and production assets.

Isabel Crossley

St Brides Media & Finance Ltd

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Email: isabel@sbmf.co.uk