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.
TOTAL UNDERGROUND ORE RESERVES
|
|
|
|
2 g/t cutoff, stopes fully diluted
without modification for pillars
|
|
Proven
|
kt
|
Au g/t
|
Au koz
|
Ug - Bibiani
|
3 301
|
3.52
|
374
|
Subtotal
|
3 301
|
3.52
|
374
|
Probable
|
|
|
|
Ug - Bibiani
|
5 881
|
3.60
|
681
|
Subtotal
|
5 881
|
3.60
|
681
|
TOTAL RESERVES
|
9 183
|
3.57
|
1 055
|
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
38 Bow Lane
London EC4M 9AY
Tel:
020 7242 4477
Fax:
020 7242 4488
Mobile: 07968 782 695
Email:
isabel@sbmf.co.uk
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