Canal+ Regulatory News (CAN)

16 Jan 2007 11:30

Central African Gold PLC16 January 2007 Central African Gold Plc / Ticker: CAN / Index: AIM / Sector: Mining & Exploration 16th January 2006 Central African Gold Plc ("CAG" or "the Company") Starts Drilling Programme at Medinandi Permit, West Mali Central African Gold Plc, the AIM quoted gold mining and exploration company,has commenced a drilling programme at its 154 sq km gold exploration MedinandiPermit in west Mali. The programme will validate and test the Fadougou Main Zoneand Medinandi prospect targets as well as quantify new structural targets in thearea. This first phase of drilling will involve a combination of ReverseCirculation ("RC") percussion and diamond core drilling ("DD"), totalling over15,000m and is expected to be completed by July 2007. The Medinandi Permit is one of three gold exploration permits located in theprospective Kenieba window of lower Proterozoic age Birimian strata in westMali, which constitute the Mani SARL joint venture entered into by CAG in July2006. Under the terms of the agreement CAG will fund exploration on the threeproperties through its 80% owned joint venture company, Songhoi Resources SA. The Medinandi Permit is situated in the southern part of the Kenieba window, 40km south-west of the town Kenieba. Gold was first discovered on the permit in1953 by a French geologist but has remained largely under-explored due to thicklaterite cover despite positive indications from a number of more recentexploration programmes in the late 1990s. The property locates over structuralsplays from the Senegal-Mali shear zone ("SMZ"), which is associated with majorgold deposits in the region such as Sadiola and Loulo/Yalea. The permit alsoincludes similar geological packages and structures as those that host themulti-million ounce Loulo and Yalea deposits 60 km to the north, although it isconspicuous with significantly more evolved intrusive rocks associated with thegold mineralisation. CAG has finalised a geospatial information systems ("GIS") synthesis of thepermit area and has planned a systematic exploration programme to test a numberof "walk-up" drill targets and other surface exploration targets that have beenidentified. The target prioritisation is based on the collation of existinggeological data, enhanced Aster satellite imagery and field structuralinterpretations, coupled with multi-element soil geochemistry. Themineralisation is marked by a combination of silica and carbonate alterationcontrolled by the emplacement of quartz porphyries and other evolved graniticapophyses into structurally favourable sites along a regional structuralcorridor within a mixed metasedimentary package, including grits/sandstones,arenites and quartz-tourmaline sandstones, as at Loulo. Available historic reports and data on the Medinandi permit area have beenreviewed by CAG and its independent consultant, GFC Consult. Previous drillingduring the 1980s and 1990s by Sonarem and AZCO/WAG delineated five zones ofmineralisation northwest of Fadougou Village, which constitute the Fadougou mainzone, with a combined strike in excess of 3,000m. This drilling indicates asignificant geological continuity of mineralisation, and subject to furtherdrill validation by CAG. The mineralised system appears from drill intersectionsto be 1.8m wide in the south (5g/t Au), 2.6m in the centre (4.9g/t Au) and 5.5m(5.2g/t Au) in the northern part of the deposit. Randgold Resources deduced frompast drilling and its geological observations that the mineralisation becomeswider towards the north, an area that deserves further attention. The 2001Randgold Resources annual report states that the northernmost WAG-hole Me23yields >25m at >5g/t Au. CAG's drilling programme in 2007 will focus on: 1) validation and extension of the 3,000m Fadougou Main Zone target; 2) confirmation of strike and geological continuity of the adjacent Medinandi prospect, a 2,000m long robust Au-in-soil geochemical anomaly; and 3) initial shallow heel-toe RC drill testing of certain new structural targets in the area identified from the target prioritisation exercise. The overall drilling programme will involve a combination of RC percussion anddiamond core drilling totalling over 15,000m. CAG also intends planning follow-up exploration on other surface targetsdelineated by previous surface exploration by Randgold Resources conductedbetween 1999 and 2002. These targets are all masked to a certain degree bytransported cover, and will be tested by shallow RC drilling. At Tintiba: Two trenches, 120m apart, channel sampling returned 14m grading 5.44g/t Au and8m grading 5.54g/t Au while pits in the area returned individual valuesin-excess of 2.5g/t Au, with peaks of >30g/t Au. At Bakolobi: A north-south trending mineralised structure was identified over 700m of length.The structure occurs in sheared quartzites and porphyries. Gold grades varybetween 1g/t Au and 4g/t Au over widths from 4m to16m. Exploration of the Medinandi permit poses challenges due to extensivelateritisation of the regolith. Significant potential exists below areas ofextensive laterite duricrust, where known regional structures are concealed.Future exploration phases will be structured to include a provision for highresolution Induced Polarisation surveys and shallow RC drilling due to thehardness and thickness of overburden (3m to 6m). CAG's CEO Greg Hunter said, "CAG's strategy is to become a leading mid-tieroperating gold company, with an initial target of circa 200,000 ounces ofannualised low-cost gold production and 7.5 million ounces of resource by theend of 2008. We recently completed the acquisition of the Bibiani gold mine,which is currently producing approximately 3,500 ounces of gold per month. Thecommencement of drilling at the Medinandi permit in Mali represents a furtherstep in our plan to build a substantial gold resource base. The programme willfocus primarily on validation and extension of the 3,000m strike at the FadougouMain Zone target and the geological continuity of the adjacent 2000m strikeMedinandi prospect >200ppb Au-in-soil geochemical anomaly." * * ENDS * * For further information please contact or visit www.centralafricangold.com orcontact: Greg Hunter Central African Gold Plc Tel: +27 (0)82 882 4222Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0)20 7242 4477Simon Raggett Strand Partners Limited Tel: +44 (0)20 7409 3494 Notes to Editors: Central African Gold Plc, admitted to AIM in April 2004, was established toacquire gold assets with a geographical focus on Africa. The Company hasestablished a sound portfolio with projects in Ghana, Mali and Botswana. It hasa highly experienced management team, which has worked together for four yearsmanaging six underground greenstone gold mining operations and buildingexploration portfolios. CAG's portfolio includes the producing Bibiani gold mine and prospectinglicences in Ghana, which it acquired from AngloGold Ashanti Ltd, two jointventures in Mali covering 23 prospective permits and licences in Botswanacovering the extension of the Kraaipan greenstone belt from South Africa. Thedirectors are evaluating additional prospects in Africa to establish CAG as aleading mid-tier African gold producer with world class exploration andproduction assets. This information is provided by RNS The company news service from the London Stock Exchange