Canal+ Regulatory News (CAN)

26 Sep 2007 17:41

Central African Gold PLC26 September 2007 Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining 26th September 2007 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, ispleased to announce an increased ore reserve estimate following revised mineralresource 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 ourunderground Ore Reserves estimate for the Bibiani orebody marks a significantstep in CAG's economic development of the Bibiani gold mine and continueddelivery of its strategy to its shareholders. The increase in Ore Reserves is adirect result of continued geological assessment, refined Mineral Resourceestimation procedures, as well as the optimisation of mine planning andscheduling of the orebody. We are well advanced with the deployment of thetrackless mining method with all of our critical mining development equipmentnow on site and operating. Modification of existing infrastructure andunderground development has now commenced. "The Ore Reserve estimate further underpins our confidence in the potential forthe development of a +10 year viable underground mining operation. In fact, wehave initiated a feasibility study to assess extracting these reserves at ahigher rate than our initially planned 100,000 tonnes per month ("tpm"). Theengineering design specifications for the conveyor system in the conveyordecline are for 200,000 tpm and the process plant is capable of treating 225,000tpm. With growing confidence in the sustainability of the orebody, there is areal opportunity to increase our annualised ounce production to over 150,000 ozper year. "Bibiani has continued to fulfil its potential in providing us with amulti-million ounce gold resource with global underground resources now standingat just under 3 million oz. Our strategy of becoming a leading mid-tier Africangold 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 Aufrom 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-offgrade of 7 g/t Au extracted approximately 2 million oz Au at an averagerecovered grade of 9 g/t Au. The more recent opencast operation mined thebroader mineralised "halo" (widths up to 100m, but generally 15-25m) at anaverage recovered grade of 3.5 g/t Au. Approximately 1.7 million oz Au wererecovered from the Bibiani main pit with a number of smaller satellite pits anda tailings re-treatment operation further contributing to a total of 2 millionoz Au from more recent operations. CAG is currently developing a mechanised long-hole open stoping operation belowthe main Bibiani open pit, initially through the extension of an existingdecline to 9 level (approximately 270 metres below surface). During Q3 2008, CAGintends to commission a 2.8km decline from the run of mine ("ROM") pad whichwill allow for both the conveyance of ore as well as access for man andmaterials. The conveyor decline will have a design capacity of 200,000 tpm. CAGhas contracted a small select team of experienced Australian and South Africanmining and engineering personnel to spearhead the initial development phase ofthe mine. The bulk of the mining equipment is already commissioned underground,with delivery of the balance due shortly. Initial underground development hascommenced, with old stope cleanup in progress, whilst initial stoping isanticipated 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. Thefavourable geology and drilling results are providing impetus to assessexpanding planned output to over 150,000 tpm. Revised Ore Reserve estimation Snowden Mining Consultants (Pty) Ltd. ("Snowdens") has been retained by CAG inan advisory capacity for the mineral resource estimation procedures. UkwaziMining Consultants (Pty) Ltd ("Ukwazi") has been retained to complete the firstphase of mine planning, stope design and scheduling at Bibiani. The current OreReserve statement, which has been undertaken by CAG, is JORC compliant, andsigned off by CAG's Competent Person, Mr Phil Bentley. This estimate follows onfrom 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 thecurrent estimate will be finalised by 31 December 2007. The Ore Reserves are stated at a gold price of US$ 600/oz, and an operationalpaylimit 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 principlegeological modelling and mineral resource estimation on the main Bibiani orebody, coupled with detailed mine planning and scheduling. The mineral resourceestimation within the stope outlines has been refined to 7.5m x 7.5m x 3m blockswithin five geological domains (as compared to the July 2007 mineral resourceestimate that used 15m x 15m x 5m blocks). The smaller block size has provided amore accurate tonnage and grade estimate. Modelling of the geological zones wasachieved by sectional digitising of geological units and alteration zones,especially silicification, brecciation and sulphidation. Gold grades for thereported underground resource model have been determined using Ordinary Krigingwith grades interpolated into the parent blocks. The gold content estimation wasconstrained within a stope outline wireframe at a 2g/t Au cut-off. Modifyingfactors applicable to the long-hole open stoping mining method have beendeveloped by Ukwazi, and have been applied to converting stope outlinedresources to Ore Reserves. The extractable Proven and Probable Ore Reserve estimates within each stope havebeen generated by modifying the relevant in-stope Mineral Resources. These wereclassified according to the distribution of sampling in the Ordinary Krigingneighbourhood, utilising a combination of the normalised variance, sampledensity and spatial continuity (>92.5% confidence Measured, 70-92.5% confidenceIndicated,