Canal+ Regulatory News (CAN)

26 Jul 2006 14:44

Central African Gold PLC26 July 2006 Central African Gold Plc / Ticker: CAN / Index: AIM / Sector: Mining & Exploration 26 July 2006 Central African Gold Plc ("CAG" or "the Company") Joint Venture to Explore Prospective Medinandi Permit in Western Mali Central African Gold Plc, the AIM listed gold mining and exploration company,has entered into a Joint Venture with the Malian exploration company Mani SARL('Mani') to explore three gold exploration permits in the prospective Keniebadistrict in western Mali. CAG will fund exploration on the properties through aJoint Venture company, of which CAG will hold an 80% equity interest and Mani20%. The initial programme will focus on the 154km(2) Medinandi permit whichoverlays structural splays from the Senegal-Mali shear zone ('SMZ'), a formationassociated with multi-million ounce gold deposits such as Sadiola and Loulo/Yalea. CAG has initiated the collation of existing geological data and has planned asystematic exploration programme for the property. Enhanced Aster satelliteimagery and structural interpretations, coupled with multi-element soilgeochemistry and geospatial information systems ('GIS') syntheses, provides thebasis for target prioritisation. A number of "walk-up" drill targets havealready been identified, including validation of previous drilling and inferredresources. It is anticipated that the drilling programme will commence in thefourth quarter of 2006. CAG has committed up to US$2.5 million explorationexpenditure to the end of 2007, of the US$15 million cash on hand. The Medinandi permit is situated in the southern part of the Kenieba window oflower Proterozoic age Birimian strata, roughly 150km south-west of the townKenieba. It covers the southern extension of the SMZ zone of Randgold ResourcesLimited's Loulo permit. Gold was first discovered on the permit by a Frenchgeologist in 1953, and following a number of more recent exploration programmesin the late 1990's, it has remained largely under-explored due to thick soilcover. To date a zone of mineralisation at Medinandi North has been drilled (RC anddiamond). The mineralisation is marked by extensive silica alteration controlledby the emplacement of evolved granitic intrusions into structurally favourablesites along a granite - metasedimentary contact zone. The initial testing isconsistent with results extrapolated from major deposits already located in theKenieba area of western Mali. CAG CEO Greg Hunter said: "We are very excited about the opportunities Medinandiprovides CAG as it gives us a foothold in a historically proven belt that has todate delivered approximately 20 million ounces of gold. We want to advance thepermit areas as quickly as possible and deliver on our ambition of becoming asignificant African based gold company. Our exploration team has considerableexperience in west Mali, and understands the geology well. We are lookingforward to working with our partners and I believe this relationship not onlyunderlines our strategy and commitment but also consolidates our position in aregion that is attracting increased attention due to its prospectivity.Furthermore, CAG is developing strong strategic relationships with both theMalian Government and the private sector that bode well for the future of ourbusiness activities in the country." CAG also manages the Mali Goldfields SA JV with Mali Mining House SA, where aninitial package of 24 permits covering around 2,500 km(2) in south and west Maliis in the process of being refined. Follow-up targets are now being prioritisedfor the 2007. In the event of the exploration programme being successful, a separate companywill be formed for the development of the resultant project whereby the MaliGovernment would be entitled to a 10% free carried interest. * * ENDS * * For further information please contact or visit the Company website onwww.cag-plc.com Greg Hunter Central African Gold 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 This information is provided by RNS The company news service from the London Stock Exchange