31st Mar 2008 09:53
Central African Gold PLC31 March 2008 Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining 31 March 2008 Central African Gold Plc ("CAG" or the "Company") Increases Underground Reserve Estimate at Bibiani by 31% to 1.38Moz CAG, the AIM traded gold mining and exploration company, has increased itsunderground Ore Reserve estimate at its Bibiani gold mine in Ghana by 31% to1.38Moz Au following revised mineral resource estimation, mine planning andscheduling. Highlights: • Bibiani main zone ("Main Zone") underground Ore Reserve estimate increases to 13.85 million tonnes ("Mt") at 3.10 g/t Au for 1.38Moz Au at a cut-off grade of 2.10 g/t Au (JORC compliant); • Ore Reserve estimate up 31% to 1.38Moz Au (September 2007: 1.05Moz Au); • Independent mining consultants, Ukwazi Mining Solutions, estimate that 10.75 Mt @ 3.10 g/t Au for 1.08Moz Au are extractable by the current mining methods (September 2007: 7.52 Mt @ 3.55 g/t Au for 858 koz Au); • Ore Reserves estimated from within Measured and Indicated Mineral Resources totalling 26.27 Mt at 2.61 g/t Au for 2.20Moz Au at a cut-off grade of 1.25 g/t Au (JORC compliant); • Further in-fill Diamond Core Drilling from surface up to a depth of up to 350m below surface has been completed (17 boreholes for 6,781m) and incorporated in the revised estimation; • Underground Diamond Core Drilling (853m) has continued, with further channel sampling (459 saw and chisel samples) of exposed mineralised structures included in the revised estimation; • Mineralisation is open-ended along strike in both directions and down dip. Greg Hunter, CEO of CAG, commented, "The 31% increase to 1.38Moz gold in therevised underground Ore Reserve estimate for the Bibiani orebody is excellentnews for the Company, underpinning the potential for the development of a plusten year viable underground mining operation. Given that the process plant iscapable of treating 225,000 tonnes per month ('tpm'), and with growingconfidence in the sustainability of the ore body, there is a real opportunity tofully utilise the planned conveyor decline which has a 200,000 tpm capacity, andincrease our annualised ounce production up well over 150,000 oz/yr". Background: The Bibiani gold mine has historically produced approximately 4 million ounces("Moz") of gold ("Au") from a combination of high-grade underground (1902-1967)and opencast (1997-2005) mining. The historic underground mining exploitedvarious narrow (1-5m) zones of mineralisation via three vertical shafts, andusing a cut-off grade of 7g/t Au extracted approximately 2Moz Au at an averagerecovered grade of 9g/t Au. The more recent opencast operation mined thebroader mineralised "halo" (widths up to 100 m, but generally 15-25m) at anaverage recovered grade of 3.5 g/t Au. Approximately 1.7Moz Au were recoveredfrom the Bibiani main pit with a number of smaller satellite pits and a tailingsre-treatment operation further contributing to a total of 2Moz from the morerecent operations. CAG is now focussed on increasing underground production to 100,000 tpm, whichit aims to achieve during Q4 2008. Initial production ramp-up to 50,000 tpmcontinues and will be sustained from a mechanised long-hole open stopingoperation below the main Bibiani open pit, utilising the existing decline to 9Level ("9L"). The bulk mining equipment has been commissioned and undergrounddevelopment, old stope clean-up, and initial stoping has progressed sinceOctober 2007. The Bibiani process plant has a throughput capacity of 225,000tpm. Revised Mineral Resource and Ore Reserve estimation Snowden Mining Consultants ("Snowden") has been retained by CAG in an advisorycapacity for mineral resource estimation procedures. Ukwazi Mining Solutions ("Ukwazi") has been retained to advise on mine planning, stope design andscheduling at Bibiani. The current JORC compliant Ore Reserve statementundertaken by CAG, has been signed off by CAG's Competent person, Phil Bentley,and Ukwazi. This estimate follows on from previous critiques on the estimates(February 2007, September 2007) undertaken by Ukwazi/Snowden/CAG. The Ore Reserve estimate is stated at a gold price of US$ 750/oz, and an in situpaylimit of 2.10g/t Au. Stopes have been designed based on a 2 g/t Au cut-off. Underground Mineral Resources and Ore Reserves The Ore Reserve estimate is based on a continued refinement of first principlesgeological modelling and mineral resource estimation on the main Bibianiorebody, coupled with detailed mine planning and scheduling. The mineralresource estimation within the stope outlines has been refined to 7.5m x 7.5m x3m blocks within five geological domains. Modelling of the geological zones wasachieved by sectional digitising of geological units and alteration zones,especially silicification, brecciation and sulphidation, as well as discretestructural parameters that impact on the geometry of mineralisation. Goldgrades for the reported underground resource model have been determined usingOrdinary Kriging ("OK") with grades interpolated into the parent blocks. Thegold 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 miningmethod have been developed by Ukwazi, and have been applied to converting stopeoutlined resources to Ore Reserves. BIBIANI UNDERGROUND MINERAL RESOURCES Measured Kt Au g/t Au Koz Ug - Bibiani (1.25g/t co) 12,838 2.71 1,119Subtotal 12,838 2.71 1,119 Indicated Ug - Bibiani (1.25g/t co) 13,431 2.51 1,084Subtotal 13,431 2.51 1,084 TOTAL M & I 26,269 2.61 2,203 Inferred Ug - Bibiani (1.25g/t co) 12,416 2.18 869Subtotal 12,416 2.18 869 TOTAL UG RESOURCES 38,685 2.47 3,072 The Proven and Probable Ore Reserve estimates within each stope have beengenerated by modifying the relevant in-stope Mineral Resources. These wereclassified according to the distribution of sampling in the OK neighbourhood,utilising a combination of the normalised variance, sample density and spatialcontinuity (more than 92.5% confidence Measured, 70-92.5% confidence Indicated,less than 70% confidence Inferred). The long-hole open stoping mining methodalso impacts on certain less than 2g/t Au blocks being caught up in the miningas internal dilution. This classification scheme takes into account theuncertainty in the estimates related to the proximity and distribution of theinforming composites. Coning levels are planned on 9L (approximately 270m below surface) and 13L(390m), from which ore will be delivered to an underground crushing station on14L (420m). The domained estimation is constrained to 13L and above, reflectingthe current extent of mine planning and scheduled extraction of ore. ProvenReserves are restricted to 9L and above, where current infrastructure is inplace. Below 9L to 13L, all measured and indicated resources are modified toProbable Reserves. The conversion to Ore Reserves was undertaken at a 2.10g/t Au stope cut-offgrade. Each stope has been fully diluted, comprising internal dilution (0-1.5 g/t Au Measured and Indicated blocks), and a provision for overbreak dilution at10% of tonnage at a grade of 0.82 g/t Au (the average 0-1.5g/t in stope blockgrade). The diluted stope was further modified for mining losses (5%) and a MineCall Factor of 95% (applied as gold loss from stope to ROM pad). Ore Reserve tonnage and grade estimates have been made both with and withoutmodifications for pillars. Ukwazi has completed an audit of the Ore Reserveestimation, and in particular a more detailed analysis of appropriate pillarmodifying factors applicable to the current long-hole open stoping mining methodand related ground stability issues. Of relevance is that CAG only plans tointroduce backfill into stopes extracted below 9L. Ukwazi have thus provided anestimate of the Ore Reserves extractable under certain pillar modificationfactors applicable at the moment, pillar modification is overall a 24% reductionin tonnage, with rib and breast pillars factored at 14% by volume, with zeroextraction. Coning pillars on 9L and 13L are factored 25% by volume, with anextraction of 75% during life of mine operations. Provision has been made for a30m thick crown pillars on 10L and 6L (under the existing openpit), andcontains 42,330 oz. Allowance has been made for 50% extraction of these duringthe course of the life of mine. BIBIANI UNDERGROUND ORE RESERVESFully diluted not modified for pillarsProven Kt Au g/t Au Koz Ug - Bibiani (paylimit 2.10 g/t) 4,142 3.20 426Subtotal 4,142 3.20 426Probable Ug - Bibiani (paylimit 2.10 g/t) 9,703 3.06 956Subtotal 9,703 3.06 956 TOTAL RESERVES 13,846 3.10 1,382 Modified in stope resources (PL 2.10 g/t) 13,846 3.10 1,382Modified in stope resources (>= 2.50 g/t) 9,764 3.45 1,082Modified in stope resources (>= 3.00 g/t) 5,974 3.88 746 Fully diluted modified for partial pillar extractionProven Kt Au g/t Au Koz Ug - Bibiani (paylimit 2.10 g/t) 3,502 3.16 355Subtotal 3,502 3.16 355 Probable Ug - Bibiani (paylimit 2.10 g/t) 7,250 3.09 721Subtotal 7,250 3.09 721TOTAL RESERVES 10,752 3.11 1,076 Pillars 3,319 2.87 306 Modified stope resources at stope cut-off grades of 2.50 and 3.00 g/t Aurespectively are also shown above to give an indication of the grade profile ofthe deposit. On a similar pillar / support basis, but higher stope grade cutoff, the Ore Reserve estimate fully diluted and modified for partial pillarextraction as at September 2007 was 7.52 Mt @ 3.55 g/t Au for 858 koz Au. Total UNERGROUND Ore Reserves September 2007 Stopes fully diluted and modified to include pillarsProven Kt Au g/t Au Koz Ug - Bibiani (3.0 g/t stope co) 2,755 3.45 305Subtotal 2,755 3.45 305 ProbableUg - Bibiani (3.0 g/t stope co) 4,763 3.61 552Subtotal 4,763 3.61 552 TOTAL RESERVES 7,518 3.55 858 The improved underground Ore Reserve estimate of 1.38Moz Au represents a 31%increase on those stated in September 2007 (1.05Moz). The reserve estimate isfully modified to include dilution, mining losses, and is stated against apaylimit of 2.10 g/t Au (inclusive of fixed and variable mining costs,metallurgical recovery, royalties and sustaining capital). The Ore Reserve estimates were undertaken internally by CAG's Dale Richards,Frans Dooge and Phil Bentley (all SACNASP affiliated), who between them havemore than 70 years' combined experience in the geological modelling of orebodiesand the use of geostatistics for the estimation of recoverable resources in golddeposits. For the purpose of reporting under the JORC code, Phil Bentley, CAGGroup Manager - Geology and Exploration, is the Competent Person. * * ENDS * * For further information please contact or visit www.centralafricangold.com orcontact: Central African Gold Plc Greg Hunter Tel: +27 (0)82 882 4222 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 In South Africa: Central African Gold Nicole Broome Tel: +27 11 676 2500 Mob: +27 83 601 1702 Russell and Associates Charmane Russell Tel: + 27 11 880 3924 Mob: + 27 82 372 5816 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, Zimbabwe andBotswana. It has a highly experienced management team, which has worked togetherfor four years managing six underground greenstone gold mining operations andbuilding exploration portfolios. CAG's portfolio includes the developing of Bibiani gold mine and two prospectinglicences in Ghana, which it acquired from AngloGold Ashanti Limited, twoventures in Mali covering 17 prospective permits and a licence in Botswanacovering the extension of the Kraaipan greenstone belt from South Africa. CAGacquired five mines and extensive exploration properties in Zimbabwe during2007. The management team is evaluating additional prospects in Africa toestablish CAG as a leading mid-tier African gold producer with world classexploration and production assets. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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