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 Ashanti II Gold Project - Obotan Mine
 Technical ReportObotan is the Company's flagship gold project in southwestern Ghana. The project comprises four known deposits - the larger Nkran deposit, and the smaller satellite deposits at Abore, Adubiaso and Asuadi. The current global mineral resource estimate for Obotan comprises: Indicated 3.06 million tonnes grading 1.59g/t gold for 156,000oz; Inferred 15.64 million tonnes grading 2.1g/t gold for 1,053,000 oz, as reported in the NI 43-101 technical report above entitled "Technical Report Obotan Mineral Resources Estimation and Ashanti II Gold Projects, Ghana" dated February 10, 2011 and prepared by Robert Spiers, B.Sc. (Hons) MAIG of Hellman & Schofield Pty. Ltd. Obotan was previously mined by Resolute Limited before closing prematurely in 2002 after producing a total of 730,000 ounces at an average grade of 2.2 g/t gold and at a time of low prevailing gold prices averaging US$350 per ounce. March 2011 In-Fill Drilling Confirms Wide Zones of Moderate to High Grade Gold Intersections In March 2011, PMI Gold announced that ongoing in-fill and depth extension drilling at Obotan confirms wide zones of moderate to high grade intersections including 80.08m @ 7.49g/t gold. In addition, the drill program will be expanded from two to five rigs. The drilling was focused within 350 metres of the surface or 200 metres below the base of the Nkran open pit, to determine the potential for continued mining down the plunge of the deposit. Results have been received for seven holes totalling 3,183 metres, with intercepts summarized below: Table 1 - Significant Gold Intercepts (>10.00 g/t Au metres):
Note: True widths are approximately 60% to 70% of the length of the stated intersection lengths. Six of the seven holes intersected significant mineralization with NKR10-031intersecting a very strongly mineralized section of the southerly plunging Western Lode; hole NKR10-022 confirming the long intersections in the central stockwork zone; and holes NKR10-026, 028 and 029 filling in the sections on the weaker northern margin of the Nkran mineralization (see Figure 1 and 2 below for drill collar plan and assay cross section for hole NKR10-031). Visible gold is a common feature of the mineralization at Obotan, with free gold noted in multiple areas in hole NKR10-031 from 306.65 to 327.51 metres. This core returned an intercept of 20.86m @ 17.61g/t Au within an overall intercept of 80.08m @ 7.49g/t Au (uncut). The recently completed drill holes at Nkran are part of a broader ongoing circa 40,000m drilling campaign designed to upgrade and expand the current gold resource inventory at Obotan. Funds raised from the $35 million Australian IPO completed in December and the TSX.V placement will be used to underpin this expanded drilling program, as well as other programmes, including metallurgical testwork and geotechnical drilling, to evaluate the production potential of the Obotan Project. Two Diamond drill rigs on site - Expanding to five Currently PMI has two diamond drill rigs involved in the Obotan resource upgrade drilling. African Mining Services Ghana (AMS), a wholly owned subsidiary of Ausdrill Limited, an Australian publically listed company specialising in exploration drilling and contract mining in Africa, has agreed to supply two multipurpose (RC/Diamond) crawler mounted drill rigs and one crawler mounted RAB/AirCore drill rig. The first multipurpose drill rig is to be delivered to PMI to commence operations by June and the second rig by December; the RAB/Aircore rig is to be delivered in July, 2011. This increase to PMI's drilling capacity is expected to enable PMI to complete its 2011 proposed resource upgrade and exploration drilling programmes successfully. Table 2 - Drill Collar Data: January 2011 Resource Drilling Intersects Broad Gold Zones at Nkran deposit, Obotan Drilling designed to confirm the internal continuity and delineate extensions to the mineral resources below and adjacent to the current open pit In early January 2011, the Company reported on excellent results from recent resource in-fill and planned 40,000 metre extension drilling at Obotan. PMI Gold is actively pursuing its 2011 exploration and resource evaluation program, including a resource upgrade and extension drilling ahead of a planned Pre-Feasibility Study at the Obotan Project, targeted for completion by year-end. Obotan, which offers the opportunity for a near-term development project, is the Company's flagship gold project in southwestern Ghana. The project comprises four known deposits - the larger Nkran deposit, and the smaller satellite deposits at Abore, Adubiaso and Asuadi. The current global mineral resource estimate for Obotan Robert Spiers, B Sc (Hons) MAIG, of Hellman & Schofield Pty. Ltd., available above. 
 Obotan was mined historically by Resolute Limited before closing prematurely in 2002 after producing a total of 730,000 ounces at an average grade of 2.2 g/t gold and at a time of low prevailing gold prices averaging US$350 per ounce. PMI Gold recently completed 15 confirmation and in-fill diamond drill holes for 6,399 metres at the larger Nkran deposit. The drilling, which is part of an ongoing drill program of up to 40,000m, was designed to confirm the internal continuity and delineate extensions to the mineral resources below and adjacent to the current open pit. The drilling was focused within 350 metres of the surface or 200 metres below the base of the Resolute open pit, to ultimately determine the potential for continued mining down the plunge of the deposit. Results have been received from nine holes, with better intercepts summarized below and a full list of intersections following these:
1As reported in the technical report entitled "Technical Report Mineral Resources Estimation for the Obotan Gold Projects, Ghana" dated December 8, 2010 and prepared for the Company by Robert Spiers, B Sc (Hons) MAIG, of Hellman & Schofield Pty. Ltd., available at the start of this property report. Table 1 - Significant Gold Intercepts (>10.00 g/t Au metres):
**NSR - no significant results Table 2 - Drill Collar Data: 
Eight of the nine holes intersected significant mineralization with seven holes (NKR10-016, -017, -019, -021, -022, -023 and -025) intersecting multiple zones of mineralization from the parallel Western and Eastern Lodes and the broad, central stockwork zone. NKR10-024, drilled in the south-western limit of the deposit, only intersected weak mineralization.  Recent drilling, Nkran deposit showing drill hole locations The excellent results from the drilling confirm the integrity of the mineralization at Nkran as well as the potential for both depth and strike extensions. This is highlighted by the results of NKR10-016, drilled in the southern half of the deposit, which intersected 45.0m @ 3.41g/t Au in the Western Lode approximately 100m down-dip of historical drilling by Resolute. The broad zones of mineralization intersected in NKR10-018 and -022 occur in the central stockwork zone of the deposit where there is coalescence of the various zones.  Cross-section 210,205N, Nkran Pit, Obotan Gold Project  Cross-section 209,950N, Nkran Pit, Obotan Gold Project Visible gold is a common feature of the mineralization at Obotan, with an intersection of free gold noted in NKR10-025 at a depth of 391.5 metres (see photograph below). This core returned an intercept of 0.28m @ 320g/t Au within an overall intercept of 12.65m @ 8.95g/t Au (uncut).  Visible Gold in Altered Meta Sediments - DDH NKR10-25-391.50 metres The recently completed drill holes at Nkran are part of a broader ongoing circa 40,000 metre drilling campaign designed to upgrade and expand the current gold resource inventory at Obotan. The funds raised from the recently completed $35 million Australian IPO and TSXV placement will be used to underpin this expanded drilling program, as well as other programmes, including metallurgical testwork and geotechnical drilling, to evaluate the production potential of the Obotan Project through a Pre-Feasibility Study targeted for completion by the end of calendar 2011. With two diamond drill rigs currently on site, the resource upgrade drilling is expected to be completed in about the June Quarter of 2011, which will allow for an updated resource estimate to be undertaken in the September Quarter of 2011. This timing may be fast-tracked, subject to the availability of additional drill rigs which are currently being sourced. As part of the expanded drilling program, the Company also plans to test for deeper, down-plunge extensions of the mineralization below the limit of the current resource, greater than 400m below the surface (greater than 300 m below the base of the open pit). The deeper potential has been highlighted by the fact that the deposit has not been closed off by drilling, with a historical intersection of 4.0m @ 8.95 g/t Au located some 326m below the base of the pit, confirming that the structure hosting the gold mineralisation at Nkran extends at depth. Balance of Results from 2010 Spring Drilling Program Released In mid October the Company released the balance of results from the remaining 22 holes of a 65 diamond drill program commenced in May. The program consisted of a total of 10,877 metres, with 6,315 metres in 35 resource definition drill holes and 4,562 metres in 30 quality control (QC) drill holes. The results from these 22 drill holes were not included in the recent NI43-101 Obotan mineral resource estimate by Hellman and Schofield Pty Ltd of Australia, which stated: Indicated 3.06 million tonnes grading 1.59 g/t gold for 156,000 oz; Inferred 15.64 million tonnes grading 2.1 g/t gold for 1,053,000 oz; however they will be included with additional new drill results in the next resource estimate update expected in early 2011. Drilling was completed at the Nkran ('NKR'), Adubiaso ('ADP'), Asuadai ('ASP') and Abore ('ABP') deposits. Table 1 - Significant Gold Intercepts (>10.00 g/t Au metres):
 Field work was supervised by Donald Allen, MASc. P.Eng.(B.C.) and Paul Abbott MSc., Consulting Geologists. HQ, and NQ core was logged, sawn and sampled on site, with half samples sent to SGS Laboratory in Tarkwa, and analyzed for gold by fire assay-AA on a 50 gram sample charge. Where visible gold was noted, on occasion both ½'s of the core were assayed to reduce sample bias after geological logging and photographing (please see http://www.pmigoldcorp.com/i/maps/NR10-10VGphotos.pdf for photos from the drill program). Internal QC consisted of inserting both blanks and standards into the sample stream and multiple re-assays of selected anomalous samples. Where multiple assays were received for an interval, the final value reported was the average of all results for the interval. Results from the QC program suggest that the reported results are accurate. The data also suggests that diamond drilling may understate the gold grades relative to reverse circulation drilling, based on the larger sample sizes obtained with RC drilling. Intercepts were calculated with a minimum 1.0 g/t Au cut off at the beginning and the end of the intercept and allowing for no more than ten consecutive metres of less than 1.0 g/t Au internal dilution. Intercepts above 10.0 g/t Au metres are reported separately. Grade x Width intercepts of less than 10.0 g/t Au metres were not reported. True widths are estimated at from 50% to 90% of the stated core length. Results from May 2010 Drilling In August, we reported the results from the first 43 of 65 diamond drill holes which consisted of a total of 10,877 metres, with 6,315 metres in 35 resource definition drill holes and 4,562 metres in 30 quality control (QC) drill holes. Drilling was completed at Nkran (holes labeled below with 'NKC' and 'NKR'), Adubiaso ('ADP'), Asuadai/Edubia ('ASP') and Abore ('ABP'). At that time Douglas R. MacQuarrie, President and CEO commented: "We have achieved the objective of this drill program which was to confirm, and to commence expanding, the historical Obotan drill data base. The excellent grades, widths and continuity of the gold mineralization intersected in drilling at Nkran clearly indicate the potential of this zone for renewed mining activities - by either a pit push back or underground bulk mining techniques. In addition, significant near surface gold mineralization was noted at Adubiaso, Asuadai and Abore. Table 1 - Significant Gold Intercepts (>10.00 g/t Au metres):
Maiden NI43-101 Mineral Resource Estimate reported August 2010 In August 2010, PMI announced the Mineral Resources for five nearby gold deposits at Obotan were estimated by Hellman and Schofield Pty Ltd of Australia as follows:
The location, quantity and distribution of the current data are sufficient to allow the classification of Measured, Indicated and Inferred Resources. For the near surface mineralisation where MIK (multiple indicator kriging) modeling methodology was employed, mineral resource estimates are reported above a 0.5g/t Au economic cut-off grade. MIK modeling was also used for the deeper underground mineralisation (Nkran Underground), and the mineral resource estimates are reported above a 1.50g/t Au economic cut-off grade. An assumed oxidation surface was utilised. Summary results for all individual project areas are presented below and are effective as of the 23rd of August 2010.
The table includes possible near surface depletion as a result of local miner activity to depths estimated to be up to 20 metres. A 10% discount to inferred and indicated resource estimates was applied to all project areas by H&S in the table above, with the exception of Nkran where no depletion was applied due to the inaccessibility of the main mineralized zones and limited observed surface activity. The figures in the table may not sum due to rounding. Significant figures do not imply an added level of precision. H&S has not, to date, undertaken an economic viability analysis with respect to the inferred resources at the Obotan project. Based on the significant resources now confirmed at Obotan, PMI Gold has initiated a Pre-Feasibility Study, which on acceptance by the Government of Ghana, will allow us to convert our mineral licenses at Obotan into a Mining Lease to prepare for future production. PMI Gold will also undertake a significant follow-up drilling program following its ASX co-listing which will be aimed at increasing the gold resource at Obotan. The Qualified Person with respect to the mineral resource estimates at the Abore, Adubiaso, Asuadai and Nkran deposits, Obotan Gold Project, is Robert Spiers, BSc Hons, DM Appl Geol / Geophy MAIG, a full time consulting geologist with Hellman and Schofield Pty Ltd. based in Melbourne, Australia. Mr. Spiers has been involved in preparation and reporting of resource estimates in accordance with JORC guidelines for more than 12 years, and NI43-101 guidelines for approximately 6 years. Mr. Spiers reviewed the available data supplied to him by PMI Gold Corporation, and performed sufficient tests to conclude that the quality control measures undertaken by PMI Gold Corporation have established that the diamond drilling and subsequent sampling is representative and free of any biases or other factors that may materially impact the reliability of the drilling, sampling and analytical results; and that the sample preparation, security and indicated analytical procedures adopted by PMI Gold Corporation and the laboratories utilized provide an adequate basis for the current Mineral Resource Estimates. Mr. Spiers has been involved with the Obotan Project since October 2009, and visited the project site on two separate occasions, from the 8th to 18th of November 2009 and again from the 14th to 22nd April 2010. Obotan Acquired November 2006 PMI Gold acquired, by application to the Government, the 89 square km Abirem and Abore concessions - which cover the former Obotan Mine operations of Resolute Mining of Perth. Resolute ceased mining when the price of gold fell below US$320 per ounce and handed the property back to the Government of Ghana in July 2006 after fully completing the property reclamation.
A total of 730,000 ounces of gold were produced at Obotan, with 590,000 ounces produced at an approximate grade of 2.2 g/t gold from the Nkran pit, and a further cumulative 140,000 ounces from the Adubiaso and Abore pits. Mining ceased in December 2002. In 2003, the mill was sold in and removed from the property. The Nkran pit is currently water filled. Local galamsey workers continue to work the high-grade extensions of the Galamsey Reef, the strongest reef outlined during the mining operation, beyond the south end of the pit. Photos
Prior to completing mining at Nkran, Resolute conducted extensive studies on the feasibility of continuing mining from underground mineralization beneath the pit. Modeling completed with a US$350 gold price suggested good potential for establishing an underground operation. |
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