Background
The bulk of Ghana's 90 million ounces of gold production has come from the Ashanti and Bibiani Gold Belts. Situated in between these is the lesser known, however still very prospective, Asankrangwa Gold Belt. PMI Gold's Ashanti II Gold Project covers 70 kms of this Belt and includes dozens of historical local mining operations and three recent modern mines.
Interest in the Asankrangwa Gold Belt was renewed in 1995 after the first modern airborne magnetic survey was completed over southwest Ghana. The survey identified major deformation zones and cross structures that were spatially related to Ashanti's mega gold mine at Obuasi and to the numerous historical gold mines and showings that define the Belt.
Subsequently, PMI Gold acquired the former Obotan mine concessions (see below) and conducted over US$5 million in work programs over the balance of the Asankrangwa concessions, including ground and airborne geophysical surveying, drilling and a review by SRK Consultants Inc. This review established 17 regional target areas for further detailed exploration for large gold deposits. To date, only 6 of these targets have been partially drill tested.
Edubia Mining Lease
In August 2007, PMI Gold acquired the 13 square km Edubia Mining Lease which Adansi Gold Company (100% owned subsidiary) has the right to acquire for 100% interest subject to a 0.5% NSR royalty to the vendor. The Edubia Lease was originally issued in 1931 for a term of 99 years to one of the original indigenous owners of the concession that now hosts the world-famous AngloGold Ashanti Obuasi mine. Upon his death, the estate and title was formally acknowledged by the Government of Ghana and formal registration pursuant to the newer mining legislation commenced.
In the mid-1990's a license was granted over a much larger area, and work programs consisting of sampling of old adits, extensive trenching and soil sampling was completed. Adit samples to 2.8 g/t Au over 36 metres were reported in quartz stockwork systems hosted by Birimian metasediments and granitic intrusives (Griffis et al, 2002, in Gold Deposits of Ghana, pg 292). Some 213 short drill holes were completed, averaging 40 metres and with a maximum length of 126 metres. Gold mineralization was outlined in a zone from 20 to 60 metres wide and elongated northeasterly over a 700 metre length. Localized drilling results indicated 1 to 5 metre true widths with grades from 3.0 to 12.0 g/t Au.
Adansi can earn a 100% interest in the lease by making cash payments of US$100,000 (paid); by paying a further US$100,000 upon the receipt of a positive pre-feasibility study recommending production; and by reserving for the vendor a 0.5% net smelter returns royalty. In addition, Adansi retains the first right of refusal on any other Biney leases that form a part of the estate.
Douglas R. MacQuarrie, President and CEO comments: "The acquisition of the Edubia lease joins our Abirem and Abore concessions together and gives PMI Gold an additional 4,500 metre long and highly prospective gold in soil anomaly which is on strike with and part of a continuous 13,000 metre long trend on our concessions which host the former Nkran mine and the African Star deposit. Gold mineralization at Edubia may fit in with our model to develop deep, underground resources, and its location just 8 kilometres from our Nkran deposit is particularly attractive. We look forward to exploring the balance of the lease with our in-house geophysical crews and further drilling. "
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Drill Plan
In late August 2008, we acquired the Kaniago (Adansi) License by direct application to the Minerals Commission of Ghana.
Kaniago, which is 23 kilometres long and from 1.3 to 3.5 kilometres wide centered on the Ofin River, joins together our Abore Abirem (Obotan), Switchback, Fromenda, and Diaso Afiefiso concessions, now giving PMI Gold a continuous 70 kilometres of the central Asankrangwa gold belt. This completes the aggressive land acquisition program commenced by PMI Gold in 2003.
The concession covers a 54 square kilometre part of the former 390 square kilometre Dunkwa Continental Mining Lease where dredging activities were active from 1930 for nearly 70 years on the Ofin, and Ankobra Rivers (Asankrangwa gold belt) and the Oda and Jeni Rivers (Ashanti gold belt, southwest of our Kubi gold project). During this period some 1.45 million ounces of gold were recovered, with dredge production peaking in the early 1960's at 69,000 ounces per year (Minerals Commission, 2002).
Of prime interest to PMI Gold, the concession covers five northeast trending and deep seated gold mineralized trends, including the Juabo -- Nkran (Obotan) -- Edubia trend; the Switchback -- Abore Mine -- Keegan Essase trend; and the MEM -- Fromenda -- Miradani Mine trend. Historical reports from the dredging indicated increased gold grades in the Ofin River near the Miradani Mine (Ghana Geological Survey Annual Report 1964-1965 ) suggesting a local source for the gold. The intersection of the strong northeast gold trends with the north trending Ofin River linear is considered to be a prime exploration target for deep seated gold mineralization.
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