African Gold Group active in Ghana

Less than year into its life as a publicly traded vehicle, Toronto-based African Gold Group (AGG-V) has drilled gold mineralization beneath some promising trenches at its exploration concessions in Ghana.

African Gold has so far reported results from the first 24 holes drilled at its 108-sq.-km Mankranho concession, which represents an 8-km, little-drilled portion of the northernmost extension of the Yamfo-Sefwi gold belt (T.N.M., March 5/04).

Immediately southwest of Mankranho, Newmont Mining (NEM-N) is building its Ahafo mine, due to come on-stream in late 2006 at a production rate of 500,000 oz. per year and a total cash cost of US$185 per oz. The Ahafo mine will tap into a 45-km-long concession hosting a series of shallow deposits that collectively host a reserve of 108.6 million tonnes grading 2.4 grams gold per tonne.

African Gold Group has divided its Mankranho concession into five areas and mostly focussed on Area 1, in the southwestern corner of the concession, contiguous with Ahafo.

In the northern part of Area 1, drilling returned up to 16.5 metres (from 94 metres) grading 2.82 grams gold in hole 15, and 18.6 metres (from 75 metres) grading 1.25 grams gold in hole 2.

Drilling in the southern part of Area 1 was highlighted by a 16-metre interval (from 60 metres) of 1.86 grams gold in hole 3.

These drill results represent about two-thirds of an ongoing, 10,000-metre program that is the centrepiece of a US$2.4-million first round of exploration work at Mankranho.

Overall, African Gold says this first pass of drilling has given it a better idea of the concession’s geology and structure, which is characterized by greywackes and phyllites, with occasional thin interbeds of volcaniclastic tuffs and basalt.

The Mankranho concession was staked four years ago by U.S.-based Columbia River Resources (CRVV-O), in which African Gold owns a 68.8% interest. African Gold can earn a 51% interest in the Mankranho licence from Columbia by spending US$1.25 million, and a further 34% by spending another US$1 million.

African Gold has also reported trenching and drilling results from its Moseaso project, situated 70 km southeast of Mankranho on a 9-km segment of the northern tip of the Asankrangwa gold belt.

Trenches 1 and 2 returned highlights of 32 metres of 1.79 grams gold and 31 metres of 2.02 grams gold, respectively. Follow-up drilling totalling 2,155 metres returned 51.5 metres (from 64 metres) of mineralized porphyry grading 0.74 gram gold in hole 5, and 13.3 metres (from 98 metres) of 2.16 grams gold in hole 8.

The company describes the results as consistent with the style of mineralization seen at the Nkran Hill deposit to the south, where 34.5 million tonnes of 2.22 grams gold were defined and partly mined in the 1990s.

African Gold has a 5-year option agreement with Ghana-based Moseaso Mining to acquire the 9.3-sq.-km Moseaso licence, subject to a 15% net profits interest if there is any production. To fulfil the option, African Gold must pay US$25,000 each January for five years. The first two payments have been made.

Elsewhere in Ghana, African Gold holds options to acquire the Twedee gold licence in the Asankrangwa belt and the Nyankumasi gold concession, 30 km southwest of Newmont’s other big mine-building project in Ghana, Akyem, in the country’s southeast.

In early 2005, African Gold appointed Benjamin Adoo as chairman, Gregory Hawkins at interim chief executive officer, and Michael Nikiforuk as president. Hawkins and Nikiforuk replace former president and CEO Kevin van Niekerk, who is pursuing other ventures.

In November 2004, Durand Eppler and Henry Reimer joined African Gold’s newly created advisory board.