African Gold Group (CVE:AGG) said it has kicked off a phase three drill program at its flagship Kobada Gold project in southern Mali in a bid to increase resources there.
The 10,000 metre (m) program, comprising around 160 holes, will use reverse circulation (RC) and diamond drilling and the aim is to upgrade the current 575,000 ounces (oz) in the inferred oxide resource category to the higher confidence measured and indicated (M&I) with an eye on defining a 1 million ounce (Moz) reserve.
It comes after the group delivered a robust definitive feasibility study (DFS) for the project in June this year, which showed a pre-tax net present value (NPV) of US$283.9 million with an internal rate of return (IRR) of 45.5% at US$1,530 per ounce of gold.
"The delivery of the robust DFS, demonstrating a project with potential to produce 100,000oz per annum, with highly favorable financial deliverables, was a major milestone in the ongoing development of our flagship, ready for construction, Kobada Gold Project,” said Danny Callow, CEO of the company in a statement.
"Despite some of the recent challenges in Mali, we have succeeded in mobilizing and commencing exploration drilling. We look forward to re-commencing targeted exploration drilling to bolster the properties significant blue-sky potential by expanding resources and proving the upside potential of what could be a 3 to 5 million ounce deposit.”
The drilling will focus on extending the main shear zone, the firm said, to prove strike extension northwards for at least another 4 kilometres.
It will also test the Gosso target - a fault zone 5km to the East of Kobada main shear zone where a test pit has already been dug. That target saw positive gold assay results from grab samples earlier this year, including returned 4.60 grams per ton (g/t) of the yellow metal and 3.16 g/t of gold.
African Gold said it intended to initially diamond drill to the north and the south, stepping away from the know fault location in the outcrop, and then follow up with RC drilling for grade estimation.
The drill contract has been awarded the contract to Etasi Drilling, a Malian drilling company. ETASI is the successor company to AMCO, which carried out the Phases 1 and 2 programs during the 2019 and 2020 drilling program.
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