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PMI Gold updates resource estimate for Kubi gold project in Ghana, new drill results

Last updated: 18:08 16 Dec 2010 GMT, First published: 19:08 16 Dec 2010 GMT

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PMI Gold Corp (TSX.V:PMV) said Thursday it has received an updated NI 43-101 mineral estimate for its Kubi gold project in Ghana, with results indicating a significant increase in the average resource grade.

The company said that a previous estimate was undertaken by Golder Associates Africa in 2007 on the Kubi Main deposit, but the results were based on a geological cut-off rather than specific cut-off grades.

While PMI believes this model is valid, the company thinks the deposit can be more "tightly" defined for feasibility purposes, using a combination of geological and cut-off grade constraints. Golder's estimate showed an indicated mineral resource of 5.1 million tonnes @ 3.66 g/t containing 604,085 oz of gold.

The updated resource estimate, which was completed by SEMS Exploration Services of Ghana, produced a significant increase in the average mineral resource grade within the Kubi deposit, from 3.66g/t of gold to 5.48 g/t gold, which also resulted in greater confidence in the internal continuity of the mineralization to include a measured category, the company said.

According to the new results, the Kubi gold project contains a total measured and indicated resource of 1.32 million tonnes at 5.48 g/t gold, containing 233,000 ounces of gold, and an inferred resource of 0.67 million tonnes at 5.31g/t gold, containing 115,000 ounces of gold.

The company said that recent drilling at Kubi on the 513 Zone has also resulted in the discovery of additional gold mineralization. Three exploration holes were drilled on the zone for a total of 333 metres.

The 513 Zone is located on the altered eastern margin of the Ashanti shear, which hosts the AngloGold Ashanti Obuasi mine, located around 10 km to the north of the Kubi Gold project.

Highlights of the drilling include hole KV10-521, which returned significant gold grades to 3.68 g/t over an estimated true width of 5.14 metres.

"These drill results, on the Ashanti shear structure, are considered to be very encouraging given that drilling by previous operators was primarily focused to the east on the sub-parallel Kubi shear zone that hosts the Kubi Main gold deposit, and as a result the Ashanti structure has only been superficially explored to date," the company said in a statement.

PMI is planning additional drilling on the zone to determine the significance of the disovery, as well as auger drilling to extend the prospective zone a further four kilometres south to the Offin River, in the new year.

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