African Gold Group Inc (CVE:AGG) has told investors that a reinterpretation of airborne data at its flagship Kobada gold project in Southern Mali augurs well for a potential expanding of the resource there.
In an exploration update on Monday, the firm said it had now delineated 55 kilometres (km) of shear zones across the Kobada, Faraba and Kobada Est concessions at the property - 80% more than the 30km previously.
READ: African Gold says updated results from Phase 4 in-fill drilling have extended the depth of the oxide-sulphide boundary at the Kobada Gold project
The explorer also invited shareholders and the general public to join the team for a live webinar on November 25 at 10am EST to discuss its ongoing 10,000 metre (m) drilling program. Registration and participation details can be found HERE.
"With only 4 km of the shear zones drilled to date, the recent findings further confirm the belief of the management team that we have only scratched the surface of the true potential of the Kobada Gold project," said Danny Callow, the chief executive of the company, in a statement.
"The 55 km of highly prospective shear zone structures identified by AGG have the potential to increase the resource of the AGG portfolio, and we have put together a detailed drill program to target these new areas," he added.
"The recent better than expected drill results from the ongoing drilling program and delineation of new shear zones continue to strengthen our vision of building a long-term sustainable operation in West Africa and growing value for our shareholders. We now firmly believe that this has the potential to not only substantially increase the mine life as detailed in the 2020 DFS, but also the potential to increase the output from the current 100,000 ounces of gold per annum."
Re-processing and interpretation of the airborne data began during July this year and the report was received in October. It was carried out by John Bell, a geophysicist, with in-depth knowledge of the Birimian geology, noted the firm.
African Gold expects to deliver an updated resource estimate during the first quarter of 2021, including results from ongoing drilling.
The project currently hosts a measured and indicated (M&I) resource of 1.2 million gold ounces at 0.86 grams per ton (g/t), and an Inferred resource of 1.1 million gold ounces at 1.33 g/t, which have been estimated along only 4 km of strike length of the Kobada shear zone.
A definitive feasibility study showed gold production of 728,654 ounces over a 9.4 year mine life, based on current reserves, at all-in-sustaining costs of US$782 per ounce. It also models a pre-tax net present value (using a 5% discount rate) of US$283.9 million with an internal rate of return of 45.5%.
The firm is targeting the start of construction in the fourth quarter of this year, with first gold in the second quarter of 2022.
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