African Gold Group Inc (CVE:AGG) (OTCMKTS:AGGFF) (FRA:3A61) said the latest drill assays from its Kobada gold project in Mali continue to show the potential to expand resources at the property.
The company said it had now completed two phases - 3A and 4A - at its flagship site, which was aimed at upgrading the oxide resources to the higher confidence indicated and measured category and to initially prove the presence of mineralisation at the neighbouring Gosso shear zone.
The West-Africa-focused mining group aims to include these drill results into the updated resource estimate for Kobada, which is on track for early this year.
READ: African Gold Group announces 'significant' high-grade gold results from its Kobada project in Mali
"It is very pleasing to have completed the initial 6,300 m phased infill drilling programme along our Kobada main shear zone and the step-out drill campaign at the nearby Gosso shear zone," said Danny Callow, CEO of the group in a statement.
"The results from Gosso show that our regional focus that has identified up to 55 km of shear zones on the property which have the potential to be mineralised is bearing fruit, which can be converted into future resources. This is extremely encouraging for significant near-term resource upside potential."
The company boss told investors he believes this year will be "transformational" for the company, adding while these are "early days in the evolution of understanding the full Kobada potential, our short-term target still remains to hit 1 million ounces of mineable reserves as soon as possible".
The latest drill highlights included 39.48 grams per ton (g/t) of gold over 3 metres (m) in one hole, including an intersection of 17.90 g/t of the yellow metal over 1m and 94.00 g/ gold over another 1m.
Previously announced drill highlights had already confirmed gold mineralization at the Gosso target and delineated around 750 m of initial strike length. Intercepts included 4.25 g/t gold over 3.10m, including 10.40 g/t gold over 1.20 m.
After evaluating the results over the next couple of months, African Gold said it aims to continue with its planned Phase 4B and 4C drilling.
It said it had been "encouraged" with the large number of high-grade intersections at very shallow levels, as well as at deeper levels, but still in the “soft-rock” oxidic saprolite, which extends deeper than originally anticipated.
Andy Rompel, vice-president (VP) of exploration at the company said "we are now assured that our prolific Kobada shear zone extends further north and most importantly it is mineralised." He added: "We will continue to pursue the Kobada shear northwards during our next campaigns."
African Gold Group is on track to become Africa’s next mid-tier gold producer, with the company targeting production of 100,000 gold ounces per year from Kobada by the second quarter of 2022.
Other exploration locations have also been identified on the Kobada, Farada and Kobada Est concessions, offering potential for an increase in resource.
Contact the author at giles@proactiveinvestors.com