Definitive Feasibility Study For The Kobada Gold Project

TORONTO - African Gold Group, Inc. (AGG) reported that Definitive Feasibility Study (the “2021 DFS”) for the Kobada Gold Project, in Southern Mali, is available. The DFS was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).

Danny Callow, CEO, said, “Over the past two years we have worked tirelessly to demonstrate that the Kobada Gold Project has the potential to be one of the largest new gold projects in West Africa. Since the implementation of management changes in August 2019, and with new drilling campaigns totaling around 18,000 meters, we have managed to increase our reserve base by 144% (66% increase over the 2020 DFS). With our updated 2021 DFS we have shown that Kobada has the potential to produce over 1.2 mln oz of gold over a 16 year mine life while delivering solid economics with post-tax NPV5% of US$355 million and an IRR of 38%. Kobada is a predominantly free-dig operation, requires limited blasting, and processing of ore will be through a very simple and proven gravity plus CIL plant with recoveries over 95% in both oxides and sulphides. The inclusion of sulphides in this updated DFS, which are free milling and easy to process, opens significant future opportunities within the sulphide resource as well as continuing growth possibilities in the oxides. We are confident in the capital estimates as compared to recent similar completed projects in the region, and these costs remain very competitive for a project of this size. The potential to produce significant free cash flows after tax and low capital expenditure highlights very attractive economics of our Kobada project.

Based upon our detailed understanding and integrity of the current resource, on only 4 km of our 55 km of identified shear zones we believe that there continues to be significant potential to increase our 3.1 million ounce total resource substantially further. Kobada is now positioned as a great construction opportunity, in a prolific gold-producing area of West Africa”

The Kobada Gold Project is located in southern Mali, approximately 125 km in a straight-line south-southwest of the capital city Bamako and is situated adjacent to the Niger River and the international border with Guinea.

AGG has completed 114,357 meters of diamond, reverse circulation, air core and auger drilling between 2005 and 2012. In 2015, AGG completed a further 1,398 meters of diamond core drilling over 13 diamond drill holes. The current AGG exploration re-commenced in August 2019 and an additional 18,000 meters of exploration drilling has been completed. Gold mineralization is present in the laterite, saprolite, and quartz veins that comprise the project, and in the sulphidic hard rock underneath. There are also placer style deposits in the region.

The 2020 drilling campaign, running from September 2020 until January 2021, consisted of 43 drillholes totaling 6,364 m. Of these, 4 drillholes (522 m) were drilled at the Gosso target and the remaining 39 drillholes (5,842 m) were drilled in the “gap” area and northern extents of the northern domain of the Kobada main shear. The drillholes at the Gosso target were all completed using diamond drilling while the drilling at Kobada was a combination of diamond drilling (8 holes @ 1,258 m) and RC drilling (21 holes @ 2,890 m) with selected RC drillholes being completed with diamond tail (10 holes @ 1,221 m RC and 473 m diamond) to drill into the sulphides.

The main focus of the drilling was to confirm and improve the confidence in the geological model to enable additional mineral resource conversion of the oxides to the measured and indicated resource categories. The drilling was also used to test and confirm the depth extension of the saprolitic (soft) material, the transition zone and the sulphides at depth.

For the Kobada main shear drilling, 34 drillholes intersected the mineralized zones and had an average accumulated mineralization width of 29 m @ 1.22 g/t. The drilling campaign has significantly contributed to the increase in the indicated resource in the northern domain of the Kobada main shear, and also highlighted areas of deeper weathering with oxide material extending further down to a depth of approximately 160 m in places, approximately 60 to 80 m deeper than originally anticipated. The drillholes at Gosso target confirmed the mineralization observed in the historical drillholes with the 4 drillholes having an average accumulated mineralization width of 12 m @ 1.11 g/t.

Upside potential remains in the short term at the Kobada Main Shear to upgrade some additional inferred mineral resources to the indicated category. In addition to this, the Project has significant upside potential in the 55 km strike length of potential mineralized shear zones. The Gosso target is considered the most prospective due to its similar mineralization profile to Kobada Main Shear and close proximity to the processing plant. To date, only limited drilling has been completed (21 drillholes) at Gosso, with exciting drill results such as 1.15 g/t Au over 12.5 m, including 7.19 g/t Au over 1.3 m. In addition, initial field investigations by the AGG geologists, in early 2021, have highlighted significant upside potential at the Kobada Est targets where artisanal mining has exposed mineralized structural features.

The Kobada Gold Project deposit is planned to be mined utilizing standard open-pit mining methods using articulated trucks and a hydraulic loader (hydraulic shovel or excavator). Approximately 66% of the raw material to be mined is contained in the saprolite and laterite ores, and the vast majority will be free digging with no blasting required. The final pit design for the Kobada Gold Project deposit is approximately 4.3 km long, with a maximum width of 500 m and a maximum depth of 180 m.

The open pit mining operation will last approximately eleven years, during which the lower-grade material will be stockpiled on a pad close to the primary crusher location. The mine plan targets higher grade oxide ore zones at the early phase of the project to feed into the process plant in order to produce an average of 100,000 oz per annum for the first 10 years, and thereafter lower production output as the grade drops and stockpiles are treated. Further targeted drilling will aim to improve the output from Years 11 to 16 by drilling the inferred resources in and around the existing pit shell. Management remains confident that further drilling will yield additional measured and indicated ounces to convert into additional reserves. Over the life of the Project, 45 Mt of ore will be mined and delivered to the processing facility, and a total of 158 Mt of material will be mined and placed on the waste dumps, representing a life of mine stripping ratio of 3.5:1. The mining operations will be undertaken by a specialized contractor selected by the Company. This contractor will be responsible for the management and maintenance of its own mining fleet and operators, while AGG will oversee the mine planning and geological grade control aspects of the operation. There remains an option for owner mining through leasing of mining equipment, and these options will be looked at as part of the detailed engineering design process.