CAN Central A.G.

RNS Number:1329R
Central African Gold PLC
31 March 2008


 Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining

31 March 2008


               Central African Gold Plc ("CAG" or the "Company")

      Increases Underground Reserve Estimate at Bibiani by 31% to 1.38Moz


CAG, the AIM traded gold mining and exploration company, has increased its
underground Ore Reserve estimate at its Bibiani gold mine in Ghana by 31% to
1.38Moz Au following  revised mineral resource estimation, mine planning and
scheduling.



Highlights:



  * Bibiani main zone ("Main Zone") underground Ore Reserve estimate increases
    to 13.85 million tonnes ("Mt") at 3.10 g/t Au for 1.38Moz Au at a cut-off
    grade of 2.10 g/t Au (JORC compliant);

  * Ore Reserve estimate up 31% to 1.38Moz Au (September 2007: 1.05Moz Au);

  * Independent mining consultants, Ukwazi Mining Solutions, estimate that
    10.75 Mt @ 3.10 g/t Au for 1.08Moz Au are extractable by the current mining
    methods (September 2007: 7.52 Mt @ 3.55 g/t Au for 858 koz Au);

  * Ore Reserves estimated from within Measured and Indicated Mineral
    Resources totalling 26.27 Mt at 2.61 g/t Au for 2.20Moz Au at a cut-off
    grade of 1.25 g/t Au (JORC compliant);

  * Further in-fill Diamond Core Drilling from surface up to a depth of up to
    350m below surface has been completed (17 boreholes for 6,781m) and
    incorporated in the revised estimation;

  * Underground Diamond Core Drilling (853m) has continued, with further
    channel sampling (459 saw and chisel samples) of exposed mineralised
    structures included in the revised estimation;

  * Mineralisation is open-ended along strike in both directions and down dip.



Greg Hunter, CEO of CAG, commented, "The 31% increase to 1.38Moz gold in the
revised underground Ore Reserve estimate for the Bibiani orebody is excellent
news for the Company, underpinning the potential for the development of a plus
ten year viable underground mining operation. Given that the process plant is
capable of treating 225,000 tonnes per month ('tpm'), and with growing
confidence in the sustainability of the ore body, there is a real opportunity to
fully utilise the planned conveyor decline which has a 200,000 tpm capacity, and
increase our annualised ounce production up well over 150,000 oz/yr".


Background:



The Bibiani gold mine has historically produced approximately 4 million ounces
("Moz") of gold ("Au") from a combination of high-grade underground (1902-1967)
and opencast (1997-2005) mining. The historic underground mining exploited
various narrow (1-5m) zones of mineralisation via three vertical shafts, and
using a cut-off grade of 7g/t Au extracted approximately 2Moz Au at an average
recovered grade of 9g/t Au.  The more recent opencast operation mined the
broader mineralised "halo" (widths up to 100 m, but generally 15-25m) at an
average recovered grade of 3.5 g/t Au.  Approximately 1.7Moz Au were recovered
from the Bibiani main pit with a number of smaller satellite pits and a tailings
re-treatment operation further contributing to a total of 2Moz from the more
recent operations.



CAG is now focussed on increasing underground production to 100,000 tpm, which
it aims to achieve during Q4 2008. Initial production ramp-up to 50,000 tpm
continues and will be sustained from a mechanised long-hole open stoping
operation below the main Bibiani open pit, utilising the existing decline to 9
Level ("9L"). The bulk mining equipment has been commissioned and underground
development, old stope clean-up, and initial stoping has progressed since
October 2007. The Bibiani process plant has a throughput capacity of 225,000
tpm.



Revised Mineral Resource and Ore Reserve estimation



Snowden Mining Consultants ("Snowden") has been retained by CAG in an advisory
capacity for mineral resource estimation procedures. Ukwazi Mining Solutions ("
Ukwazi") has been retained to advise on mine planning, stope design and
scheduling at Bibiani. The current JORC compliant Ore Reserve statement
undertaken by CAG, has been signed off by CAG's Competent person, Phil Bentley,
and Ukwazi. This estimate follows on from previous critiques on the estimates
(February 2007, September 2007) undertaken by Ukwazi/Snowden/CAG.



The Ore Reserve estimate is stated at a gold price of US$ 750/oz, and an in situ
paylimit of 2.10g/t Au. Stopes have been designed based on a 2 g/t Au cut-off.




Underground Mineral Resources and Ore Reserves


The Ore Reserve estimate is based on a continued refinement of first principles
geological modelling and mineral resource estimation on the main Bibiani
orebody, coupled with detailed mine planning and scheduling. The mineral
resource estimation within the stope outlines has been refined to 7.5m x 7.5m x
3m blocks within five geological domains. Modelling of the geological zones was
achieved by sectional digitising of geological units and alteration zones,
especially silicification, brecciation and sulphidation, as well as discrete
structural parameters that impact on the geometry of mineralisation.  Gold
grades for the reported underground resource model have been determined using
Ordinary Kriging ("OK") with grades interpolated into the parent blocks. The
gold content estimation was constrained within a stope outline wireframe at a 2g
/t Au cut-off. Modifying factors applicable to the long-hole open stoping mining
method have been developed by Ukwazi, and have been applied to converting stope
outlined resources to Ore Reserves.


BIBIANI UNDERGROUND

MINERAL RESOURCES

Measured                          Kt     Au g/t    Au Koz

Ug - Bibiani (1.25g/t co)        12,838   2.71        1,119
Subtotal                         12,838   2.71        1,119

Indicated

Ug - Bibiani (1.25g/t co)        13,431   2.51        1,084
Subtotal                         13,431   2.51        1,084

TOTAL M & I                      26,269   2.61        2,203

Inferred

Ug - Bibiani (1.25g/t co)        12,416   2.18          869
Subtotal                         12,416   2.18          869

TOTAL UG RESOURCES               38,685   2.47        3,072



The Proven and Probable Ore Reserve estimates within each stope have been
generated by modifying the relevant in-stope Mineral Resources. These were
classified according to the distribution of sampling in the OK neighbourhood,
utilising a combination of the normalised variance, sample density and spatial
continuity (more than 92.5% confidence Measured, 70-92.5% confidence Indicated,
less than 70% confidence Inferred). The long-hole open stoping mining method
also impacts on certain less than 2g/t Au blocks being caught up in the mining
as internal dilution. This classification scheme takes into account the
uncertainty in the estimates related to the proximity and distribution of the
informing composites.



Coning levels are planned on 9L (approximately 270m below surface) and 13L
(390m), from which ore will be delivered to an underground crushing station on
14L (420m). The domained estimation is constrained to 13L and above, reflecting
the current extent of mine planning and scheduled extraction of ore. Proven
Reserves are restricted to 9L and above, where current infrastructure is in
place. Below 9L to 13L, all measured and indicated resources are modified to
Probable Reserves.



The conversion to Ore Reserves was undertaken at a 2.10g/t Au stope cut-off
grade. Each stope has been fully diluted, comprising internal dilution (0-1.5 g/
t Au Measured and Indicated blocks), and a provision for overbreak dilution at
10% of tonnage at a grade of 0.82 g/t Au (the average 0-1.5g/t in stope block
grade). The diluted stope was further modified for mining losses (5%) and a Mine
Call Factor of 95% (applied as gold loss from stope to ROM pad).



Ore Reserve tonnage and grade estimates have been made both with and without
modifications for pillars. Ukwazi has completed an audit of the Ore Reserve
estimation, and in particular a more detailed analysis of appropriate pillar
modifying factors applicable to the current long-hole open stoping mining method
and related ground stability issues. Of relevance is that CAG only plans to
introduce backfill into stopes extracted below 9L. Ukwazi have thus provided an
estimate of the Ore Reserves extractable under certain pillar modification
factors applicable at the moment, pillar modification is overall a 24% reduction
in tonnage, with rib and breast pillars factored at 14% by volume, with zero
extraction. Coning pillars on 9L and 13L are factored 25% by volume, with an
extraction of 75% during life of mine operations. Provision has been made for a
30m thick crown pillars on 10L  and 6L (under the existing openpit), and
contains 42,330 oz. Allowance has been made for 50% extraction of these during
the course of the  life of mine.


BIBIANI UNDERGROUND ORE RESERVES
Fully diluted not modified for pillars
Proven                                     Kt         Au g/t      Au Koz

Ug - Bibiani (paylimit 2.10 g/t)           4,142      3.20        426
Subtotal                                   4,142      3.20        426
Probable

Ug - Bibiani (paylimit 2.10 g/t)           9,703      3.06        956
Subtotal                                   9,703      3.06        956

TOTAL RESERVES                             13,846     3.10        1,382

Modified in stope resources (PL 2.10 g/t)  13,846     3.10        1,382
Modified in stope resources (>= 2.50 g/t)  9,764      3.45        1,082
Modified in stope resources (>= 3.00 g/t)  5,974      3.88        746

Fully diluted modified for partial pillar extraction
Proven                                         Kt       Au g/t      Au Koz

Ug - Bibiani (paylimit 2.10 g/t)                3,502    3.16             355
Subtotal                                        3,502    3.16             355

Probable

Ug - Bibiani (paylimit 2.10 g/t)                7,250    3.09             721
Subtotal                                        7,250    3.09             721
TOTAL RESERVES                                 10,752    3.11           1,076

Pillars                                         3,319    2.87             306



Modified stope resources at stope cut-off grades of 2.50 and 3.00 g/t Au
respectively are also shown above to give an indication of the grade profile of
the deposit. On a similar pillar / support basis, but higher stope grade cutoff,
  the Ore Reserve estimate fully diluted and modified for partial pillar
extraction as at September 2007 was 7.52 Mt @ 3.55 g/t Au for 858 koz Au.


Total UNERGROUND Ore Reserves September 2007

Stopes fully diluted and modified to include pillars
Proven                               Kt      Au g/t      Au Koz

Ug - Bibiani (3.0 g/t stope co)      2,755        3.45         305
Subtotal                             2,755        3.45         305

Probable
Ug - Bibiani (3.0 g/t stope co)      4,763        3.61         552
Subtotal                             4,763        3.61         552

TOTAL RESERVES                       7,518        3.55         858



The improved underground Ore Reserve estimate of 1.38Moz Au represents a 31%
increase on those stated in September 2007 (1.05Moz). The reserve estimate is
fully modified to include dilution, mining losses, and is stated against a
paylimit of 2.10 g/t Au (inclusive of fixed and variable mining costs,
metallurgical recovery, royalties and sustaining capital).



The Ore Reserve estimates were undertaken internally by CAG's Dale Richards,
Frans Dooge and Phil Bentley (all SACNASP affiliated), who between them have
more than 70 years' combined experience in the geological modelling of orebodies
and the use of geostatistics for the estimation of recoverable resources in gold
deposits. For the purpose of reporting under the JORC code, Phil Bentley, CAG
Group Manager - Geology and Exploration, is the Competent Person.

                                  * * ENDS * *


For further information please contact or visit www.centralafricangold.com or
contact:



Central African Gold Plc

Greg Hunter                              Tel: +27 (0)82 882 4222


In London:

St Brides Media & Finance Ltd

Hugo de Salis/ Felicity Edwards          Tel: +44 (0)20 7242 4477


Strand Partners Limited

Simon Raggett  /Braden Saunders          Tel: +44 (0)20 7409 3494


In South Africa:

Central African Gold

Nicole Broome                            Tel: +27 11 676 2500
                                         Mob: +27 83 601 1702


Russell and Associates

Charmane Russell                         Tel: + 27 11 880 3924
                                         Mob: + 27 82 372 5816


Notes to Editors:

Central African Gold Plc, admitted to AIM in April 2004, was established to
acquire gold assets with a geographical focus on Africa. The Company has
established a sound portfolio with projects in Ghana, Mali, Zimbabwe and
Botswana. It has a highly experienced management team, which has worked together
for four years managing six underground greenstone gold mining operations and
building exploration portfolios.



CAG's portfolio includes the developing of Bibiani gold mine and two prospecting
licences in Ghana, which it acquired from AngloGold Ashanti Limited, two
ventures in Mali covering 17 prospective permits and a licence in Botswana
covering the extension of the Kraaipan greenstone belt from South Africa. CAG
acquired five mines and extensive exploration properties in Zimbabwe during
2007. The management team is evaluating additional prospects in Africa to
establish CAG as a leading mid-tier African gold producer with world class
exploration and production assets.



                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

DRLIIFSAVTILVIT

Central African Gold (LSE:CAN)
Historical Stock Chart
From Jun 2024 to Jul 2024

Central African Gold (LSE:CAN)
Historical Stock Chart
From Jul 2023 to Jul 2024