Encouraging shallow gold intersections recorded at PMI Gold’s Afiefiso Prospect, Ghana

• Drilling completed and all assay results received from first pass Aircore exploration drilling undertaken by PMI at the Afiefiso Prospect, located 12km south-west of the Obotan Gold Project.
• Shallow mineralization intersected over previously defined gold in soil anomaly.
• Afiefiso lies within the Asankrangwa Gold Belt and located near the junction of the prospective Fromenda Shear with favourable east-northeast trending cross-cutting structures.
• Aircore drilling program represents first exploration campaign by PMI at Afiefiso.
• Encouraging results include

• 16m @ 1.73 g/t Au from 11m (including 3m @ 7.58 g/t Au from 19m)
• 15m @ 1.16 g/t Au from 48m (including 2m @ 4.99 g/t Au from 48m)
• 3m @ 13.64 g/t Au from 12m (including 1m @ 40.57 g/t Au from 12m)

PMI Gold Corporation (TSX-V: PMV) (ASX: PVM) is pleased to announce drilling has been completed and all assay results returned from its first pass Aircore exploration drilling program at the Afiefiso Prospect (Figure 1), a high priority target identified and tested in the Company’s +100,000m regional exploration push undertaken during  the half year to June 2012.

The Afiefiso Prospect is a new discovery strategically located within a 15km area of influence south-west of the Company’s flagship Obotan Gold Project in south-west Ghana. (NI43-101 and JORC Code compliant Mineral Resource estimate of Measured Resources of 15.57M tonnes at a grade of 2.47g/t for 1.23Moz, Indicated Resources of 29.21M tonnes at a grade of 2.00g/t for 1.88Moz and Inferred Resources of 21.91M tonnes at a grade of 1.99g/t for 1.40Moz; Figure 1.)

Drilling was designed as a first-pass test of a strong (>100ppb) gold in soil geochemical anomaly, defined by previous explorers, which extends over a length of 2km striking north-east and is 200-500m wide. The soil anomaly is situated in a similar geological setting to the Obotan gold deposits, at the junction of the regional, north-east trending Fromenda Shear and interpreted east-northeasterly cross-cutting structures within a sequence of meta-sedimentary rocks. The program comprised broadly spaced reconnaissance Aircore traverses (145 holes on four traverses at 200-800m intervals; Figure 2) which commenced in March 2012. A total of 10,018m has been drilled into the prospect.

The prospective north-east trending Fromenda Shear is interpreted from geophysical data to form the eastern margin of a regional structural corridor which extends over the 70km strike extent of PMI’s Asankrangwa tenements. The corridor comprises a parallel series of at least three continuous shear zones (Abore, Nkran and Fromenda) interpreted to control the regional distribution of gold mineralization, particularly at intersections with cross-cutting east-northeasterly structures, similar to the interpreted overall structural setting of PMI’s Obotan deposits to the north. At Obotan, the Company’s tenements mainly cover the Nkran and Abore shears which are interpreted to control the Nkran, Abore, Asuadai and Adubiaso deposits to the west of the lesser explored Fromenda Shear.

Regionally, gold mineralisation was intersected in drilling during the 1990’s by a range of companies along the entire strike extent of all north-east trending structures comprising the corridor, and now consolidated for the first time as a single project owned by PMI Gold (Figure 1). Based on the historical exploration results, prospects along the Fromenda Shear are considered by PMI to represent high priority exploration targets.

The recent reconnaissance aircore drilling program carried out at Afiefiso prospect intersected multiple zones of anomalous gold at shallow depths (<100m), striking parallel to the Fromenda Shear over a length of up to 1,600m and downhole widths of2-12m (Figure 2). All assay results have been received for the 145 holes from MinAnalytical Laboratory in Perth, Australia. Table 1 lists all anomalous intersections >0.1g/t Au.  Encouraging shallow gold intersections recorded include:

• AFAC12-001 16m @ 1.73 g/t Au from 11m (including 3m @ 7.58 g/t Au from 19m)
• AFAC12-003 6m @ 0.72 g/t Au from 21m
• AFAC12-011 15m @ 1.16 g/t Au from 44m (including 2m @ 4.99 g/t Au from 48m)
• AFAC12-016 9m @ 0.97 g/t Au from 49m (including 2m @ 2.76 g/t Au from 50m)
• AFAC12-073 3m @ 13.64 g/t Au from 12m (including 1m @ 40.57 g/t Au from 12m)

Along with earlier announced drilling results from the Fromenda Prospect (refer to Announcement dated April 30, 2012), the recent results from Afiefiso further highlight the potential of the Fromenda Shear to host gold mineralization, and the success of utilising the historical soil geochemical data notwithstanding the obscuring effects of alluvial and cultural processes.

PMI Gold’s Managing Director and CEO, Mr Collin Ellison, said the results from the first pass exploration drilling at Afiefiso has identified further shallow encouraging gold values, highlighting the potential to discover satellite sources of oxide mineralisation within economic haulage distance to the proposed processing facility at Nkran to supplement mill feed from the four main Obotan deposits (Nkran, Asuadai, Adubiaso and Abore).

“Our extensive regional exploration push has involved drilling nearly 86,000m for the first half of 2012 at the Obotan, Asanko and Kubi Projects. Early results from Kaniago, Fromenda and Afiefiso within the Obotan Area of Influence, and the 513 Prospect at the Kubi Project have identified some significant and encouraging gold zones. Further assay results are still outstanding from drilling which has been completed at the Kubi Gold Project and at the Diaso Prospect, another high priority target within the Asanko Project. We expect to receive these results in the coming weeks and prioritise the prospects for further follow up drilling for the second half of 2012.”

Doing Business in Africa with SIGAC

Our service oriented company SIGAC Ltd is based in West Africa (Senegal, Guinea, Gambia) in the mining sector and is looking for a financal partner and others to develop business in West Africa.

SIGAC has concluded also allready a partnership with other companies like Devmine Ltd, working in the small-scale mining sector in Central Africa.

To develop our business interests in the West African mining sector, and to implement the objectives set up in our business plan, we are looking for funding from interested investor worldwide. It could be a combination of debt and equity. 

We have at disposal for you a detailled Business plan and an executive summary.

Harry Louiserre

CEO SIGAC ltd

Skype: louiserre1

Tel. (Europe/France): 00 33 6 47 56 09 65 

Tel. (Afrique/Senegal): 00221 771079806

www.sigac-sarl.com

Open letter to Minister Susan Shabangu

Honourable Minister Susan Shabangu, MP
Ministry of Mineral Resources
Private Bag X59
Pretoria
0001

Tel: 012 444 3999 / 021 462 2310
Fax: 012 444 3145 / 021 461 0859

Dear Minister, 

Following my various correspondence to you on similar matters I write in emphasis thereof.

Much of the challenges afflicting the South African platinum (PGM) mining sectors are structural and global by nature.

As an explorer our woes are even greater than those of the producers as we had no ability to bank any rainy day income to shore up this devastating time.
Many of the explorers are not going to meet targeted exploration due to limited or non-availability of market to fund these prospects as a result at first the 2008 global economic crisis and now recently the platinum misread fundamentals.

Whilst in the past, a higher price was achieved for our country’s precious metals; in today’s global market the cyclicality of the commodities markets and volatility of foreign currencies have confluence to make our industry’s long term future look rather bleak. Unless urgent and material remedial actions are taken by both government and private sector, in particular the investment and financial service industry, high value down-stream manufactures within industrial sectors such as the automotive industry, jewellery and others will suffer as well, and the mining of this precious resource will diminish overtime with the result that due benefits for the country and its people will not be achieved maximally.

Our sector, the junior sector, employs hundreds and feeds into the employment of many thousands in the fields of exploration drilling labour and professional expertise. Importantly, the junior sector attracts foreign direct investment in billions of rand.

The government and in particular your department would need to lead the way forward by introducing a greater number of constructive interventions, where government induction of beneficial legislative framework would result in greater ore extraction and the protection of value for the investors and entrepreneurs who are at the “coal face” of challenging realities affecting their mining of platinum and PGMs.

The call for such interventions are not designed to give the sector an undue protection, nor to artificially sustain an unviable industry, but rather to nurture and protect an industry in its adolescence and ensure that it becomes a viable and sustainable industry sector that can hold its own in an uncertain world affected by socio-political and economic vagaries.

It is not suggested to bring about changes that would result in any confrontation with other countries, nor which would cause South Africa to renege or transgress bilateral and multilateral agreements, but rather use internal structures and resources available to the state and its organs to bring about a measure of stability through using and or introducing a set of  tools and products which would ultimately reduce the volatility of this sought after metal and successfully maintain this for the long term. 

In the main, interventions that can improve the value retained (profits) by both miners of platinum and PGMs, as well downstream value-add manufactures would be the ones with the highest priority for deployment.
South Africa’s already fragile platinum and PGM mining sector could be further damaged should proposals contained in a report commissioned by the African National Congress (ANC) into the state’s role in the minerals sector take effect and many of my peers and myself believe that we need an urgent mining Indaba to deal with the sector’s woes and to produce the required remedial government interventions.

State Intervention in the Minerals Sector (Sims) report suggests export tariffs on platinum sales — except where trade agreements prevent this — capping the price at which the metal may be sold to domestic users, that the metal be subject to exchange controls as gold is, and that SA use its position as the world’s dominant supplier to negotiate supply and beneficiation deals with customers.

This letter is to request your government to take immediate steps towards addressing new initiatives to spur the platinum sector on and to suggest a few remedies. 

Thus the following are some suggestions I would like to propose for your ministry to take under consideration and possible action. 

1.     The major issue in investment is security of tenure, with no funding in the market; it will go a long way if Government could immediately announce that junior explorers with prospecting rights will be receiving further security of tenure to encourage investment in the sector.

1.1     Extending the mining and prospecting rights across the board for all companies in the platinum sector in particular those rights due for renewal within 24 months. This will remove investor jitters and secure the long term investment nature of mining as an investment class. The minister could do this in terms of her powers.

2.      When gold went through similar woes in the 1960’s, to help market it a Kruger Rand was minted in 1967. This went a long way in firming up gold as an investment storer and a coin of choice for collectors. By 1980, the Kruger Rand accounted for about 80% of all gold mined for coining. We can replicate this with even a Greater man.

2.1     Introducing a Mandela Rand (like the Kruger coin) for platinum to push long term demand for the metal as a wealth store and safe haven, and let them coincide with the Mandela bank notes. If the Kruger Rand did magic during the gold slump only a less imaginative mind will fail to see the Mandela Rand doing triple that.

The Mandela Rand - Platinum

3.    The Reserve Bank of South Africa has an official policy on gold and foreign exchange holding and management. These range from covering foreign debt to maintaining confidence in countries monetary systems. The industry together with yourself agree that platinum is highly strategic going forward and it is finite and largely located in our land yet highly needed by the industrial sector and other sectors globally.

With their longer term fundamentals and the constant worry of gold overheating it cannot be farfetched for me to think platinum could help maintain the bank’s safety on a longer term basis.

Since 1925, the bank has held gold. Times have changed and continue to change. Do we also hold Euros? What about platinum?

    The bank’s market department ought to be required to analyse and come up with a study to look into the effects short and long range of the bank starting to hold platinum refined troy ounces and how this could impact the market.  The confidence South Africa shows in the metal and how this could be exported as an idea to BRICS so their own Reserve Banks consider this diversification. 

   South Africa economy requires we make platinum a hero at home first before anyone else could take it that serious in long range goals.

3.1    Propose that the Reserve Bank of South Africa considers including platinum in its     reserves diversity. The Reserve Bank should buy at least 1m/oz in tranches over the next     three years to add to the 4m/oz gold the bank currently holds.  An announcement alone     will push the price to levels capable of generating immediate (25 000) jobs based on     projects that could come to stream in platinum sector mining and not the auxiliary sector     that support this.
4.     Much discussion is being made about controlling the metals sold and produced. Whilst doing     this unilaterally could be negative for global trade agreements and illegal at some cases, a     coordinated format with other world producers could be the best way of dealing with the     matter going forward.

4.1     Consider an OPEC like organisation for platinum and PGM producing countries as it is finite and rare. The investment sector needs to be protecting, including proper production planning and research.

5.     There is no formal coordination between the industry and government SOE dealing in minerals development and research.

5.1    Establish a platinum marketing council to promote platinum’s long term business fundamentals and scientific research.

6.    Empower the Minister with funding of junior explorers who will not have access to funding     under current market conditions. The Minister of Finance should make significant appropriation of funding to shore up the Junior Explorers with great urgency. All exploration has about stalled and the industry held back for another 10 year delay since the 2008 financial crisis. A mine takes 10 years to develop from exploration to mining, the rights period does not take this into full account and the bad market conditions calls upon government to respond as a friend not a foe to this flangling sector.

EXPLORATION IS CRITICAL RESEARCH & DEVELOPMENT and as such should be able to attract the similar grants available to R&D projects. In many cases what we observe and report are sciences and we even develop own technics and technologies on the job to do our work even better. All the data we extract ends up belonging to the State via the Council for Geosciences.

This sector of the brave is dying if not already dead. South Africa anticipated 5 listings on the JSE this year and none have occurred or likely to occur if the status quo remains unmitigated by your good office on an urgent basis.
Whilst other countries have various means to attract domestic investment in explorers South Africa has almost none and this leaves the sector highly vulnerable to lack of success and foreign buyouts.

The sector has to be talked up not down, references to increased taxation on the sector; mining sector already bears the brunt of several taxes, including royalties. There is no need to curtail explorers trading by imposing higher taxes, at times these trades are done at no cash benefit but buying of exploration debt in return for equity participation.

Exploration dollars are still shying away from South Africa in a greater extent.

Global Nonferrous Exploration Budgets by Region, 2011

7.    Platinum exchange platform needs to be established in South Africa and all PGM trading be moved back to South Africa to bolster foreign exchange and better management of the metal market closer to source. Similar exchanges have been seen in China for its wide rare earths sector. An Act of Parliament will have to be urgently drafted to disallow trade from being done outside South Africa. This will not only likely boost the foreign currency inflows but will boost industry and introduce South Africa as a world class economy it is and skills economy.

What is critical in thought and planning is the fact that platinum is finite and close to 80% of it is here in South Africa. It is a critical resource for South Africa. The RSA currently produces about 80% of the world’s platinum, which should mean it is the most obvious industry in which the country can claim a natural competitive advantage, not only in mining but in a host of downstream applications.

Honourable Minister, your urgent attention to these very serious matters is requested. Perhaps establish a committee to look at these matters closer and report back to you for budget consideration purposes.

Sincerely

Mr Bongani Mbindwane

CEO

Platfields Limited

info@platfields.co.za

twitter @mbindwane

Contact: suza.adam@madiniafrica.com