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Exploration Results : Summary

We have been working on the Obuasi Property since its acquisition in spring 2006, but it was only in late 2008 that we obtained sufficient information to conduct extensive drilling on the Main Obuasi Trend (approximately 11,000 metres of which have been completed to date). Our exploration on the property to date includes:
  • 2,038 metres of drilling in 2007;
  • 6,965 metres of drilling in 2008;
  • 9,160 metres of drilling during our drill program in late 2009 and early 2010;
  • bulk leach extractable gold (BLEG) geochemical surveying throughout the property;
  • mobile metal ion (MMI) geochemical surveying on the Main Obuasi Trend and elsewhere on the property;
  • versatile time electromagnetic (VTEM) airborne geophysical surveying in 2007 and 2009; and
  • mapping and prospecting.
We are currently conducting a 5,000+ metre drilling program on a series of targets on the Main Obuasi Mine Trend and on a number of secondary significant targets:

The primary goal of our exploration on the property is to locate Obuasi Mine-style ore shoots within our property boundary.

These ore shoots measure approximately 80-200 metres in strike length and 3-20 metres in width. Although their surface expression is narrow, the gold mineralization in ore shoots at Obuasi is very continuous and they plunge in excess of 2,500 metres to depths in excess of 1,500 metres. The ore shoots are hosted in graphitic shear zones and are spatially associated with a mafic volcanic package, generally occurring within 400 metres northwest of the package.

We have used the VTEM surveys as a structural mapping tool to trace the fault structures at the Mine through at least approximately 15 kilometres of our property. Additionally, through prospecting and drilling, we have traced the mafic package through the western portion of our property. The faults and mafic package are important structural indicators of potential gold mineralization and have been used in conjunction with geochemical surveying to locate prospective drill targets.

Our 2009/2010 drilling program (32 holes totaling 9,160 metres) provided significant geological data necessary to mount this year's ongoing drill program as it:
  • encountered the graphitic structures (including the Obuasi and Cote D'Or fissures) and mafic contact associated with gold mineralization at the Obuasi mine (key features for orienting future drill programs);
  • intersected broad zones of alteration at most targets, including significant sericitization and anomalous gold mineralized widths at the Big Vein prospect;
  • confirmed gold mineralization along the Main Obuasi Mine Trend on the Obuasi Property;
  • confirmed Mount Kate, Big Vein, Tikal, and NT 1 as targets meriting significant additional drilling.
Our 2011 drilling program is primarily focused on the targets described below.

Main Obuasi Mine Trend

The Company conducted a regional MMI survey along the south central section of the Main Obuasi Trend, which identified large anomalies running northeast in excess of 2.5 kilometres along strike. These anomalies coincided with the results of the VTEM survey, with the strongest MMI survey signatures coinciding with the most highly conductive zones identified in the VTEM survey. Work in this area will focus on tracing the geometry and extent of the mafic volcanic horizon through prospecting and detailed mapping of the area. The mafic volcanic horizon is correlative with the footwall to the main ore zones at the Obuasi mine, and is in the hanging wall of the Gyabunsu Trend mineralization at Obuasi.

The Bura/Tikal to Ayaase Corridor

During late 2010 we identified a geochemical trend stretching from the Tikal and Bura target areas to the Ayaase target.

Both Bura and Ayaase are newly identified targets identified through structural indicators, prospecting, geochemical sampling and trenching.

Ayaase Area

Ayaase is a priority drill target for the ongoing program. The area is less hilly than other areas of the Main Obuasi Mine Trend and generally is less affected by overburden. Geochemical surveying therefore appears to work more effectively in the area. Significantly, we have identified concurrent gold and arsenic anomalies. The correlated presence of arsenic, which is associated with high-grade zones at the neigbouring Obuasi Mine, but is far more mobile than gold, suggest that the indicated gold mineralization may be in situ. Trenching has confirmed the presence of gold mineralization in bedrock in the area (including 2.70 g/t gold over 13 metres), which is currently being drill tested.

Bura Area

The Bura area was identified from outcrop carrying significant grades up to 20.5 g/t gold in late 2010. We followed up these prospecting results with trenching that included results of 0.5 g/t gold over 33 metres.

Tikal Area

The Tikal showing was identified during the Company's 2009 prospecting program, which located outcrops grading up to 3.4 g/t Au in the area. Drilling during 2009 encountered a 0.8 metre white pyritic quartz vein containing a fleck of visible gold and surrounded by approximately 6.0 metres of strong alteration at 108 to 115 metres.

A second hole drilled in 2009 appears to have hit the periphery of this zone of alteration at a depth of 186 metres.

A further three holes were drilled in the area in early 2010. PG09-TK-02, a 100 metre step-out hole to the northeast, intersected the same style of alteration as in hole PG09-TK-01 and intercepted 1.4 g/t gold over 3.0 metres. Drill hole PG09-TK-04, 100 metres along strike to the southwest, intersected the structure, but with very little alteration. The drilling completed to date at Tikal, suggests a shallow northeast plunging zone of mineralization, which remains open to depth.

Mount Kate Area

Pelangio drilled two holes at Mount Kate in the first quarter of 2008 based on encouraging trenching and MMI results. The drilling intersected near-surface mineralization, the best results of which were in holes AMK-08-01, which intersected 1.57 g/t gold over 1.0 metre, within a wider intercept of 0.3 g/t gold over 17.0 metres, and AMK-08-02, which intersected 1.24 g/t gold over 4.0 metres within a wider zone of 0.78 g/t gold over 9.0 metres. Significantly, both of these holes intersected structurally controlled mineralization at the fault contact between argillaceous sediments and mafic volcanics, which is a typical setting for mineralization at Obuasi.

During 2009, the Company commenced a program to drill beneath and along strike from mineralization at Mount Kate with an emphasis on testing mineralization below the weathered horizon, as the deep weathering at the target may have resulted in near-surface gold depletion. The initial drilling in the 2009 program at Mount Kate encountered multiple zones of strong alteration and quartz veining. PG09-MK-01 and PG09-MK-03 intercepted sulfide mineralized veins of 5.0 metres and 8.0 metres, respectively, surrounded by strong carbonate-pyrite altered graphitic shales.

During early 2010, a further four holes were drilled totaling 1,230 metres. These holes were designed to test the northern half of the MMI anomaly in the area and similarly to follow up on structural and geological targets intercepted during the 2008 drilling program. The best results were encountered in drill hole PG10-MK-04, which intersected 1.33 g/t gold over 2.0 metres, within a broader intercept of 0.49 g/t gold over 7.0 metres in a broad package of alteration. The mineralization is located at the contact between graphitic, sheared sediments and altered mafic volcanics, which is typical of the geological setting of the gold mineralization in the Obuasi mine.

Drilling on the prospect to date has also defined that the Cote D'Or structure, one of the two major faults hosting mineralization at the Obuasi mine, has an orientation of azimuth 20°/60°NW in the area. The Company is using this information to orient the ongoing drill program in relation to historical information on the Obuasi mine.

Big Vein Area

Big Vein is located near the western property boundary and 900 metres north of the Mount Kate prospect. Two holes were drilled on the prospect from the same collar at -50° and -75 dips. We have interpreted that these holes intersected the Obuasi fissure, which is identified by steep north-dipping mafic slivers in a broad argillite-hosted shear zone. Both drill holes displayed strong sericite-pyrite alteration in mafic volcanic rock. PG09-BV-02 contained a wide zone of anomalous gold averaging 0.34 g/t gold 22 metres in sheared argillite in the immediate hanging wall of the mafic horizon.

Gyabunsu Trend

The Company has discovered a number of anomalies along the Gyabunsu Trend, the most significant being the New Trench 1 ("NT 1"), Government Area and Mampamphwe targets. The southern part of the trend was included in the VTEM survey, which has provided the Company with further insight into the nature of the targets on the trend, particularly around NT1, Government Area and Mampamphwe.

NT1 Target

During the 2007 exploration program, Pelangio completed three drill holes at the NT 1 area located on the Gyabunsu trend. Gold mineralization is associated with silicified and veined Tarkwaian sandstones above the Birimian argillites. The 2007 holes, drilled on 25 metres intervals, tested the anomalous trench results obtained in NT 1 and Randgold Trench 10. Hole PG07NT1-3 intersected 1.10 g/t gold over 13.95 metres under three metres of overburden.

During the 2010 program, the Company drilled three holes from north to south at 100 metre spacing in an east-west direction stepped 90 metres behind PG07-NT1-3. The best results were obtained in drill hole PG10-NT1-81, the easternmost hole, which cut a 78 metre interval grading 0.26 g/t gold, including three intersections grading in excess of 1.0 g/t gold. Anomalous gold mineralization was intersected in Upper Birimian quartzite, immediately south of a regional fault contact between the quartzite and Lower Birimian argillites.

Government Area

The Government Area target is located along strike to the east of NT1. Encouraging geophysical and geochemical results were followed up with trenching which encountered 1.03 g/t gold over 21 metres, including two one metre intervals of 10.80 g/t gold and 8.20 g/t gold. We have planned and completed drilling at this target, with assays pending.

Mampamphwe (Mount Kate South) Target

During 2008, an old adit was identified in Mampamphwe, north of NT1 and Government Area. According to local inhabitants, this adit was previously mined before being abandoned. During 2011, we received results of soil sampling from the target on a 100 x 50 metre grid. The results included 12 samples from the adit area. A number of encouraging assays results were received grading between just under 1 g/t gold up to as high as 52.5 g/t gold. We commenced a trenching program in the area to follow up on these results and are currently drilling the target, with assays pending.

Kusa Centracor Target

The Kusa Centracor target is located 6.3 kilometres east of Trench 15 at Abomposo. The anomalous gold zone was defined over a strike length of 250 metres by trenching and seven holes drilled by Centracor Mining Ltd in 1993. Six drill holes were completed over a strike length of 125 metres, within 120 metres west of the past drilling area.

The mineralized zone lies within a sheared silicified and pyritic felsic intrusive with 1-5% pyrite in contact with graphitic phyllites to the south. The best gold intercepts were in holes PG07-KU-1 and PG07-KU-4, which assayed 1.08 g/t gold over 12.0 metres and 1.29 g/t gold over 12.0 metres, respectively, both within the intrusive rocks and 80 metres apart.