TORONTO, ONTARIO--(Marketwire - Nov 5, 2012) - African Gold Group, Inc., ("AGG" or the "Company") (TSX VENTURE:AGG) is pleased to announce that Pope & Company, based in Toronto, Canada has initiated research coverage on African Gold Group, Inc. with a speculative buy recommendation and a target price of $0.84/share.
Pope & Company''s initiating research report on AGG states:
"African Gold is developing the Kobada property which has a 218.5 sq km concession in the prolific gold producing area of south-west Mali. We recommend African Gold based on the following:
- Near Term Producer-AGG has the potential to begin production in 2015, and to ramp up production to 126,000 oz Au annually by 2017.
- Significant Increase In Oxide Resource Expected-Based on pre-2011 drilling, the Resource at Kobada is over 1 M oz Au of which more than 95% is in highly oxidized rock. In Q4/12, the Company plans a Resource update which will include 49,000 m of drilling completed since 2010. We believe this drilling will increase the Resource at Kobada by 65%. Longer term, there is potential to find significantly more gold at Kobada and in the surrounding area, providing the drilling is undertaken.
- Gold Grade Upside-The gold at the Kobada deposit is coarse and nuggety, which means the contained gold content is often under estimated. The development of Kobada is based on processing the oxide gold ores in a Gravity Processing Plant (GPP) similar to the one which was recently put in operation at Wassoul''Or''s Kodieran Mine also in Mali. Reports from Kodieran indicate that gold grade in ore processed is higher than estimated.
- Potential Sulfide Resource-Kobada has potential for a large gold sulfide Resource below the oxide layer. The Company has intersected gold in sulfides below the oxide Resource in many areas, but the drill density has not been sufficient to define a Resource.
- Exploration Upside-Besides Kobada, African Gold has a number of exploration targets (Gossokorodji, Diaban, Foroko North). Ultimately, we expect the total gold Resource, including Kobada, to exceed 5 M oz Au.
- Good Team-The Company has worked in Mali for many years and has personnel with experience in the development of other gold mines in Mali. The Company''s management has a proven track record in the capital markets and in mining in West Africa.
- Good Jurisdiction-Mali is a good jurisdiction in which to develop new mines. The geology is excellent and the domestic workforce is inexpensive. The oxide deposits are near surface with good metallurgy and can be mined for the most part at a low strip ratio. In addition, the country allows permitting prior to the completion of a Feasibility Study.
Valuation and Recommendation
Our target represents a 223% upside to the current price of $0.26/share. We suggest that as African Gold proceeds to production, defines more resources and makes plans to recover gold from sulphide, we will see further upside to the stock. We therefore recommend purchase of AGG."
Please activate the below link to view the complete report authored by Pope & Company initiating coverage of AGG: http://media3.marketwire.com/docs/PopeResearch_AfricanGoldGroupNov2012.pdf.
African Gold Group, Inc., based in Toronto, Canada, is fully focused on transitioning from an exploration / development company into a gold producer. In conjunction with this objective, a full Feasibility Study is currently underway at AGG''s Kobada, Mali gold project. The Company is projecting the Feasibility Study will be completed in Q2/2013, at which time, the Company will submit an application to obtain an Exploitation License to the appropriate Malian authorities.
Additional Information is available on the Company''s website at www.africangoldgroup.com and on www.sedar.com and through the Company''s offices at: Sun Life Financial Tower, Suite 2518, 150 King St. West, Toronto, Canada M5H 1J9.
On Behalf of the Board:
Michael A. J. Nikiforuk, President, Director