Positive drilling results pave way for resource upgrade at Obotan Gold Project

/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES/

TSX Venture Exchange: PMV
Australian Securities Exchange: PVM
Frankfurt: PN3N.F

Highlights

  • Positive drilling results from resource extension and in-fill drilling at the key Nkran deposit at PMI's flagship Obotan Gold Project in Ghana
  • Broad intersections from the latest seven diamond holes including1:
  • 125m @ 2.18g/t Au from 271m, including:
    • 8.0m @ 19.01g/t Au from 271m
    • 18.0m @ 3.12g/t Au from 346m
  • 118m @ 2.43g/t Au from 386m, including:
    • 23.0m @ 3.66g/t Au from 405m
    • 16.0m @ 2.91g/t Au from 488m
  • 52m @ 3.37g/t Au from 201m, including:
    • 9.0m @ 4.36g/t Au from 201m
    • 16.0m @ 7.74g/t Au from 214m
  • 18.7m @ 2.33g/t Au from 280m, including:
    • 7.0m @ 5.51g/t Au from 280m
  • Broad widths of high-grade gold mineralisation intersected within approximately 150m below the base of the previously mined Nkran open pit
  • 24,000m completed of a 40,000m extensional and in-fill drilling programme at Obotan
  • Three drill rigs currently operating at Obotan

VANCOUVER, May 24, 2011 /CNW/ - PMI Gold Corporation (TSXV: PMV) (ASX: PVM) is pleased to report positive drilling results from its Obotan Gold Project in Ghana which will help underpin a resource upgrade in the September Quarter of 2011 and subsequent completion of the pre-feasibility study.

The results stem from the latest seven holes drilled at the key Nkran deposit at Obotan and come from a depth of up to 150m below the existing open pit.

They strongly support PMI's goal of delineating an Indicated Resource down to approximately 350m below the surface. This is 200m below the historical Resolute Resources pit, which produced approximately 590,000oz to a vertical depth of 150m below the surface.

The results suggest that the internal integrity of the deposit continues down dip. Broad spaced drilling below 350m indicates that the deposit continues to extend below circa 450m, the level tested by the deepest holes completed to date.

The drilling is focused on delineating all potential open pit resources and ultimately to determine the potential for continued mining down the plunge of the deposit.

Better intercepts from these seven holes are summarized below. A full list of intersections from the seven holes is provided in Table 1:

  • NKR11-036: 125.0m @ 2.18g/t Au from 271m
                    Including:   8.0m @ 19.01g/t Au from 271m
                      18.0m @ 3.12g/t Au from 346m
  • NKR11-038: 118.0m @ 2.43g/t Au from 386m
                    Including:  4.0m @ 9.82g/t Au from 394m
                      23.0m @ 3.66g/t Au from 405m
                      2.0m @ 11.60/g/t Au from 445m
                      5.0m @ 5.56/g/t Au from 477m
                      16.0m @ 2.91g/t Au from 488m
  • NKR11-041: 26.5m @ 1.48g/t Au from 350.4m
                    Including:  5.0m @ 3.34g/t Au from 350.4m
                      3.0m @ 5.11g/t Au from 374m
  • NKR11-042: 7.0m @ 2.47g/t Au from 301m
  • NKR11-043: 52.0m @ 3.37g/t Au from 201.0m
                    Including:  9.0m @ 4.36g/t Au from 201m
                      16.0m @ 7.74g/t Au from 214m
                      18.7m @ 2.33g/t Au from 280m
                    Including:  7.0m @ 5.51g/t Au from 280m

Note: True widths are approximately 60% to 70% of the length of the stated intersection lengths. A full list of intersections from the drilling is provided in Table 1 attached, together with drill hole collar locations shown on Figure 2 attached.

Six holes intersected multiple zones of mineralisation from the parallel Western and Eastern Lodes and the broad, central stockwork zone (see Figure 3). The incidence of visible gold was observed within a number of mineralised intersections which is a common feature of the Obotan mineralisation.

The Obotan Project comprises four known deposits - the larger Nkran deposit and the smaller satellite deposits at Abore, Adubiaso and Asuadi (see Figure 1), unlike the other Obotan deposits, Asuadi has not previously been mined.

Obotan was mined by Resolute before closing in 2002 after producing a total of 730,000oz at an average grade of 2.2 g/t gold when the gold price averaged approximately US$350/oz.

PMI has completed 56 resource extension drill holes since the start of the drilling at Nkran in 2010 with 25 drill holes have been previously reported to date, in addition to these latest seven drill holes. Due to laboratory delays, the results from another 24 holes are still pending. PMI has been advised that this backlog is being addressed and data flow is beginning to improve.

Three diamond drill rigs are presently operating. One rig will remain at Nkran to continue the resource expansion programme and two drilling rigs have been relocated, one at each of the satellite deposits, Adubiaso and Asuadi.  This is aimed at delineating the potential for shallower occurrences of oxide gold mineralisation which could provide earlier cash flow opportunities

The recently completed drill holes at Nkran are part of a broader ongoing circa 40,000m drilling campaign designed to upgrade and expand the current gold resource inventory at Obotan.  The Obotan drilling programme will be used for a new resource estimate currently scheduled for completion at the end of the September Quarter and will underpin a technical and economic study to be completed by the end of 2011.

"PMI is making steady progress in the transition from gold explorer to producer," Managing Director Collin Ellison said. "These latest drilling results highlight the potential to grow the resource inventory at Obotan.  Work is advancing on the pre-feasibility study with a team of world-class experts are being assembled to ensure the Company maximizes its opportunities."

As part of the geological appraisal of the Nkran deposit, suitable sites will be identified to drill metallurgical holes for a future metallurgical test work programme and geotechnical holes for a geotechnical programme.

Geological studies have commenced on Nkran and are providing valuable additional information to improve the understanding of the deposit and in particular the controls on the mineralisation and the directions for resource extensions.

PMI also plans to test for deeper, down-plunge extensions of the mineralisation below the limit of the current resource, greater than 450 metres below the surface (greater than 300 metres below the base of the open pit).

On behalf of the Board,
"Collin Ellison"
Managing Director & CEO


  1. Indicated Resource of 3.06 million tonnes grading 1.59 g/t gold for 156,000 oz; Inferred Resource of 15.64 million tonnes grading 2.1 g/t gold for 1,053,000 oz., as reported in the December 8, 2010 technical report prepared by Hellman & Schofield Pty. Ltd., available at www.sedar.com.
  2. Measured Resource of 0.66 million tonnes grading 5.30 g/t gold for 112,000oz; Indicated Resource of 0.66 million tonnes grading 5.65g/t gold for 121,000oz; Inferred Resource of 0.67 million tonnes grading 5.31 g/t gold for 115,000oz., as reported in the December 3, 2010 technical report prepared by SEMS Exploration Services Ltd., available at www.sedar.com.

Scientific and technical information contained in this news release has been reviewed and approved by Collin Ellison, C.Eng. a "qualified person" as defined under National Instrument 43-101. Field work was supervised by Donald Allen, MASc. P.Eng. (B.C.) and Paul Abbott MSc. Consulting Geologists. HQ and NQ core was logged, sawn and sampled on site, with half samples sent to SGS Laboratory in Tarkwa, and analyzed for gold by fire assay-AA on a 50 gram sample charge or by screened metallics AA finish.  Internal QC consisted of inserting both blanks and standards into the sample stream and multiple re-assays of selected anomalous samples. Where multiple assays were received for an interval, the final value reported was the screened metallic assay if available, or in lieu of that the average of the other results for the interval. Results from the QC programme suggest that the reported results are accurate. Intercepts were calculated with a minimum 1.0 g/t Au cut off at the beginning and the end of the intercept and allowing for no more than ten consecutive metres of less than 0.5 g/t Au internal dilution. Intercepts above 10.0 g/t Au metres are reported separately. Grade x Width intercepts of less than 10.0 g/t Au metres were not reported. True widths are estimated at from 60% to 70% of the stated core length.

The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Donald Allen, who is a Member or Fellow of the Association of Professional Engineers of BC, a 'Recognised Overseas Professional Organisation' (ROPO) included in a list promulgated by the ASX from time to time. Donald Allen is employed by PMI Gold Corporation. Donald Allen has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves'.  Donald Allen consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Cautionary Note Regarding Forward-looking Statements
This news release includes certain forward-looking statements or information.  All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralisation and geological merits of the Obotan and Kubi projects and the plans, objectives or expectations of the Company with respect to the advancement of these projects and completion of scoping and pre-feasibility studies, are forward-looking statements that involve various risks and uncertainties.  There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.  Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities; fluctuating gold prices; possibility of equipment breakdowns, delays and availability; exploration cost overruns; availability of capital and financing; general economic, market or business conditions; regulatory changes; timeliness of government or regulatory approvals; and other risks detailed herein and from time to time in the filings made by the Company with securities regulators, including in the section entitled "Risk Factors" in the Company's Annual Information Form dated December 8, 2010.  In particular, statements relating to the Company's plans to complete a pre-feasibility study on the Obotan project by the end of 2011 are subject to various factors, including positive results from ongoing exploration; expansion and upgrading of existing mineral resources (which are currently primarily in the inferred resource category); and completion of favourable geotechnical drilling programmes, metallurgical test work, mine plan engineering, environmental and community relations assessments, and preliminary economic assessments.  Due to the uncertainty which may attach to inferred mineral resources, it cannot be assumed that all or any part of the inferred mineral resources at Obotan will be upgraded to indicated or measured mineral resources as a result of continued exploration. 

The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Table 1 - Gold Intercepts (>5.00 g/t Au metres - uncut grade values):

Drill Hole From
Metres
To
Metres
Intersection
Length Metres
Weighted Avg.
Grade g/t Au
(uncut)
NKR11-036 271.00 396.00 125.00 2.18
including 271.00 279.00 8.00 19.01
including 284.00 286.00 2.00 3.09
including 294.70 302.00 7.30 1.07
including 346.00 364.00 18.00 3.12
including 388.00 396.00 8.00 1.28
  449.00 462.00 13.00 1.18
  478.00 489.00 9.00 1.17
NKR11-038 386.00 504.00 118.00 2.43
including 394.00 398.00 4.00 9.82
including 405.00 428.00 23.00 3.66
including 405.00 411.00 6.00 8.50
including 445.00 447.00 2.00 11.60
including 458.00 461.00 3.00 2.66
including 464.00 470.00 6.00 3.92
including 477.00 482.00 5.00 5.56
including 488.00 504.00 16.00 2.91
NKR11-041 226.50 243.00 16.50 1.64
including 240.00 243.00 3.00 4.61
  350.45 377.00 26.55 1.48
including 350.45 355.50 5.05 3.34
including 374.00 377.00 3.00 5.11
NKR11-042 268.00 271.00 3.00 2.94
  301.00 308.00 7.00 2.47
NKR11-043 201.00 253.00 52.00 3.37
including 201.00 210.00 9.00 4.36
including 214.00 230.00 16.00 7.74
  280.00 298.72 18.72 2.33
including 280.00 287.00 7.00 5.51
NKR11-044 259.00 273.00 14.00 1.19
including 270.00 273.00 3.00 2.90
NKR11-051       **NSR

**NSR - no significant results

Please visit our website for property details including drill hole locations and cross section diagram

________________________

1 Note: a full list of drilling results from all seven holes for which assays have been received is provided in Table 1.


SOURCE PMI Gold Corporation

For further information:

Canada: Dianne Szigety, Corporate Secretary: 1 (604) 682-8089     Toll-Free:  1 (888) 682-8089
Australia:

Collin Ellison, Managing Director & CEO: (+61) 401 888 323
or Nicholas Read / Paul Armstrong, Read Corporate: +61 8 9388 1474  Mobile: +61 419 929 046
or visit the PMI Gold Corporation website at www.pmigoldcorp.com

Profil de l'entreprise

PMI Gold Corporation

Renseignements sur cet organisme


FORFAITS PERSONNALISÉS

Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .

ADHÉSION À CNW

Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.

RENSEIGNEZ-VOUS SUR LES SERVICES DE CNW

Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.