CGA Mining Limited - Announcement to the Australian Securities Exchange and Toronto Stock Exchange - Quarterly Report

    PERTH, Western Australia, April 30 /CNW/ -

    Masbate Project Update

    Settlement of Masbate
    On 1 February 2007 CGA Mining Limited ("CGA" or "the Company") announced
that it had entered into a Sale and Purchase Agreement ("SPA") with Thistle
Mining Inc. ("Thistle") to acquire 100% of its interest in the Masbate Gold
Project in the Philippines ("Masbate" or "the Project").
    Following completion of the shareholder meetings of both CGA and Thistle,
the Company announced on the 19 March 2007 that it had settled the acquisition
of Masbate.

    Notice of Intent Leighton Contractors
    Following the acquisition, on 5 April 2007, CGA announced that it had
issued a Notice of Intent to Leighton Contractors ("Leighton") as the EPCM
contractor for the development of the Masbate Gold Project. Leighton has a
dedicated and established office in Manila and has had extensive experience in
the region, having recently constructed a similar plant in the Philippines.
    Lycopodium Limited ("Lycopodium") also agreed to form a strategic
alliance with Leighton, and will be responsible for all process engineering
and detailed design associated with the development of the Project. Lycopodium
fulfilled a similar role with Leighton on a recent development in the
Philippines and CGA is pleased to secure the benefit of these two contractors,
with valuable first hand experience in the region that will enhance efficiency
and cost effectiveness of our development program. Lycopodium has also worked
with the management team of CGA on previous gold development projects,
demonstrating a successful track record of quality service, meeting both
budgets and agreed timelines.
    Detailed agreements are currently being negotiated, however the Notice of
Intent has been issued, allowing Leighton and Lycopodium to commence work on a
number of initiatives in preparation for the development and ensuring the
commitment of Leighton and Lycopodium to the development of the Project.

    Long Lead Items Secured
    The Company also successfully completed the acquisition of the key long
lead items for the development program at the Masbate project with a primary
SAG mill and two secondary Ball mills secured and paid for. The acquisition of
these existing plant items will materially reduce the development timeline,
with Leighton currently expecting a development schedule of approximately
12 months, which is attractive relative to other comparable projects in the
development phase.

    Mandate of Project Financiers
    BNP Paribas ("BNPP") was mandated by the Company to provide and
underwrite the project finance facility for the development of the Masbate
Project. Extensive due diligence on the Project by BNPP has already been
undertaken, with the independent technical experts having completed their
review on the development program as set out in the Bankable Feasibility

    Security Incident
    A security incident occurred on Masbate Island on Tuesday 3 April 2007 in
the equipment area. There were no injuries and damage to equipment was very
limited, currently estimated at US$14,000. CGA is undertaking a review of the
security structure and history of local community relations while under the
management of Thistle and will implement the necessary procedures to ensure
the Project meets and continues to reflect the established standards and
commitment of CGA to strong community relations particularly in health,
education and sustainable development.

    Development Initiatives
    Negotiations are well underway with D.M Consunji Inc ("D.M.C.I"), a local
construction company and supplier of power, for installation of a 25MW coal
fired power station at the project site. Initial estimates indicate power
savings of approximately 30% from the feasibility parameters. The proposed
coal fired power station would service both the Project's electricity needs as
well as to supplement those of the Island.
    SRK Consulting have completed a schedule of mining activities for the
initial two years of the operation. The forecast grade is increased to 2.0g/t
for this period.
    Ammtec have carried out a metallurgicial test work program on ore from
Masbate, grinding the material to P80 75 micron. The initial result of the
finer grind test work has indicated an improvement of up to 4% maybe possible
in metallurgicial recovery as a result of the finer grind.
    This process plant flowsheet design and tailings disposal system is
presently being optimised.

    A review of the exploration potential of the broader Masbate tenements
was made during the Quarter. It is evident that mineralisation of similar
style as is seen within the area considered by the feasibility study
("Development Area") extends through much of the block of tenements and
tenement application areas surrounding the Development Area ( total area held,
including Development Area is approximately 81 square kilometres).
    Within this block, outside the Development Area, at least nineteen
specific prospects have been explored in the past, and in some cases partly
mined. All of these warrant further investigation. These include deposits at
which the previous operating mining company (Atlas Consolidated Mining and
Development Limited, "Atlas") carried out open pit (Capsay-Old Lady,
Bartolome-Aquirre, IXL-Balete) and underground (IXL-Balete) mining during the
1970's or 1980's. These operations were small scale, and did not significantly
deplete overall potential.
    Most of the prospects have only been explored at shallow depths by
trenching, pre-war underground mining, or limited drilling. Atlas carried out
a total of about 7300 metres of exploration drilling spread over six
    Given the limited drilling carried out previously, considerable upside is
believed to exist. The prospects are currently being prioritised for follow-up
which will include a reasonably comprehensive drilling program.
    A coordinated geological, geochemical and geophysical exploration program
is currently being designed to test for further targets within the area as a
whole. This will include geological mapping, drainage geochemical sampling and
a detailed airborne magnetic survey.
    Petrographic work carried out for Filminera Resources Corporation
suggests that the Masbate epithermal mineralisation relates to an alkalic
igneous environment, a characteristic shared by such large occurrences as
Lihir, Porgera, Emperor and Cripple Creek. Such mineralised systems commonly
have a closer association with causative intrusive igneous rocks than is
typical of other low sulphidation epithermal deposits, and hence greater
potential for associated mineralisation of porphyry (gold-copper) type.

    Mkushi Copper Project - Zambia

    The Mkushi Copper Project is the subject of a Joint Venture between
Seringa Mining Ltd ("SML" 100% owned by CGA) and Katanga Resources Limited
("KRL" 100% owned by African Eagle Resources Pty Ltd "AFE"). Management of the
Joint Venture is divided into two areas of responsibility.
    SML manages the development/feasibility drilling and other relevant
activities in the three core areas (refer to Drawing 1.1 below).
    KRL manages the regional exploration of all other areas within PL 114
(refer Drawing 1.1 below).

    Regional Exploration
    KRL commissioned and completed an IP survey covering 31 square kilometres
covering the strike extent of the known areas of mineralisation at Mkushi.
Forty (40) high chargeability anomalies were identified.
    A high resolution heli-mag and radiometric survey has been carried out
with interpretation by an internationally recognized expert currently

    Drawing 1.1 Mkushi Copper Project - REFER SEDAR FILING FOR DIAGRAM

    Six (6) Reverse Circulation ("RC") holes were drilled at the Munda
prospect with encouraging results as summarized in Table 1.1 below.

    Table 1.1
    Mkushi Project Exploration Results
                                               (m)    (m)    (m)        %
    MMD3             Munda  729681  8453973     77    120       43     0.465
    MMD4             Munda  730494  8454066     69    101       32       0.6

    The results, although not as high in Cu content as at Munshiwemba or 'H'
Zone, do indicate greater width of mineralisation and therefore warrant
further investigation.

    Development Drilling
    A total of 29 diamond drills holes were completed at the Munshiwemba and
'H' zone during the quarter for a total of 4247m. The improvement in
productivity was due to an additional drilling rig from Capital Drilling and a
third rig from Getwell Drilling. The diamond drill Phase 1 program is expected
to be complete by the end of this month at which time a revision of the
resources estimate will be carried out.
    RC drilling included 13 holes for a total of 1496m at 'H' and Colloquo
zones (refer Drawing 1.1). The majority of the RC drilling was pre collars for
future diamond drilling with the exception of Colloquo where the RC drilling
identified narrow zones of Cu mineralisation.

    Significant Results
    The significant results summarized in Table 2.1 are all from the southern
end of the Munshiwemba pit and demonstrate that there is very good
mineralisation over 200m of strike in this area. The strong mineralisation
does however appear to be terminated by a previously unidentified magnetic
dolerite dyke trending NE/SW and crossing the centre of the previously mined
Munshiwemba pit (refer Drawing 2.1)

    Drawing 2.1 Mkushi Copper Project Plan - REFER SEDAR FILING FOR DIAGRAM

    Based on the information available from the diamond drilling logging it
would appear that mineralisation on the north side of the dyke is both
narrower and of lower tenor than that on the southern side. Fault offsets of
mineralisation are likely, so whilst the geology is more complicated, the
prospectivity of locating additional mineralisation to the south east of the
dyke is good.

    Table 2.1
    Significant Assay Results - March Quarter
                                               (m)    (m)    (m)        %
    MH038           H ZONE  731153  8456681     63     68        5      0.91
    MH038           H ZONE                      70     73        3      1.84
    MH038           H ZONE                      36     38        2      1.12
    MH045           H ZONE  731288  8456910      9     14        5      0.76
    MH045           H ZONE                      32     35        3      0.49
    MH045           H ZONE                      44     76       32      0.67
    MH060           H ZONE  730935  8456680     83     87        4      0.56
    MH060           H ZONE                     103    106        3      2.59
    MMU012     MUNSHIWEMBA  731401  8457302     30     45       15      1.55
    MMU014     MUNSHIWEMBA  731484  8457428     54     65       11      0.33
    MMU015     MUNSHIWEMBA  731544  8457667     42     51        9      0.27
    MMU016     MUNSHIWEMBA  731918  8457917     55     67       12      0.59
    MMU016     MUNSHIWEMBA                      72     74        2      1.28
    MMU019     MUNSHIWEMBA  731862  8457906     31     36        5      4.53
    MH043No.        H ZONE  731307  8457150    124    129        5      0.57
    MH025No.        H ZONE  731375  8457186    113    120        7      0.88
    MH016No.        H ZONE  731124  8456857    112    121        9      0.96
    MH016No.        H ZONE                     125    128        3      1.34
    MH016No.        H ZONE                     133    138        5      1.19
    MH047No.        H ZONE  731100  8456755  120.5  124.5        4      1.07
    MH047No.        H ZONE                   168.5    187     18.5      0.87
    MH047No.        H ZONE                     190    192        2      1.45
    MH047No.        H ZONE                     196    204        8      2.12
    MH047No.        H ZONE                   218.5    227      8.5      2.46
    MH047No.        H ZONE                     233    243       10      4.05
    MH047No.        H ZONE                     247    254        7      2.66
    MH047No.        H ZONE                     261  262.5      1.5      1.21
    MMU017No.  MUNSHIWEMBA  731461  8457220      6    8.5      2.5      0.61
    MMU017No.  MUNSHIWEMBA                      19     22        3       0.5
    MMU017No.  MUNSHIWEMBA                      83    103       20      0.90
    MMU017No.  MUNSHIWEMBA                     113    130       17      1.00
    MMU021No.  MUNSHIWEMBA  731470  8457292     62     70        8      0.91
    MMU021No.  MUNSHIWEMBA                      76    126       50      1.96
    MMU027     MUNSHIWEMBA  731516  8457388   68.5     91     22.5      1.11
    MMU029     MUNSHIWEMBA  731505  8457323     53     72       19      1.45
    MMU029     MUNSHIWEMBA                      77     80        3      1.11
    MMU029     MUNSHIWEMBA                      91    105       14      1.85
    MMU007     MUNSHIWEMBA  731477  8457357    107    117       10      1.37
    MMU007     MUNSHIWEMBA                     122    125        3      0.92
    MMU011     MUNSHIWEMBA  731463  8457449  127.5  138.5       11      1.21
    MMU025     MUNSHIWEMBA  731777  8457835     63     71        8      2.11
    MMU025     MUNSHIWEMBA                      82     90        8     0.435
    MMU026     MUNSHIWEMBA  731511  8457427     92     94        2     0.715
    MC009         COLLOQUO  733545  8459016     76     90       14      0.89
    MC014         COLLOQUO  733728   845179     58     69       11      1.02
    H061            L ZONE  731060  8456695     75    100       25      1.79
    MH062           L ZONE  731090  8456655     33     54       21      1.68
    MH063           L ZONE  730965  8456650     26     66       40      0.95
    MH065           H ZONE  730955  8456550     31     62       31      2.13

    NB. MH065 - Includes 2m @ 16.34%

    The Qualified Person who prepared or supervised the preparation of the
above technical and scientific information is Mr. Geoffrey G Jones, Honours
Diploma Mining Engineering - Chartered Member Aus. IMM, and a Consultant to
CGA. The data has been verified for Geology and Assaying by Simon Plunkett -
BSc. Geo. A Senior Geologist. All assaying is carried out at "Genalysis
Laboratory Services Pty Ltd" in Perth and/or "AH Knight" in Zambia.

    Negotiations are well advanced with a local contractor to dewater the
Munshiwemba pit to allow survey of the excavation to be conducted and to
enable part of the Phase 2 drill program to be undertaken. It will be possible
to carry out an inpit close spaced drill program to accurately determine via
variography, the geostatistical parameters to be used in resources
    The Environmental Protection Brief was completed, by African Mining
Consultants, detailing the existing environmental conditions on site at
Mkushi. This document has been submitted to the appropriate regulatory
authority and has received approval.

    Segilola Gold Project - Nigeria

    Exploration Activity
    The geochemistry program initiated in the December Quarter continued, as
of the end of March in excess of 1000 samples had been collected and
dispatched for assay in Ghana.
    The preparations for arrival of the diamond drilling contractor are well
underway and it is expected to commence drilling before the end of the June


    Issued Capital
    The issued capital of CGA is now 161,249,976 fully paid ordinary shares,
7,450,000 options exercisable at A$0.65, expiring on 31 March 2012 and
1,650,000 options exercisable at A$0.60, expiring on 31 August 2009.
    Prior to settlement of the Masbate Project acquisition, given the basis
of calculating the number of shares to be issued to Thistle was in part
determined by the prevailing share price prior to closing, the Board approved
a share buy back in part to allow the Company to buy back shares on market
should it be in the best interests of shareholders. The Company negotiated an
amendment to the terms of the Masbate Project acquisition which fixed the
issue price of the shares to Thistle at A$0.65. The announced buy back
provides authority for the Company to buy-back up to 12,026,443 million shares
for the 12 month period ended 13 March 2008. Given the proposed development
program at Masbate, the Company does not presently intend to buy back shares,
however, it has the right to undertake such a program until 13 March 2008. Any
shares purchased under the on-market buy-back will be cancelled.

For further information:

For further information: Australian Contact, President & CEO - Michael
Carrick, Tel: +61 8 9263 4000, Fax: +61 8 9263 4020, Email:; US Contact, Chairman - Mark Savage, Tel: (505)
344-2822, Fax: (505) 344-2922, Email:

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