PMI Gold to purchase Nevsun's Kubi Gold Project, Ghana


    TSX Venture Exchange: PMV
    Frankfurt: WKN888063
    Issued & Outstanding: 67,611,311
    Fully Diluted: 94,750,999

    VANCOUVER, Sept. 17 /CNW/ - PMI Gold Corporation (TSX/V:PMV) - Douglas
MacQuarrie, President, announces that PMI Gold Corporation ("PMI Gold") and
Nevsun Africa (Barbados) Ltd. ("Nevsun"), a wholly owned subsidiary of Nevsun
Resources Ltd. of Canada, have reached agreement whereby PMI Gold will
purchase Nevsun's Kubi Gold Project, located 20 kilometres south of the
AngloGold Ashanti Obuasi mine and 46 kilometres southeast of our Obotan
    PMI Gold will purchase all of the shares of Nevsun Resources (Ghana) Ltd.
("NS Ghana"), a Barbados registered company, which holds the Kubi Gold Project
interests, for 9 million shares in the capital stock of PMI Gold, and an
additional US$3million in cash or in PMI Gold shares, or a combination of both
cash and shares at the option of PMI Gold, within six months of the date of
closing. Closing is subject to the receipt of formal documentation, all
necessary regulatory and governmental approvals, including the re-assignment
of the Kubi Mining Lease by the Government of Ghana which is currently being
transferred from Ashanti Goldfields Company Limited ("Ashanti", a subsidiary
of AngloGold Ashanti) to NS Ghana. In addition, Nevsun retains the right to a
seat on the Board of Directors of PMI Gold.
    The Kubi deposit was first developed by local artisanal miners, with
eight adits being driven in the 1920s. In 1988 BHP (now BHP Billiton), during
a major reconnaissance soil survey along the western margin of the Ashanti
gold belt, outlined strong gold anomalies near the old workings and completed
a program of ground geophysics and drilling.
    NS Ghana optioned the property from BHP in 1993. Subsequently, they
completed extensive exploration at Kubi in the mid through late 1990s, and
defined gold mineralization in a near vertical 1.0 to 15.0 metre thick gold,
garnet, and sulfide rich horizon. Drilling has defined the mineralized zone
over an 1,800 metre long by up to 700 metre deep block contained within a
northeast trending shear zone at the contact between Birimian and Tarkwaiian
    In 1999, NS Ghana transferred the property to Ashanti, who in return for
cash and royalty payments to NS Ghana, mined from two small pits 58,696 ounces
of gold in 500,230 tonnes of oxide ore grading 3.65 g/t gold, with the
recovered grade 28% higher than Ashanti's modelled grade.
    Golder Associates Africa (Pty) Ltd., on behalf of PMI Gold, carried out
data verification on drill logs and assay values and completed a site visit in
early June, 2007 and have prepared a current NI 43-101 compliant mineral
resource report. Their mineral resource estimate using multiple indicator
kriging is based on data from 212 diamond drill holes in the NS Ghana database
less the resource already mined by AngloGold Ashanti:


    INDICATED          5.13                 3.66                  604,085
    INFERRED           5.38                 1.88                  315,079

    Within the zone estimated above, a core of higher grade material can be
determined and this will be the initial target for ongoing studies.
    In 2006 Ashanti commenced the mine reclamation and gave notice that they
were returning the property interests to NS Ghana. The Ghana Government holds
a 10% free carried interest and has the right to purchase an additional 20% on
terms to be agreed on between the parties. There is also a 3% net profits
royalty, payable to International Royalty Corporation (an assignment from
BHP), after all costs have been recovered. Project exploration and
developments net costs to date of over US$19 million are available to offset
future Ghanaian tax and royalty considerations.
    A portion of the Kubi mining lease is covered by forest reserve, however
PMI Gold anticipates developing an underground operation by shaft or decline
from the non-forest reserve area and trucking the material off site for
processing, and therefore will not be overly impacted by forest reserve
issues. The main Kubi mining lease covers 19.2 sq km and has a renewable
10 year term valid to 29 April 2009.
    Douglas R. MacQuarrie, President and CEO commented: "The Kubi NI43-101
compliant Mineral Resource ounces in combination with the large underground
exploration target at our past producing Obotan project, the long term upward
trending gold market, and Ghana as a destination of choice for mining
investment, should over the next few years provide the backdrop for a new gold
producer in Ghana. Previous metallurgical tests indicate that the gold
mineralization at both Kubi and Obotan are non-refractory, free-milling, and
have very high recoveries using conventional circuits. PMI Gold believes that
a near term production decision will be possible. Significant further capital
will be required to complete the above program, to be raised through a
combination of equity and project financing, and which will be dependant on
further positive engineering reports. A full pre-feasibility study on bringing
Kubi into production will be commissioned as soon as possible. PMI Gold looks
forward to moving these projects ahead - a win win for Ghana and the Nevsun
and PMI Gold shareholders. We look forward to having Nevsun as our single
largest shareholder."
    Ghana is Africa's second largest gold producer and has recently attracted
US$1.5 billion in committed foreign investment due to its long mining history,
prospective resource base, reasonable taxation and stable government. PMI Gold
now controls a 70 kilometre length of the Asankrangwa Gold Belt in
12 concessions/options totalling 484 sq km and on the Ashanti Gold Belt a
mining lease and 2 concessions/options totalling 214 sq km.
    This news release has been prepared by Douglas R. MacQuarrie,
P.Geo.(B.C.), a Qualified Person under National Instrument 43-101, and is
based on the recent independent report by David Farrow of Golder Associates
Africa (Pty) Ltd. which will be filed on Sedar at; a
review of the significant Kubi historical data including visits to all the
concessions referred to herein; an examination of drill core; and discussions
with current and former directors, employees and contractors of Nevsun.

    On behalf of the Board,

    "Douglas R. MacQuarrie"

    Douglas R. MacQuarrie
    President & CEO


    This news release contains forward-looking statements which involve known
and unknown risks, delays and uncertainties not under the Company's control
which may cause actual results, performance or achievements of the Company to
be materially different from the results, performance or expectations implied
by these forward-looking statements. We Seek Safe Harbour.

For further information:

For further information: Douglas R. MacQuarrie, President & CEO,
Telephone: (604) 682-8089, Toll-Free: (888) 682-8089, Facsimile: (604)
682-8094 or for European Investors: Florian Riedl-Riedenstein: Tel:
43-2774-28814, e-mail: or John Mullen: Tel: 41-522-428795,
e-mail: John or visit the PMI Gold Corporation website at (in German:

Organization Profile

PMI Gold Corporation

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890