PMI Gold confirms high-grade intersections at Obotan Project

PMI Gold (CVE:PMV, ASX:PVM) Wednesday confirmed the internal continuity of its flagship Obotan project in Ghana, with the occurrence of a higher grade core with further wide and high grade intersections from Nkran.

Obotan, located in south-west Ghana, comprises four known deposits: the larger Nkran deposit, and the smaller satellite deposits at Abore, Adubiaso and Asuadai.

Highlights of assays from an additional 35 diamond drill holes for 7,614 metres showed 3.47 grams per tonne gold (g/t) over 30 metres and 51.17 g/t gold over 8 metres.

The latest data will be incorporated in a resource re-estimate, planned for early 2012.

The upper portion of the Nkran, Abore and Adubiaso deposits were previously mined by Resolute before closing in 2002, after producing a total of 730,000 ounces at an average grade of 2.2 g/t gold, during a period of low gold prices of less than $350 per ounce. Approximately 590,000 ounces of Resolute's total production was from the Nkran pit.

Since acquiring the Obotan project, PMI Gold has completed 225 resource extension, confirmation and in-fill diamond drill holes for 59,084 metres of drilling, with emphasis on the larger Nkran deposit.

Three diamond core rigs are currently active at Obotan on continued resource definition drilling.

PMI Gold said that a pre-feasibility study for Obotan remains on target for completion in December 2011 to be immediately followed by a bankable feasibility study scheduled for completion mid-2012.

These studies have been significantly de-risked by Resolute's successful mining history, which was carried out during a period of substantially lower gold prices and reported few mining and processing issues. The company also had a good correlation between the resource model and grade control drilling, PMI said.

In mid-October, PMI Gold unveiled an NI 43-101/JORC compliant estimate, completed by SRK Consulting, comprising measured resources of 14.67 million tonnes at 2.66 grams per tonne (g/t) of gold for 1.22 million contained ounces; indicated resources of 27.5 million tonnes at 2.32 g/t for 2.00 million gold ounces; plus an additional 17.54 million tonnes of inferred resources grading 2.35 g/t gold, for 1.29 million contained ounces.

Over three quarters of these resources  - 2.5 million ounces measured and indicated grading 2.54 g/t gold and 1.02 million ounces inferred grading 2.54 g/t gold - fall within the Nkran deposit.