As of the end of January 2013 Abzu has spent on Nangodi over $2.2M. The Company's option agreement with Kinross allows for the creation of a joint venture after a cumulative spend of $3M within three years as per a set schedule on any of the ten option agreement properties (which includes Nangodi and Yameriga and the Zupeliga target). As per the option agreement, the joint venture shall grant to Abzu 51% ownership and operational control, while Kinross would have 49% (these ownership levels do not include the Ghanaian state's 10% free carried interest in all Ghanaian mineral projects). Abzu is significantly ahead of the $3M/three year schedule, and by the conclusion of the planned 2013 drill program or shortly thereafter the Company expects a joint venture with Kinross to be formed.
Abzu, together with Stonehouse (see press release of January 10, 2013), has embarked on acquiring information as part of the initial scoping study process for Nangodi, which includes talks with local utility managers, local and national government officials and engineering contractors. Additionally, the Company expects to receive metallurgical test work results in 2Q2013 which will be announced at that time.
Abzu has engaged Newcoast Capital ("Newcoast") for corporate development and marketing advice. Newcoast is led by Kirk Exner and has a solid reputation among junior mining investors for bringing quality companies to a wide audience. Newcoast has been granted 270,000 options. The options are exercisable on or before February 25, 2018 at a price of $0.13 per share.
Tim McCutcheon, CEO, commented; "We are well on our way to link together the work done by past operators and compile all the data into one resource number to give investors a better idea of where Nangodi stands today and its potential for resource expansion. The historic AfricWest data explains our enthusiasm for Nangodi. Our initial results for the 2013 drilling season are in-line with historic results and our expectations for a robust gold resource once modeling is completed. Additionally, I look forward to the formation of a joint venture with Kinross, who bring a broad skill set and resource base to help Abzu develop Nangodi into a mine."
Qualified Person and Quality Control/Quality Assurance
Professional geologist (AIPG cert. # 10821) Dr. Paul Klipfel, President and a Qualified Person as defined by National Instrument 43-101, has designed, planned, and supervised jointly with Ms. Roisin Goodman Abzu's exploration manager, the drilling and work program at Nangodi and is responsible for all aspects of the work, including the quality control/quality assurance program. Samples are collected systematically and in a consistent manner. All Nangodi samples from diamond drill core are sawed and half-core samples bagged, closed and sealed at the company's core facility. RC samples are collected at the drill rig by a geologist who is a Qualified Person or is under the supervision of a Qualified Person. Samples are then transported to the company's facility in Bolgatanga where they are split sufficiently for an approximate 2 kg sample. All samples are kept secure until delivered to the ALS laboratory in Kumasi, Ghana for gold fire assay.
Dr. Klipfel did not supervise the AfricWest drill program at Nangodi nor the subsequent laboratory tests. However, there is no reason to believe that the results are not accurate. Dr. Klipfel has approved the content of this release.
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