African Queen Mines Ltd. announces that it has provided formal notice of abandonment to Bobcat Mining Limitada with respect to the Braganza Gold Project in Mozambique. The Company has the right to earn up to a 75% interest in the Project pursuant to the Letter Agreement dated August 17, 2007, between Pan African Mining Corp., predecessor to the Company, and Bobcat, as amended on October 4, 2007 and May 30, 2008. By abandoning the Project at this time, the Company is relinquishing all rights with respect to the underlying property licenses and otherwise relating to the Project.
The Agreement covered exploration and development of the historic Braganza gold mine situated at the eastern end of the Mutare – Penhalonga Greenstone Belt in Manica Province in central Mozambique. The Project comprises a single exploration license (EPL 857L) and a portion of EPL 679L to the immediate south, encompassing in aggregate approximately 6 km2. Included in the regional project area are also the Diaz Pereirra, Damp, Richmond and Marianas historic minesites, marked by pits, trenches and small adits.
During the past two years, the Company carried out exploration activities on the Project under the guidance of Senior Consulting Geologist Pete Siegfried, P. Geol., a qualified person. Work included detailed mapping and sampling, ground magnetic and IP surveys of the area, trenching, channel sampling of old adits and limited reconnaissance drilling. The prospecting operations were carried out on behalf of the Company by Remote Exploration Services of Cape Town, South Africa. The data compiled reflects the results of a highly professional and intensive geological study of the area with aggregate costs approximating $600,000.
While surface sampling of the area reflected the presence of gold with grades typically ranging from 0.1 g/t Au to 1.0 g/t Au, and individual grab samples as high as > 5 g/t Au, trench sampling and limited reconnaissance drilling did not provide encouragement for the existence of a commercially viable primary deposit in the area. To the contrary, results just received indicate a disappointing tenor of gold below surface, with the most intensely mineralized and sheared part of the structure yielding 0.22 and 0.25 g/t Au over 2 m contiguously. Other values were in the range of 0.1 g/t Au.
Due to the results of the exploration program to date, management of the Company has concluded that no further work on the Project is recommended, although some potential may exist on other parts of the regional structure, albeit with difficult access in steep and mountainous terrain. The Company has therefore decided to abandon the Project and relinquish its rights.
According to Irwin Olian, CEO of the Company, “Results from Braganza to date simply do not justify further expenditure of time, energy and funds on the part of the Company. It appears that the Portuguese did a very efficient job of mining all of the productive, higher-grade zones at Braganza decades ago; in this rather difficult economic environment it is important that we prioritize our projects with a view toward committing our resources to those projects most likely to add value long-term for our shareholders. We remain very excited about our diamond projects in Botswana and Namibia, which will be the principal focus of our activities in the coming months. At the same time, we will be evaluating results from our other three gold projects in Mozambique with a very sharp pencil to ensure that our efforts there are being optimized.”