“Obotan was originally mined by Resolute Mining Limited. In 2002 Resolute decided it was uneconomic to proceed with deepening and exploiting the resources and returned the licenses to the government which PMI then acquired. The Obotan project consists of three different pits—the major one is the Nkran Pit and then there’s the Adubiaso and Abore. All three have been mined-out in an open pit. There is one fourth deposit, Edubia—not mined by Resolute—which fits into the Obotan project that hasn’t had any previous mining on it.
“What the company is seeking to do is to develop the resources beneath the previous pits, and then to rebuild an operation based on those resources. The original process plant has been sold and has gone, but the infrastructure, power lines, access roads, waste dumps, tailings dams—they’re essentially still in place. The company was also able to acquire all of Resolute’s historical operating information, which gives us confidence in the metallurgical recovery of gold from those ore bodies. Resolute’s plan prior to the cessation in mining was to develop an underground mine, particularly at Obotan, so there was significant drilling done. The data base from that drilling constitutes the major part of the resource and the resource estimate which PMI currently has. Presently there’s only a comparatively small proportion of the resource in the indicated category, the majority of the resource is in the inferred category. What we’ve been doing since is continuing to drill out those resources—particularly in the Nkran pit.
“What we released today was part of the ongoing drilling which achieves a number of objectives. One of which was to validate the accuracy and the resources developed by Resolute. The second objective was to drill between the lines that had previously been drilled, in order to close up the spacing and give us both confidence and extend resources along strike. The drilling was also intended to look at down-dip extension of resources. So the program, eventually, will end up with a conversion of the inferred resources and the inclusion of additional resources above and beyond what was outlined by Resolute. The purpose of all of this—in conjunction with the metallurgical test work, metallurgical drilling, geotechnical drilling and the rest of it—is to take this resource model, once we have it completed, and do an economic evaluation on it. If it stands up as we anticipate, that will then be the basis for a prefeasibility and feasibility study.
“The results today weren’t a surprise. They prove what we already knew about the project: it’s very robust, it has some very high grade intersections and it has the potential to make a new mine.
“We’ve got 70 square kilometres of tenements to the south of the Obotan tenement area, which have not been properly explored in the past. They had been held by a number of different companies, who each have done their own independent exploration and drilling and evaluation. PMI has acquired all of that land. We’ve put geophysics over the full package, and with the geophysics and the information we have from the historical work, we’ve been able to highlight the geological structures—in excess of 20 exploration targets which we need to explore. So what we’re going to do this year—with the additional rigs that we’ve now got committed—is to put parts of our focus into exploring and looking at developing the upside potential for PMI in the exploration tenements. The priority is to move Obotan to production, and that’s what our target is—to finish a prefeasibility and feasibility study—with the objective of turning it into an operating mine towards the end of 2013.
“We have the money in the bank, we don’t have any debt. We have some great people on site to develop these assets, but given the extension of the activities, we need to get some additional people to help manage all of the development and exploration activities in Ghana. That is the major factor that we have to achieve. In the meantime we’re using skilled contracting consultant staff to fill in the period until we have our own permanent staff on board. We see a very bright future for the company.”
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