Projects Overview: Miyabi

Project Highlights

The Miyabi project area contains a major shear zone gold system which forms a 7km x 2km gold-bearing corridor. Although African Eagle (AFE) has drilled only part of the system to date, it has been able to define a JORC-standard resource of 520,000oz of gold. Metallurgical tests have shown that the gold can readily be extracted by conventional leaching. The Company holds licenses covering more than 500km² surrounding the main corridor and has defined numerous other targets from regional exploration. Randgold Resources (T) Ltd (Randgold) is currently funding and managing exploration of the project under an “earn-in” joint venture with the Company.

Licences

The project covers an area of 504.45km²and is comprised of fourteen licences. AFE has a 90% holding in eleven of the properties and 100% in the remaining three (Fig.1 Miyabi licence holding).

Randgold is currently in a joint venture with the Company and can earn a 50% interest by solely funding all further project costs up to and including a defined Pre-Feasibility Study. On completion of the Pre-Feasibility Study, African Eagle can elect either to retain a 49% stake in the project by co-funding a Definitive Feasibility Study, or to dilute to a 35% stake if Randgold alone funds this phase.

Geology

The Miyabi project area covers an inlier of greenstone at the southwest end of the Siga Hills Greenstone Belt and the west end of the Nzega Greenstone Belt in the Lake Victoria Goldfields (LVGF). The lithological and structural trends suggest that the Nzega belt is a fold extension of the Siga Hills Belt and that the Miyabi Greenstone may be the apex of this fold closure.

The Miyabi Greenstone inlier is composed of a suite of mafic and felsic volcanics and volcanic metasediments containing some banded iron formation (BIF). There is little outcrop except for hills of BIF in the south of the area and kopjes of the granites which surround the Miyabi inlier.

Resource

A JORC compliant mineral resource was calculated with 12.4Mt at a grade of 1.3g/t, containing 520,000 ounces of gold, using a cut-off grade of 0.5g/t. Of this resource, 71% is in the Indicated category. Grade sensitivity analysis revealed that at 1g/t cut off, the resource would be 6.3Mt at 1.82g/t containing 370,000 ounces of gold. Independent metallurgical testing of all of the principal mineralised zones at Miyabi showed that standard leaching recovers 95% of the gold from the ore.

Prospect Areas

The main gold mineralisation occurs in the north of the project along a northeast trending shear zone about 7km x 2km the Miyabi Corridor which hosts the main mineralised prospects of Kilimani, Shambani, Ngaya and Faida (Fig. 2). African Eagle has drilled the four prospects and all returned significant drill intercepts including:

Current Status

African Eagle's geochemical prospecting team discovered the Miyabi gold system. AFE has carried out detailed exploration of the main gold-bearing corridor, including extensive geochemical and geophysical surveys.

RAB, Aircore, RC and Diamond Drilling by the Company yielded the 520,000oz resource estimate. In the rest of the project area regional exploration has identified several promising targets, notably the Idahina East prospect which yielded soil geochemical gold values in excess of 0.5g/t.

Randgold’s Phase One exploration programme included 20 diamond drill holes (4,078m), mostly along two fences across the entire Miyabi corridor. This was principally designed to provide geological and structural information, and was not expected to add to the existing 520,000oz resource, but none the less, some significant assay results were reported by Randgold. These included 12.2g/t over 1m within 1.6g/t over 9m in MBDH-44, 1.3g/t over 9m within 0.6g/t over 26m, and 1.3g/t over 9m in MBDH-47.

Three of the drill holes were completed over a prominent geophysical induced polarisation target located northwest of the Kilimani deposit, and revealed gold associated with sulphides at the granite-greenstone contact zone. Such contacts are favourable sites for gold mineralisation, as at Faida, which hosts a resource of 200,000 ounces 5km to the southwest. The gold intersections helped to increase confidence in the decision to proceed to the next phase.

Randgold’s structural and geological modelling of the drill data indicates at least two phases of folding in the Miyabi corridor. This implies the possibility of hidden fold closures with associated “blind” gold mineralisation at depth.

Randgold also completed a RAB drilling programme at the Idahina gold geochemical target, which lies approximately 12km southeast of the main Miyabi Corridor. A total of 99 holes were completed for 3,402 metres, but results are still pending.

Future Programme

Randgold has exercised its option to begin a formal earn-in and has embarked on a Phase 2 exploration programme.

This complex structural evolution is likely to have generated hidden fold closures which may host gold mineralisation in prospective lithological units

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Fig.1 Miyabi licence holding

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Fig.2 Miyabi prospect areas

Miyabi fact sheet - January 2008
(PDF - 1.05MB)