Pelangio Mines Inc.
539 Moorelands Cres.
Milton, Ontario L9T 4B2
Phone (905) 875-3828
Fax (905) 875-3829
NEWS RELEASE
PELANGIO REPORTS FINAL RESULTS FROM FIRST SURFACE
EXPLORATION PROGRAM AT ITS OBUASI GOLD PROPERTY IN GHANA
TORONTO, Ontario (October 10, 2006) – Pelangio Mines Inc. (PLG: TSX) (“Pelangio”
or the “Company”) today reports on final results from its first surface exploration
activities conducted between April and August 2006 on its Obuasi gold property, located
on strike and adjacent to Anglogold Ashanti Obuasi gold mine in Ghana, West Africa.
Exploration activities focused on two (Kyereboso #2 and #3) of the four mineral
concessions.
Pelangio excavated 24 trenches totaling 3,500 horizontal metres and three water wells
totaling 50 vertical metres (refer to Figure 1). The best results were encountered in
Trench 15 (1.93 g/t Au over 17 metres) (see below) in the Abomposo area located
between two major structural trends and at the Old Akrofuom village where visible gold
is found in saprolite containing extensive quartz veining (see press release dated
October 3, 2006). One of the most positive features of Pelangio's first trenching program
is that five additional trenches hit wide zones (25 to 100 metres) of "halo" gold
mineralization (100-300 ppb gold) in all three target trends. Given this large aerial
extent of gold enrichment, follow-up work to identify higher grade zones within potential
"trend haloes" will be a focusing point for the Company’s exploration program.
Pelangio’s trenching program, based on previously identified gold soil anomalies and
trench work carried out in 2004 by Randgold Resources Inc. (“Randgold”), was
designed to evaluate a variety of targets within the three major structural trends:
(1) extension of the Obuasi "Main Mine" trend, which is projected to extend onto
Pelangio’s property over a strike length of approximately 10 kilometres,
(2) extension of the Gyabunsu trend, located southeast of the Main Obuasi mine, which
extends into Pelangio’s property over a strike length of 18 kilometres, and
(3) extension of the Central trend which hosts the Chirebroso gold deposit located 1
kilometre southwest of the Pelangio’s property boundary (historical inferred resource of
235,000 ounces of gold from surface to a depth of 150 metres, non-compliant with NI
43-101 standards).
Results of the surface exploration program conducted on the Gyabunsu and Central
trends are reported below. Refer to the press release dated October 3, 2006 for
exploration results at the Old Akrofuom and Anyinabrim areas.
Gyabunsu Trend – Abomposo Area
Preliminary interpretation suggests that the Gyabunsu trend, an important gold-bearing
system at the Obuasi gold mine located southeast of the main Obuasu mine trend,
extends onto Pelangio’s property over a strike length of 18 kilometres. It is important to
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note that the Gyabunsu open pit zones at the Obuasi mine are often of short strike
length (approximately 40 metres) and are high grade (in the range of 13 g/t Au).
The Abomposo area is situated about halfway between the Obuasi “Main Mine” trend
and the Gyabunsu trend. It is at this location that Randgold obtained its best trenching
results and where Pelangio excavated five trenches totaling 500 metres.
A duplication of Randgold’s Trench 15, which had encountered 1.25 g/t Au over 23
metres, returned 1.93 g/t Au over 17 metres (from 82 to 99 m N) within a larger halo of
1.08 g/t Au over 40 metres (from 63 to 103 m N). The mineralized interval is hosted in
graphitic schists (one of the main host rocks at the Obuasi gold mine) containing a high
percentage of small quartz veinlets. A step-out trench (Trench 55E) located 55 metres
to the east of Trench 15 returned 1.77 g/t Au over 3 metres (from 13 to 16 m N). Two
additional trenches (Trench 15N and Trench 125E) excavated near Randgold Trench 15
encountered only low gold values. The mineralized zone of Trench 15 remains open to
the west.
Another trench (200 metres) excavated approximately two kilometres to the southwest,
just to the east of the Abomposo Village also returned low gold values.
Gyabunsu Trend – Pomposo Area
In the Pomposo area, Pelangio excavated a 200 meter long trench (Tarkwa Talus)
targeting the contact between Birimian volcanics and Tarkwaian sediments on the
Gyabunsu structural trend. This trench returned 0.12 g/t Au over 92 metres (from 7 to
100 m N) largely from Tarkwaian sandstones hosting quartz-tourmaline-pyrite veins.
Approximately 400 metres west of this trench, Pelangio excavated three vertical water
wells spaced at 80 metre intervals in a north-south alignment. The wells were dug to
depths of approximately 20 metres to test for flat vein systems close to the sedimentvolcanic contact. No significant mineralization was encountered. The Company will be
completing these wells to provide drinking water for the local community.
Located about 2 kilometres northeast of Tarkwa Talus, Trench 10 South Extension (150
metres) assayed 0.20 g/t Au over 27.6 metres (from 123 to 150.6 m N). Results from
Randgold Trench 10 (located immediately at the north end of Trench 10 South
Extension) are unavailable.
Results to date at Pomposo indicate a Damang-style gold-bearing mineralized system
which is characterized by a hydrothermal quartz-tourmaline-pyrite vein stockworks in
Tarkwaian rocks (Damang mine operated by Goldfields Ltd. (71.1%), located 25
kilometres northeast of the Tarkwa mine at the southern end of the Ashanti Gold Belt).
At the adjoining Obuasi gold mine, the Gyabunsu mineralization forms small high-grade
orebodies. Follow-up work by Pelangio will include intensive prospecting and infill soil
sampling on the Gyabunsu trend to identify higher grade targets.
Eastern Gyabunsu Trend – Kusa Area
In the Kusa area of the Kyereboso #3 concession, Pelangio excavated three trenches
(187 metres) in the general locality of the Centracor Adanansi gold prospect. In 1993,
Centracor Mining Ltd. drilled seven reverse circulation (RC) holes to test the prospect.
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The best results were 1.7 g/t Au over 6 metres and 1.5 g/t Au over 4 metres. In addition,
one of Centracor's trenches (Trench 5C) encountered a high-grade value of 19.9 g/t Au
over 1 metre within graphitic phyllites. The two Pelangio trenches testing this prospect
returned anomalous gold values (up to 846 ppb). In the Centracor Quartz trench, a zone
of blue quartz veining within felsic tuffs assayed 0.29 g/t Au over 49 metres (from 0 to
49 m N). The zone remains open to the south. The Cocoa trench had intervals assaying
0.16 g/t Au over 5 metres (from 14 to 19 m N) and 0.17 g/t Au over 6 metres (from 34 to
40 m N). The third Pelangio trench (Adanansi trench) located 400 metres to the
southeast of the prospect returned low gold values.
Central Trend Area
Pelangio excavated four trenches on the Central trend targets. The first trench
(Chirebroso Extension trench) targeted the eastward extension of the Tarkwaian
formation, which hosts the Chirebroso gold deposit on the adjoining property (historical
inferred resource of 235,000 ounces of gold from surface to a depth of 150 metres, noncompliant with NI 43-101 standards). Unfortunately the rain destabilized the trench walls
during excavation and no samples could be collected. The Chirebroso gold deposit has
been explored by underground development and several drilling campaigns. Both
Tarkwa-type paleoplacers (early Proterozoic Tarkwaian rocks, largely from
metamorphically modified placer gold deposits which are like, but much younger than,
those in the world’s largest gold producing region in the Witwatersrand Basin of South
Africa) and Damang-style gold mineralization are present.
The East trench returned 0.18 g/t Au over 22 metres (from 5 to 27 m N) and 0.16 g/t Au
over 24 metres (from 64 to 88 m N). Interestingly the values occurred on opposite flanks
of an antiform near the contact between Tarkwaian and Birimian rocks.
At the Brofoyeduru South 4, trench assays of 1.45 g/t Au over 3 metres (from 26 to 29
m N) and 0.56 g/t Au over 3 metres (from 83 to 86 m N) were returned from a
Tarkwaian sandstone sequence containing eight discrete quartz-tourmaline-pyrite veins
of Damang-style. The Brofoyeduru South 2 trench encountered 1.01 g/t Au over 3
metres (from 53 to 56 m N) in Birimian Volcanics.
Pelangio’s initial conclusion is that the Central trend area has good potential for hosting
Damang-style gold mineralization associated with anticlinal structures.
Ongoing Exploration Work
Pelangio has completed line cutting and soil geochemical surveys on the Meduma and
New Edubiase concessions and assay results are expected by late fall. A historic stream
sediment geochemical survey on the New Edubiase concession had identified a target
area which will be a Pelangio focus.
Intensive prospecting and infill soil sampling will be initiated on the projected extension
of the Obuasi "Main Mine", Gyabunsu and Central structural trends to identify higher
grade gold targets. This will include follow-up work at Trench 15 (1.93 g/t over 17
metres); Schoolhouse, Tarkwa Talus, Trench 10 South Extension, and Centrator Quartz
trenches where wide (25 to 100 metres), +100 ppb gold mineralization were
encountered.
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Pelangio plans to start a drilling program in early 2007.
Dr. Paul Karpeta, a well known expert on Precambrian conglomerate-hosted gold
deposits, with extensive experience working on deposits in Witwatersrand, South Africa,
Jacobina, Mexico (Desert Sun Mining Corp.) and Tarkwa, Ghana, will be carrying out
work at Pelangio’s Obuasi property focusing on the prospective Damang-style gold
mineralization identified on the Gyabunsu and Central trend targets.
Quality Assurance/Quality Control and Qualified Person
Analytical work is carried out at the independent Transworld Laboratories in Tarkwa,
Ghana. All gold assaying was performed as fire assays with atomic absorption
measured finishes using 50 gram aliquot charges and detection limit of 1 pbb (part per
billion) gold. Pelangio inserted its own standard samples into each sample batch for
quality control of the analytical results. Pelangio’s exploration program in Ghana is being
managed and supervised by Chris Pegg, P. Geo, consultant for the Company, Qualified
Person within the meaning of National Instrument 43-101. Mr. Pegg is responsible for
the technical information in this release and has verified the data disclosed in this
release.
Detour Lake Project – Amendment to Asset Purchase Agreement
The Asset Purchase Agreement between Pelangio and Detour Gold Corporation
(“Detour Gold”) was further amended effective October 4, 2006 at the request of Detour
Gold to allow Detour Gold to use subscription receipts rather than common shares in
connection with its proposed private placement. Pursuant to the terms of the Asset
Purchase Agreement, Detour Gold is required to complete a private placement of up to
5 million Common Shares for gross proceeds of a minimum of $10 million. The
amendment permits Detour Gold to raise the $10 million gross proceeds through the
use of subscription receipts at an issue price of $2.00 per subscription receipt. The
private placement is required to close on or before October 25, 2006. A portion of the
gross proceeds (75%) is to be held in escrow until shareholder approval for the sale for
the Detour Lake Project is obtained by Pelangio. Detour Gold’s subscription receipts will
automatically convert to common shares of Detour Gold contemporaneously with the
closing of the initial public offering (“IPO”) of Detour Gold. The Company is of the view
that the amendment to the Asset Purchase Agreement is not material. A copy of the
second amending agreement is available on SEDAR. For further information on the
Asset Purchase Agreement, see the Company’s management information circular dated
September 25, 2006 available on SEDAR.
About Pelangio
Pelangio is a gold exploration company active in the top-ranked mining jurisdictions in
the world, Canada and Ghana. The Company focuses on the acquisition and exploration
of under-valued or early stage exploration prospects located on world-class gold belts,
where the potential for discovery can provide a significant return on investment. The
Company recently entered into an Asset Purchase Agreement (August 21, 2006)
whereby its advanced exploration stage Detour Lake project will be transferred to Detour
Gold Corporation (“Detour Gold”), a newly formed company, part of the Hunter
Dickinson group of resource companies. A new study, announced on September 22,
2006, outlined a multi-million ounce resource (indicated resource of 20.0 million tonnes
grading 2.14 g Au/t containing 1,379,500 ounces and inferred resource of 35.4 million
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tonnes grading 1.8 g Au/t containing 2,035,650 ounces) at the Detour Lake Mine
property (former Detour Lake mine, which produced 1.8 million ounces of gold). Subject
to the successful completion of an IPO by Detour Gold, Pelangio will have approximately
a 47% equity interest in the company allowing Pelangio to maintain upside exposure to
the project.
Pelangio’s main focus is to advance its exploration programs on its premier land position
in Ghana totaling 411 square kilometres, located on strike and adjacent to AngloGold
Ashanti’s Obuasi gold mine, which has reserves of 8.6 million ounces of gold. The mine
has produced over 30 million ounces of gold since mining operations started in 1897.
For additional information, please visit our website at www.pelangio.com or contact:
Ingrid Hibbard, President & CEO – Pelangio Mines Inc.
Tel: 905-875-3828 / Fax: 905-875-3829 / Email: ihibbard@pelangio.com
Laurie Gaborit, Investor Relations – Pelangio Mines Inc.
Tel: 416-350-2112 / Fax: 905-875-3829 / Email: lgaborit@pelangio.com
Martti Kangas, Investor Relations – The Equicom Group Inc. (Toronto)
Tel: 416-815-0700 ext. 243 / Fax: 416-815-0080 / Email: mkangas@equicomgroup.com
Forward Looking Statements
Certain statements herein may contain forward-looking statements and forward-looking
information within the meaning of applicable securities laws. Forward-looking statements or
information appear in a number of places and can be identified by the use of words such as
“plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such
words and phrases or statements that certain actions, events or results “may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved. Forward-looking statements and information
include statements regarding our exploration plans and exploration results with respect to our
Obuasi gold property, the estimation of mineral resources, the sale of the Detour Lake Property
and the issuance of shares in connection with the sale and are subject to such forward-looking
risks, uncertainties and other factors which may cause our actual results, performance or
achievements, or industry results, to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statement or information. Such
risks include gold price volatility, change in equity markets, political developments in Ghana, the
uncertainties involved in interpreting trenching and channel sampling results and other geological
data, increase in costs and exchange rate fluctuations, failure to satisfy the conditions of closing
and other risks involved in the gold exploration and development industry. See our management
information circular dated September 25, 2006, our 43-101Technical Report dated September 21,
2006, our annual information form and our quarterly and annual management’s discussion and
analysis for additional information on risks and uncertainties relating to the forward-looking
statement and information. There can be no assurance that a forward-looking statement or
information referenced herein will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements or information. Also, many of the
factors are beyond the control of Pelangio. Accordingly, readers should not place undue reliance
on forward-looking statements or information. All forward-looking statement and information herein
are qualified by this cautionary statement.
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Figure 1. Pelangio 2006 Surface Exploration Program at the Obuasi Property
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