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MarketwireAfrican Gold Group, Inc.July 13, 2011 - 09:00:00 AMAfrican Gold Group, Inc. Positive Preliminary Economic Assessment Generates$216.9 Million NPV and 90% IRRTORONTO, ONTARIO--(Marketwire - July 13, 2011) - African Gold Group, Inc.,("AGG" or the "Company") (TSX VENTURE:AGG) is pleased to announce the resultsof a positive NI 43-101 compliant Preliminary Economic Assessment (the "PEA"or the "Study") that evaluates the potential of an open pit, bulk miningmodel, utilizing a gravity recovery process plant, at the Company's Kobada(Mali) gold project. The consulting group Bumigeme Inc., located in Montreal,Quebec, was commissioned by AGG to complete the study.The Study incorporates and includes drill data up to the end of December,2010. There is no drill data from the 2011 campaign included in the Study.More specifically, the Study does not incorporate drill data for the northernextension holes that extend Zone 1 up to 2 kilometers north of the Zone 1deposit, it does not incorporate the 2011 southern holes or the newlydiscovered Foroko North deposit, nor the newly discovered Termite Zone, thelatter two are separate and distinct structures from Zone 1.Project Economics - Base CaseThe PEA estimates an after-tax Net Present Value (NPV) of US$216.9 millionfrom commencement of construction and an after-tax Internal Rate Of Return(IRR) of 90.57% using a base case of US$1,100 per ounce of gold and a discountrate of 5%.The Kobada project base case is for processing 20,000 tonnes per day for atotal of 7,000,000 tonnes per year in a gravity process plant that isprojected to recover 87.9% of the gold contained in 41,750,000 tonnes oflateritic material assaying 0.64 g/t Au, for average annual production of126,600 ounces of gold for the first five years of operation. The averageannual operating cost is calculated to be US$8.27/t of ore for the first fiveyears of operation with a CAPEX of US$122,500,000. The project produces goldat the direct cost of US$470.90 per ounce. During years 4 and 5 of operationsthe CAPEX will be increased by US$2.9 million for the addition of a ball millthat will be required to process the sulphide resource. The average operatingcost at year 6 will increase to US$8.73/t of ore. Gold recovery and productionin year 6 is projected to be 80.80% and 112,200 ozs Au, respectively.Key highlights from the Study are as follows:-- The Study demonstrates that the Kobada gold project is economicallyoptimized by adopting bulk mining versus selective mining. The directimplications of bulk mining are demonstrated in a substantial increasein ore tonnage and recoverable gold but with an associated decrease inthe average gold grade.-- AGG Director and Qualified Persons, Mr. Pierre Lalande, P.Geo., hasrecommended that 100% of all material excavated between the hanging walland footwall of the mineralized zone be processed in the gravimetricplant as lateritic deposits containing coarse free gold result in astrong "nugget effect". It is this characteristic, due to weathering,that makes Kobada amenable to utilizing gravity for gold recovery. Mr.Lalande contends that the increase in sampling density of drillingduring grade control of mined deposits in West Africa often turns much"in ore waste" of feasibility study estimates into incremental ore.-- The geological and in-pit resources that are detailed in this study areonly projected to a vertical depth of 160 meters versus the projecteddepth of 260 meters in AGG's 43-101 compliant Initial Resources Estimatethat was published in May of 2008. This amendment reflects AGG's primaryfocus on the oxidized horizon of the deposit. Therefore, most of thevolume of the sulphide resource that was included in the May, 2008Initial Resources Estimate is not included in this Study.Base Case Economics - US$1,100 oz Au, 5% Discount Rate--------------------------------------------------------------------------IRR Pay Back Net PresentEQUITY (%) Period Value $(M)--------------------------------------------------------------------------50% 90.6 14 months $216.9--------------------------------------------------------------------------Summary of Capital Costs (CAPEX)----------------------------------------------------------------------------Description C$----------------------------------------------------------------------------Mining 34,404,000----------------------------------------------------------------------------Concentrators 30,554,760----------------------------------------------------------------------------Infrastructures and services 29,016,650----------------------------------------------------------------------------Personnel accommodations 2,100,000----------------------------------------------------------------------------Sub-Total 96,075,410--------------------------------------------------------------------------------------------------------------------------------------------------------EPCM (12.5%) 12,009,426----------------------------------------------------------------------------Miscellaneous (15%) 14,411,312----------------------------------------------------------------------------Sub-Total 26,420,738--------------------------------------------------------------------------------------------------------------------------------------------------------Total CAPEX 122,496,148----------------------------------------------------------------------------Summary of Operating Costs (OPEX)----------------------------------------------------------------------------Description C$/Year----------------------------------------------------------------------------Mining 15,122,267----------------------------------------------------------------------------Concentrators 31,411,184----------------------------------------------------------------------------Administration and services 2,591,319----------------------------------------------------------------------------Personnel accommodations 1,236,000----------------------------------------------------------------------------Sub-total 50,360,770--------------------------------------------------------------------------------------------------------------------------------------------------------Miscellaneous (15%) 7,554,116--------------------------------------------------------------------------------------------------------------------------------------------------------Total OPEX 57,914,886--------------------------------------------------------------------------------------------------------------------------------------------------------Operating Cost/t 8.27----------------------------------------------------------------------------IRR vs Operating Cost VariationThe projects sensitivity to variation in cost components is demonstrated asfollows:----------------------------------------------------------------------------Operation Cost Pay Back Net Present IRR IRR VariationVariation (%) Period (month) Value (M) (%) (%)-----------------------------------------------------------------------------25 11 $286.7 114.9 +26.8-----------------------------------------------------------------------------15 12 $258.8 105.2 +16.1----------------------------------------------------------------------------Base 14 $216.9 90.6 -----------------------------------------------------------------------------+15 16 $175.0 75.7 -16.4----------------------------------------------------------------------------+25 18 $147.1 65.6 -27.6----------------------------------------------------------------------------IRR vs Gold Price SensitivityThe project is sensitive to changes in the market prices for gold asdemonstrated in the following sensitivity analysis. US$1,100/oz Au representsthe Base Case of the Study:----------------------------------------------------------------------------Gold Price Pay Back Net Present IRRVariation $US Period (month) Value (M) (%)----------------------------------------------------------------------------$900 23 $103.2 48.8----------------------------------------------------------------------------$1,000 17 $160.1 70.1----------------------------------------------------------------------------$1,100 14 $216.9 90.6----------------------------------------------------------------------------$1,200 11 $273.7 110.7----------------------------------------------------------------------------$1,450 8 $415.8 160.1----------------------------------------------------------------------------Overall Pit Inventory, After Dilution (Metric Tonnes and Average Grade)Based on the mineralization geometry, the geology and the size of miningequipment, it is anticipated that there will be approximately 5% dilution. Thegrade of the diluting material is estimated at 0.1 g/t.----------------------------------------------------------------------------Ore tonnage before dilution (kt) 39,763----------------------------------------------------------------------------Grade before dilution (g/t) 0.67----------------------------------------------------------------------------Waste tonnage before dilution (kt) 71,195----------------------------------------------------------------------------Stripping ratio before dilution 1.79----------------------------------------------------------------------------Dilution 5%----------------------------------------------------------------------------Diluting tonnage coming from waste (kt) 1,988----------------------------------------------------------------------------Diluting grade (g/t) 0.10----------------------------------------------------------------------------Ore tonnage after dilution (kt) 41,751----------------------------------------------------------------------------Average grade after dilution (g/t) 0.64----------------------------------------------------------------------------Waste tonnage after dilution (kt) 69,207----------------------------------------------------------------------------Stripping ratio after dilution 1.66----------------------------------------------------------------------------Rate of ProductionThe mine production rate was estimated from general experience and fromgeneral reference books.----------------------------------------------------------------------------Ore (t) 41,750,896----------------------------------------------------------------------------Waste (t) 69,206,672----------------------------------------------------------------------------Total (t) 110,957,568----------------------------------------------------------------------------Expected Mine Life (years) 6----------------------------------------------------------------------------Expected Daily production (Ore) (t) 20,000----------------------------------------------------------------------------Stripping ratio 1.66----------------------------------------------------------------------------Expected Daily production (Waste) (t) 33,152----------------------------------------------------------------------------Expected Daily production (Ore and Waste) (t) 53,152----------------------------------------------------------------------------Geological Resources Estimate From Surface To 160 Meters Vertical DepthThe resources estimate reported in this Study are calculated from surface to avertical depth of 160 m as compared to AGG's 2008 initial resources estimatethat was calculated to a vertical depth of 260 m. As previously stated, thisamendment reflects AGG's primary focus on the oxidized horizon of the deposit.Therefore, most of the volume of the sulphide resource that was included inthe May, 2008 Initial Resources Estimate is not included in this Study.The horizontal polygon block method was used for this Study and a total ofeight (8) horizontal plans were generated from drill data with polygonvertical influence set to a distance of 20 m between plans. The grade of 0.1g/t Au is used to define the mineralized envelope of the deposit. The specificgravity used is 1.9 g/m(3), which represents a 30/70 compromise between quartzat 2.5 (used by WGM) and saprolite at 1.6 (AGG internal test report fromtrenches). The geological interpretation was projected to the bottom plan.This means that the average block size and grade for the 380 level representsthe block from 380 m to 400 m. The same will apply for the pit design.----------------------------------------------------------------------------Levels Cut (g/t) Tonnage Grade (g/t) Ounces Au Categories----------------------------------------------------------------------------240-400 0.1 71,211,336 0.48 1,093,000 Resources----------------------------------------------------------------------------240-400 0.3 36,133,759 0.77 893,000 Resources----------------------------------------------------------------------------240-400 0.5 19,167,747 1.12 689,000 Resources----------------------------------------------------------------------------Pit ParametersThe parameters of the proposed pit are dictated mainly by the wall geometryand the production rate. The wall geometry depends on the geotechnicalbehaviour of the rock. A geotechnical study will be undertaken as part of aFeasibility Study, which is currently underway. The assumptions used in thisreport are based on the geology. The planned pit will have a depth of 160 m,in a saprolitic formation which does not require blasting. Weathering canaffect the wall angles.From the available information, it is suggested, prior to the results of ageotechnical study, to consider the following configuration:-- bench height: 10 m-- ramp width: 18 m-- ramp grade: 10%-- berm width: 5 m-- berm frequency: every 20 m;-- minimum working space required: 50 m;-- bench face angle: 71 degrees.-- Overall pit angle: Overall pit angle taking into account berms and oneramp access is approximately 36 degrees."The economics associated with our Kobada gold project are outstanding. I havein excess of 30 years of working experience in West Africa and haveparticipated in the development of numerous lateritic deposits, of which seven(7) are now in production. My experience has taught me that increasing: 1/sampling density; 2/ sample support or weight; 3/ aliquot or the amount ofmaterial actually analyzed, are strongly beneficial to increasing in situ goldcontent. The historical records indicate that Kobada was originally analyzedusing 15 g to 30 g fire assay (FA) for gold content analysis. AGG acquiredKobada in 2006 and commenced its sample analysis program using 50 g fire assay(FA50). AGG submitted a total of 4,280 samples to dual analysis in the 2006and 2007 core drilling program. Screen fire assay (SFA) of 1,000 g aliquotreported 11% higher gold content when compared to the same sample analyzedusing FA50. In 2009, I managed a RC drill program that was fully funded by anarm's length company. This company was sufficiently intrigued to investigatemy hypothesis that Kobada gold could be recovered using a gravimetric recoveryplant alone. RC drilling generated a larger sample support and aliquot versushistorical core and rotary air blast drilling. I recommended analyzing using asignificantly larger 2,000 g aliquot by Leachwell analysis versus thehistorical 15 g, 30 g and 50 g FA and 1,000 g SFA. My RC drill program usingLeachwell analysis increased the gold grade by 31%. As part of the overallprogram, I recommended metallurgical testing be conducted on a 287 kg RCcutting composite made up from 127 samples derived from 8 distinct RC drillholes. The metallurgical tests included desliming, followed by both gravityand, separately, cyanidation of the deslimed portion. The deslimed portion hada gravity recoverable gold grade of 4.28 g/t Au from a 10 kg aliquot whileduplicate 50 g FA aliquots of the same portion gave 1.07 g/t Au. Based on myexperience, I state with confidence that Kobada will become a producing minein the near future and I predict it will be a highly profitable, low cost,gravimetric operation," states AGG Director, Pierre Lalande, P.Geo.Qualified PersonThe Preliminary Economic Assessment was prepared by Bumigeme Inc. under thesupervision of Florent Baril, P. Eng. who is a "qualified person" under thestandards set forth in NI 43-101. Mr. Pierre Lalande, P.Geo, AGG Director isthe Company's designated Qualified Persons for the purposes of the Study. Allparties have reviewed and approved their respective content of this pressrelease.Publication of the StudyThe Study was originally prepared in French and is currently being translatedinto English. AGG intends to make the Study available on SEDAR upon receipt ofthe final English version.African Gold Group, Inc., based in Toronto, Canada, is engaged in theidentification, acquisition and exploration of prospective gold projects thatare situated along significant gold trends within West Africa. To date, theCompany controls a total of eleven gold concessions that are consolidated infour distinct stand alone exploration projects. Three of these projects arelocated in Ghana and one project (Kobada) is located in Mali, West Africa.Additional Information is available on the Company's website atwww.africangoldgroup.com and on www.sedar.com and through the Company'soffices at: Sun Life Financial Tower, Suite 2518, 150 King St. West, Toronto,Canada M5H 1J9On Behalf of the Board:Michael A. J. Nikiforuk, President, DirectorFOR FURTHER INFORMATION PLEASE CONTACT:African Gold Group, Inc. Michael A. J. Nikiforuk (416) 644-8892 ext 101info@africangoldgroup.com www.africangoldgroup.comThe TSX Venture Exchange has not reviewed and does not accept responsibilityfor the adequacy or accuracy of this release.