Measured and Indicated resource of 68.92 million tonnes averaging 1.73 grams per tonne gold for 3.83 million ounces, and - Inferred resource of 22.23 million tonnes averaging 1.75 grams per tonne gold for 1.25 million ounces.
The revised resource estimate, based on a cut-off grade of 0.8 grams per tonne of gold, was prepared using the same information used to compile the previous resource estimate at Esaase (see news release with Pre Feasibility Study results dated September 22, 2011 at www.keeganresources.com) which was stated at a cut-off of 0.4 grams per tonne of gold. The purpose of revising the resource was to serve as a basis for a revised Pre Feasibility Study ("PFS") which will incorporate a change in open-pit mining methods to selectively mine at lower rates and higher grades than the September 2011 PFS.
Shawn Wallace, President and Chief Executive Officer of Keegan, said, "We are very pleased with this positive step forward. The revised resource validates the approach that, after much consideration, we have undertaken in re-engineering the Esaase project. The deposit, like many Ghanaian gold deposits, lends itself to selective mining and the mine plan for the revised PFS will feature a significantly higher mill feed grade than our previous mine plan. With a capital cost for the project of approximately $260 million and our cash balance of $188 million, we are well positioned to rapidly move forward and advance the Esaase project to production.
"We are looking forward to the results of our revised PFS which will be complete in early 2013. The company has also initiated efforts to recruit a multidisciplinary suite of individuals to help strengthen our team with the requisite experience in mine building and operation for the rapid development of a highly profitable new gold mine in Ghana, the most desirable location in West Africa."
The mineral resource estimate was completed by Minxcon Pty Ltd. ("Minxcon") of Johannesburg, South Africa and reported in accordance with National Instrument 43-101 requirements and the South African Code for Reporting of Exploration Results (SAMREC) which is consistent with the CIM Estimation Best Practice Guidelines in Canada. The resource estimate was prepared by Charles J. Muller, B.Sc. Geology (Hons), Pr.Sci.Nat., MGSSA, a Director of Minxcon. An updated NI 43-101 Technical Report will be filed on SEDAR at www.sedar.comon or before November 23, 2012.
A preliminary open pit optimization was run on the estimated grade model to support the requirement that Mineral Resources have reasonable prospects for economic extraction. The resource estimate assumes a long-term gold price of $1,150 per ounce, consistent with the gold price assumption made in the September 2011 PFS. All production and technical parameters assumed for the revised estimate were based on work completed by DRA, a Johannesburg based engineering consultant, as part of a Conceptual Study completed in August 2012 and outlined in a news release dated September 6, 2012 available at www.keeganresources.com.
The table below represents the mineral resource at the 0.8 grams of gold per tonne cut-off as well as at several additional cut-off grades which are provided for comparison purposes. The effective date of the resource is October 10, 2012 and the resource includes all drill results as at March 31, 2012.
| Cut-Off | Resource | Tonnes | Gold
Grade | Gold
Ounces |
| Au g/t | Category | (Mt) | (g/t) | (Moz) |
| 0.4 | Measured | 30.14 | 1.27 | 1.23 |
| Indicated | 98.99 | 1.17 | 3.73 |
| Total M&I | 129.13 | 1.19 | 4.96 |
| Inferred | 49.39 | 1.11 | 1.76 |
| 0.6 | Measured | 23.38 | 1.49 | 1.12 |
| Indicated | 71.25 | 1.44 | 3.29 |
| Total M&I | 94.63 | 1.45 | 4.41 |
| Inferred | 33.59 | 1.40 | 1.51 |
| 0.8 | Measured | 17.52 | 1.75 | 0.99 |
| Indicated | 51.40 | 1.72 | 2.85 |
| Total M&I | 68.92 | 1.73 | 3.83 |
| Inferred | 22.23 | 1.75 | 1.25 |
| 1.0 | Measured | 12.96 | 2.05 | 0.86 |
| Indicated | 37.60 | 2.02 | 2.44 |
| Total M&I | 50.56 | 2.03 | 3.30 |
| Inferred | 16.00 | 2.09 | 1.08 |
| NOTE: Due to rounding differences, some M&I totals may not add exactly with the Measured and Indicated figures. |
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On Behalf of the Board of Directors,
Shawn Wallace, Chief Executive Officer
About Keegan Resources Inc.