October 23, 2008
African Gold Group, Inc. And Newmont Sign Agreement Allowing Newmont to Spend Up to $8 Million to Earn Up to 70% Interest in Mankranho, Ghana
African Gold Group, Inc., ("AGG" or the "Company")(TSX VENTURE: AGG) is pleased to announce that AGG (Ghana) Ltd. and Newmont Ghana Gold Limited ("NGGL" or "Newmont"), a subsidiary of Newmont Mining Corporation (NYSE: NEM) have agreed on the commercial terms of an Option Agreement and a Venture Agreement that would provide for NGGL to earn up to a 70% interest in AGG's Mankranho, Ghana concession, in consideration of NGGL's expending up to US$8,000,000 on Mankranho exploration.
The 108 sq km Mankranho concession is located in the Brong Ahafo region of Ghana and is situated at the north-eastern end of the Sefwi Gold Belt. Mankranho shares nine common borders and surrounds the northern extension of Newmont's Ahafo project on three sides. The 20 million oz Ahafo project commenced production in July, 2006 and is producing approximately 500,000 ozs Au per annum. (To view a map of the Mankranho concession please activate the link: http://www.africangoldgroup.com/s/Mankranho.asp)As per the terms of the Option Agreement, in order to earn a 51% interest in AGG's Mankranho, Ghana license, Newmont shall be required to complete exploration expenditures in the total amount of four million dollars (US$4,000,000) on or before forty-two (42) months following the Effective Date of the Option Agreement.
The ensuing terms of the Venture Agreement shall grant Newmont the right to earn an additional nineteen percent (19%) participating interest by funding an additional four million dollars (US$4,000,000) in exploration expenditures within two (2) years following the effective date of the Venture Agreement.
The Parties acknowledge that the government of the Republic of Ghana will be entitled to receive ten percent (10%) of the net cash flow from operations conducted under the Venture Agreement, and that these payments will be made by the Venture manager and paid by the Venture participants on a pro-rata basis in accordance with their respective Participating Interests at the time of payment.
"Mankranho is ideally situated to benefit from its proximity to Newmont's considerable infrastructure at Ahafo. We are pleased that we could conclude the Option and Venture Agreements with Newmont and eagerly await the results of their exploration initiatives, recognizing that NGGL's regional expertise and knowledge of the Sefwi Belt is without comparison." States AGG President, Michael A. Nikiforuk.
African Gold Group, Inc., based in Toronto, Canada, is engaged in the identification, acquisition and exploration of prospective gold projects that are situated along significant gold trends within West Africa. To date, the Company controls a total of twelve gold concessions that are consolidated in five distinct standalone exploration projects, of which three projects are located in Ghana and the remaining two are located in Mali, West Africa.
Additional Information is available on the Company's website at www.africangoldgroup.com and on www.sedar.com and through the Company's offices at: BCE Place, Canada Trust Tower, 27th Floor, 161 Bay Street, Toronto, Canada M5J 2S1.
On Behalf of the Board:
Michael A. J. Nikiforuk, President, Director
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Contacts: African Gold Group, Inc. Michael A. J. Nikiforuk President, Director (416) 572-2225 Email: [email protected] Website: www.africangoldgroup.com
SOURCE: African Gold Group, Inc.