Vancouver, British Columbia–(Newsfile Corp. – June 29, 2021) – Central African Gold Inc. (TSXV: CAGR) (FSE: BC2) (OTCQB: NDENF) (the “Corporation” or “Central African Gold“) is pleased to announce the Corporation has completed the first stage of a planned acquisition of multiple precious and base metals projects located in the resource rich Democratic Republic of Congo (DRC). Central African Gold has entered into an agreement to acquire an interest in the Musefu Gold Project which has historical gold exploration and production.
Central African Gold has entered into an Assignment Agreement with KBG Capital Sarl (KBG) pursuant to which KBG has agreed to assign to Central African Gold 100% of KBG’s interest in an exclusive option agreement with La Societe Miniere de Bakwanga SA (MIBA) to enter a joint venture to develop and exploit the Musefu Gold Project located in Kasai Central Province in southern DRC. All shareholders of KBG are arms length to the Corporation. In consideration of the assignment, Central African Gold will reimburse supported prior expenses, assume certain non-material financial obligations and issue 8,000,000 million common shares of Central African Gold to the beneficial owners of KBG. Central African will pay a finder’s fee consisting of 500,000 common shares to arms length parties. The closing of the transaction is subject to completion of a satisfactory due diligence review by Central African Gold, other industry standard conditions and regulatory approvals including the Toronto Stock Venture Exchange.
Mr. Kevin Torudag, Senior Advisor to the Corporation, stated: “The Musefu Gold Project is a significant land package controlled by a state owned mining company. It has been of interest and had earlier work completed by well known and knowledgeable groups in the DRC mining sector. We are not aware of any transactions of this magnitude currently being completed in the DRC. The mineralization in the region is polymetallic and the property is located close to the border with Angola and rail transportation. Musefu has excellent potential for an important new discovery.”
Musefu Gold Project
The project comprises five concessions covering 924 sq kms located 315 kms south of the city of Kananga in Kasai Central Province, southern DRC. Kasai Central Province has been underexplored due to its location and the need for infrastructure expansion. Central African Gold believes the required investment in infrastructure is imminent and it is opportunistic to be an early entrant into the region with such a large tract of high potential underexplored land. Work programs completed in 2007 by a prior interest holder included acquisition and interpretation of geophysical data (Airborne Magnetics and Landsat imagery), geological mapping, geochemical soil sampling, bedrock sampling as rock chip and channel samples, trenching and trench sampling. A total of 11,107 soil samples, 66 rock chip samples and 286 channel samples were collected. The program identified several suitable structural targets and the initial results from the geochemical soil survey showed strong gold anomalism coinciding with these structures.
Twenty diamond drill holes ranging in depth from 10m to 110m were completed on one of the concessions. Historic significant intersections include:
|Hole #||From||Gold Grade g/t *|
|14||15.5m to 18m, 2.5m at||28.38g/t|
|8||8m to 13m, 5m at||12.83g/t|
|2||5m to 12m, 7m at||8.71g/t|
|1||1.9m to 13m, 11m at||8.12g/t|
* The Corporation obtained the above drilling results from an internal report prepared in 2007 by a third party who at the time had an interest in the project. This report included the above results from drilling completed in the mid 1930s. The Corporation is of the opinion the assay results are reliable and relevant, however the Corporation at this time has not completed due diligence on the assays. Additional recommended work for the Corporation would be to review any available drill and QC data in greater detail, duplicate informing sample data by perhaps twinning holes, and re-assay any available sample material. It is the Qualified Person’s opinion that there is a potentially significant risk associated with the lack of assay certificates and QC analysis and the Corporation should dedicate resources to reviewing the issue. The Qualified Person considers the risk to be acceptable however cautions investors to rely on this non-compliant historical data only as an indicator of the future potential of the Musefu Gold Project until further reviews have been completed.
It is significant that the drill hole assays have high grade zones, broader lower grade zones and multiple zones with high grades surrounded by lower grades. Central African Gold believes with significant mineralization being encountered at or near surface, the Musefu Gold Project has the potential for expansion and for lower cost open pit mining. Although gold is the focus, there are also noted historical indicators of platinum.
Qualified/competent person — National Instrument 43-101 and JORC code
The geological information in this announcement has been reviewed by Mr. Shu Zhan, Member and Registered Professional Geoscientist of the Australian Institute of Geoscientists (AIG), a competent person (as defined in the JORC code, 2012 edition) who is a practicing member of the Association of Professional Geologists of Ontario (being a recognized professional organization for the purposes of the Australian Securities Exchange listing rules). Mr. Zhan is also the Qualified Person as defined by National Instrument 43-101 who has reviewed and approved the contents of this news release. Mr. Zhan is a Director of Central African Gold. He has sufficient experience that is relevant to the style of mineralization, the type of deposit under consideration and to the activity being undertaken to qualify as a competent person as defined in the JORC code and under National Instrument 43-101.
The Corporation intends to complete a non-brokered private placement (the “Financing“) of up to 10,000,000 units (each a “Unit“) at a price of CAD $0.20 per Unit for aggregate proceeds of up to CAD $2,000,000. Each unit will consist of one common share of the Corporation (a “Share“) and one Share Purchase Warrant (a “Warrant“). Two Warrants will be exercisable into one Share at an exercise price of CAD $0.30 per Share for a period of two years from the date of issuance.
The proceeds from the Financing will be used to fund due diligence and initial work programs on the Musefu Gold Project and for general working capital purposes.
The securities issued pursuant to the Financing will be subject to a hold period under applicable securities laws, which will expire four months plus one day from the date of closing of the Financing. Closing of the Financing is subject to receipt of all necessary corporate and regulatory approvals, including approval of the TSX Venture Exchange.
The Financing may constitute a “related party transactions” under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101“) as the investors in the Financing are expected to include parties closely related to the Corporation. The related party transactions will be exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to subsection 5.5(a) of MI 61-101 and exempt from the minority approval requirements of Section 5.6 of MI 61-101 pursuant to subsection 5.7(1)(a) of MI 61-101, as the fair market value of the transactions contemplated under the Financing do not exceed 25% of the Corporation’s market capitalization. A material change report as contemplated by the related party transaction requirements under MI 61-101 was not filed more than 21 days prior to closing of the transactions as the Financing is required shortly after the terms of the Financing were finalized to be able to meet the Corporation’s anticipated short-term cash requirements.
About Central African Gold Inc.
Central African Gold is a natural resource company with a primary focus on the acquisition, exploration, development, and operation of mineral projects in the Democratic Republic of the Congo (“DRC“). Central African Gold currently holds rights to multiple mineral projects strategically located in the southern DRC. Central African Gold has the intention to acquire interests in additional concessions or relinquish concessions in the normal course of business. Central African Gold has an experienced management team located in the DRC.
For further information, please contact:
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain “forward-looking information” within the meaning of applicable securities laws including, but not limited to the Corporation’s intention to become involved in advanced stage mining projects in the DRC; the satisfactory completion of due diligence on the Musefu Gold Project; the closing of the acquisition of the Musefu Gold Project; the origin and methodology of historic assay results; the ability to use open-pit mining techniques and the completion of the announced necessary financings to fund the Corporation. Although the Corporation believes considering the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them as the Corporation can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation its securities, or its financial or operating results.