EXPLORATION ACTIVITIES

Exploration within the Loulo region continued to highlight the potential for further extensions to the known orebodies as well as identifying new deposits.

Drilling at Yalea concentrated on delineating the high grade zone as well as testing the northern and southern extensions of the orebody.  Borehole YDH256 at 4.15 metres at 6.48g/t confirmed the presence of economic mineralisation below and to the north of our existing scheduled levels.  At Loulo 0 an exploration programme to test the strike extensions of the orebody was successful, with hole L0CP66 returning 22.6 metres at 8.2g/t located 600 metres south of the existing wireframe.  Two rigs have been mobilised to Loulo 0 to further test high grade extensions to the orebody at depth.

On the Loulo permit at the Faraba target, 26 RC holes for 3 385 metres completed the first phase of reconnaissance drilling and confirmed bedrock mineralisation over a 2.7 kilometre strike length. Results received during the quarter include: FARC002 - 39 metres at 2.15g/t including 3 metres at 7.8g/t; FARC008 - 51 metres at 2.26g/t including 3 metres at 12g/t; FARC010 - 109 metres at 0.77g/t, FARC030 - 49 metres at 1.27g/t; FARC031 - 25 metres at 1.46g/t including 4 metres at 3.7g/t; and FARC032 - 27 metres at 1.25g/t including 2 metres at 6.28g/t. Mineralisation is developed within a north-south shear zone associated with tourmaline-iron carbonate-silica alteration, and disseminated pyrite and arsenopyrite. A four hole diamond drill programme is underway as a preliminary follow-up to the RC drilling.   The first hole (FDH04) drilled in the north of Faraba below FARC030 and FARC031 returned 12.6 metres at 4.03g/t from 225.3 metres.

At P64, additional results have been received from the first phase of drilling and include: P64RC03 - 7 metres at 1.47g/t and 4 metres at 1.03g/t; P64RC04 - 29 metres at 1.03g/t including 2 metres @ 8.80g/t and 5 metres at 4.18g/t; and P64RC07 - five metres at 2.31g/t. Diamond drilling is currently in progress.

At Selou to the South of Loulo, the Boulandissou target is returning positive trench results (BNT02: 28 metres at 3.31g/t) along an eight kilometre anomalous shear corridor. While at Sinsinko a broad low grade mineralised envelope has been defined over a 1.3 kilometre strike length (trench BET05 returned 76 metres at 0.83g/t). Reconnaissance diamond drilling is planned during the next quarter.

At Sitakily, eight diamond holes for 1 407 metres were drilled, testing three sub-parallel corridors of porphyry dykes. The results, in general, returned narrow low grade (less than 1g/t) gold intercepts, apart from SDDH002 which returned 6.60 metres at 115.50g/t associated with visible gold in a 1 centimetre quartz vein. RC drilling is planned to follow-up this intersection.

At Morila, the 40 000 metre regional drilling programme commenced and has initially concentrated on the extension of the high grade axis approximately one kilometre to the southwest of the pit. Mine infrastructure including waste dumps limits closer access. Results return a broad halo anomalous in gold, similar to the footprint around the Morila orebody within which locate higher grade intercepts including REG003: 4.43 metres at 34.89g/t. The style of mineralisation, alteration and structural setting are similar to the main deposit. The drilling is currently widely spaced ~250 metres by 500 metres.

In South Mali, a 3 000 metre regional diamond drilling programme has been approved to cover permits in the Morila region and test a range of targets, while providing essential structural information across the area. In particular the holes will test areas where there are either shallow dipping foliated sediments or broad open folds. In addition a 3 000 metre aircore drilling programme is underway testing 11 targets on the Diamou and Seriba-Sobara permits which are part of the OMRD Diamou joint venture agreement.

The company is speeding up the evaluation of targets in Senegal, which currently stand at 34.  A 6 000 metre RAB contract has been signed and is due to commence shortly, testing seven targets. Diamond drill motivations are being prepared to further test Bambaraya, where 800 metres of bedrock mineralisation have been defined by trenching, and Sofia, a plus three kilometre anomalous structure, as well as new targets: Mansa, Deliya, Matiba and additional targets which are currently being defined.

In Burkina Faso, trenching on the Kiaka North target has defined a very broad, low grade envelope of bedrock mineralisation over a one kilometre strike length.  Trench results include: KAT03 - 36 metres at 0.94g/t (including 20 metres at 1.25g/t), 88 metres at 0.86g/t (including 10 metres at 1.92g/t), 20 metres at 4.89g/t (including 10 metres at 9.07g/t) and 10 metres at 0.97g/t;  and KAT04 - 56 metres at 0.82g/t (including eight metres at 1.12g/t) and 52 metres at 1.14g/t (including eight metres at 2.63g/t).

Early stage exploration has commenced on the newly acquired portfolio of permits in Ghana.  On the Central Goldfields permit, a stream sediment sampling programme has returned anomalous gold values along a seven kilometre segment of a regional shear, developed at the contact between sedimentary and volcanic rocks.

In the Côte d'Ivoire a team is on the ground in Korhogo and at the Tongon project site, preparing for a 2 000 metre diamond drill programme.  A rig has been sourced and drilling is planned to start in early June.  The team is currently supervising maintenance on the Korhogo office and Tongon field camp and drill platforms are being prepared.  Elsewhere in the Côte d'Ivoire, two new permits in the south of the country have been granted and early phase reconnaissance exploration work has commenced. The Apouasso permit (1 000 km2) locates on the extension of the Sefwi Belt from Ghana, along strike from Newmont's Ahafo project. The Dignago permit (1 000 km2) locates in southwest Côte d'Ivoire on a major regional structure at the contact between basement gneisses and Birimian volcanics.

A four hole reconnaissance diamond drill programme has been completed at Kiabakari in Tanzania.  This programme provided detailed information on bedrock geology, structure, alteration and mineralisation to enable a better understanding of the Kiabakari system.  The drilling indicates a wide zone of heterogenous deformation in gabbro and along more discreet mylonite zones in mafic volcanic units.  The sulphide alteration and deformed zones observed in the core indicates a large hydrothermal system.  A best intercept of 12 metres at 3.29 g/t was returned.  In addition, two new zones were identified north of the known mineralisation.