Mali

• 80% interest in two share holding agreements: Mali Gold Fields SA and Songhoi Ressources SA
• 20 prospecting permits covering more than 2,500km² in southern and western Mali, including Keniéba district
• Medinandi permit – 2007 drilling programme has defined ~500,000 Oz Au mineral resources

Mali is one of the most prospective, under-explored gold terranes in Africa. The southern and western parts of Mali are mostly underlain by lower Proterozoic, aged 2.3-1.9 billion years, volcanosedimentary and granitic terranes. These terranes collectively constitute the Birimian tectono-stratigraphic domains, and, importantly, are host to a number of significant active gold mines and known deposits. Mali has become Africa's third largest gold-producing region and boasts some of the lowest-cost gold mines in the world. To date, more than 20 million ounces of gold have been discovered in western Mali, with a focus in the Kedougou-Keniéba Inlier District. The Inlier is the host to AngloGold Ashanti and IAMGOLD’s Sadiola and Yatela mines and Randgold Resources recently commissioned the Loulo-Yalea operation which has total mineral reserves in excess of 9,9 million ounces of gold at 4.12g/t.

In southern Mali, the Morila operation has already produced over 3 million ounces of gold, and has more than 2 million ounces remaining (current reserves are at 2,73 million ounces within 3,5 million ounces resources). The Syama Mine (> 6 million ounces resources) is being brought back into production by Resolute Ltd.

Despite the recent growth in the gold mining sector, Mali is an immature mining country where modern exploration techniques have only recently been introduced. Integration of the recently flown sysmian airborne geophysics with CAG's remote sensing skills will sustain regional and target generation studies that will ultimately create a pipeline of projects that may develop into many operations.

CAG has entered into two joint ventures in Mali, namely the Mali Mining House JV and the Mani JV. These JV’s are respectively managed within the companies Mali Gold Fields SA and Songhoi Ressources SA. CAG has an 80% equity stake in both of these joint venture companies.

Mali Gold Fields SA

History

CAG and Mali Mining House (MMH) have established Mali Gold Fields for the exploration and development of gold licences covering approximately 2,650km² of the prospective Birimian Gold Belt in south and west Mali. MMH was established by members of the Malian Union Nationale des Opérateurs Miniers (UNOMIN), a collective of Malian title-holders.

Mali Gold Fields has taken ownership of the licences issued by the Malian Ministry of Mines, Energy and Water. CAG will provide the technical and financial resources required to progress the various projects. MMH will assume a 20% free-carried stake.

During 2006 and 2007, CAG finished technical appraisals of these ground holdings (there were originally 43) and has since consolidated a priority bundle of 17 permits. In this respect, fundamental geology, soil geochemistry and airborne geophysical data, augmented by enhanced satellite imagery, have been collated for each property. Follow-up work programmes for 2008 have been designed on all the properties.

Mali Gold Fields SA consists of the following permits:

CAG	Company	Permit name	Region	District	Licence Type	Area km²
Mali	GoldFields	Diossyan	South Mali	Yanfolila	ADE	250
Mali	GoldFields	Djinétoumanina	South Mali	Bagoé	PDR	250
Mali	GoldFields	Fakola_01	South Mali	Bagoé	PDR	250
Mali	GoldFields	Farani	South Mali	Yanfolila	ADE	26
Mali	GoldFields	Gouenso	South Mali	Yanfolila	PDR	190
Mali	GoldFields	Hérémakono	South Mali	Kangaba	PDR	37
Mali	GoldFields	Mandiéla	South Mali	Yanfolila	PDR	201
Mali	GoldFields	M'Tébougou	South Mali	Bougouni	PDR	160
Mali	GoldFields	Nounfara	South Mali	Yanfolila	ADE	44
Mali	GoldFields	Ourou-Ourou	South Mali	Yanfolila	PDR	26
Mali	GoldFields	Sankama	South Mali	Yanfolila	PDR	250
Mali	GoldFields	Timpola	South Mali	Bougouni	PDR	199
Mali	GoldFields	Yanfolila	South Mali	Yanfolila	ADE	355
Mali	GoldFields	Zambléna	South Mali	Yanfolila	ADE	105
Mali	GoldFields	Babara	West Mali	Kéniéba	PDR	30
Mali	GoldFields	Makounké Quest	West Mali	Kéniéba	PDR	50
Mali	GoldFields	Sérinati	West Mali	Kayes	ADE	139
						2561

ADE — Authorisation de l’Exploration / Authorisation for Exploration
PDR — Permit de Recherche / Prospecting Permit

Mineralisation

Mesothermal gold mineralisation occurs within the Birimian strata in a wide variety of styles, as a rule controlled by major and second order regional scale structures that are transgressive to the strata. Gold generally is found where rheologically contrasting rock types that have been structurally deformed providing fluid pathways from where any combination of disseminated, vein, breccia, intrusive (eg quatrz porphyry) and replacement styles may evolve. The Mali Gold Fields SA properties are located in prospective volcaosedimentary and granitic intrusive terranes that all have demonstrated regional anomalism. In particular the structural settings of mineralisation is a key factor determining and prioritising exploration targets, an expertise that CAG specialises in (see Technology). CAG has developed a regional scale predictive model for Birimian exploration, and is in the process of consolidating specific mineral rights packages over selected areas.

In Mali the challenge to locate gold mineralisation is thwarted by extensive ferricrete (laterite) cover, which mitigates the use of conventional exploration techniques. Structural interpretations using a combination of satellite imagery, airborne magnetics and radiometric surveys, and available geology provide a basis to refine regional geochemical patterns. However, ultimately detailed ground methods including geophysical surveys (IP), regolith mapping, shallow RAB and /or RC drilling at an early stage are necessary to “snag” indications of mineralisation below the cover (3-20m).

Mineral resources

Exploration is at grassroots and follow-up stages, and as such mineral resources have not been delineated on the properties yet.

2007 Exploration programme

CAG has effected follow-up ground programmes on all 17 of the properties during 2007. This work is currently being rationalised into priority follow targets for the 2008 field season (Nov 2007-July 2008). Currently 4 properties have been prioritised for Reverse-Air-Blast (“RAB”) drilling during Q1/Q2 2008.

Songhoi Ressources SA

History

On 26 July 2006, CAG entered into a joint venture with the Malian exploration company Mani SARL (Mani) to investigate three gold exploration licences in the prospective Keniéba district in western Mali. CAG will fund exploration on the properties through a joint venture company, Songhoi Ressources SA, of which CAG holds an 80% equity interest and Mani holds a 20% free-carried interest. Currently the key property of interest is Medinandi in west Mali.

Songhoi Ressources SA consists of the following permits:

CAG Company	Permit name	Region	District	Licence Type	Area km²
Songhoi Ressources	Diagounté	West Mali	Kaye	PDR	143
Songhoi Ressources	Médinandi	West Mali	Kéniéba	PDR	75
Songhoi Ressources	Bokolobi	West Mali	Kéniéba	PDR	75
					293

PDR — Permit de Recherche / Prospecting Permit

Medinandi

The Medinandi Project comprises two permits (Medinandi and Bokolobi, total approximately 150km²) situated in the southern part of the Keniéba window, roughly 40km south-west of the town Keniéba. Gold was first discovered on the Medinandi permit in 1953 by a French geologist, and even after a number of more recent exploration programmes (late 1990’s), has remained largely under-explored due to thick ferricrete (laterite) cover.

Mineralisation

The property locates over structural splays from the Senegal-Mali shear zone (SMZ), which is associated with major gold deposits in the area such as Sadiola and Loulo/Yalea. The Medinandi permit also includes similar geological packages and structures as those that host the multi-million ounce Loulo and Yalea deposits 60km to the north, although it is conspicuous with significantly more evolved intrusive rocks associated with the gold mineralisation.

The Medinandi permit is extensively covered by ferricrete (laterite) up to 6m thick. The full scope of mineralisation styles has yet to be defined, however work during 2007, coupled with regional observations indicate a predominant style of structurally controlled zones (highly deformed ultra-mylonite zones) exploiting folded rheologically contrasting lithological relationships (carbonaceous shales, grits, quartz tourmalinites, quartz porphyries and related granitic intrusives). Gold mineralisation is related to silicification, carbonation, brecciation, brittle/ductile deformation and an associated phase of sulphidation which is commonly pyrite. Alteration assemblages include silica, ankerite, albite, chlorite and sericite.

During 2007 CAG drilled 28 RC boreholes totalling 2,925m, which confirmed multiple zones of predominantly narrow (average three metres) but high grade gold mineralisation with peak assays of +100 g/t Au mineralisation. Host rocks are predominantly a metasedimentary package comprising pelites, psammites and subordinate carbonaceous shale. This package has been intruded by diorite-granodiorite, quartz-porphyry and mafic sills and dykes. The geological/structural controls are complex, but current ongoing interpretations being progressed suggest the mineralisation has been localised on limbs of recumbent folds, and significant widths formed proximal to the axial plane and/or nose of the structure. There is growing evidence of broader (+15m) zones at both the northern and southern extremities, which will be tested by future drilling

Mineral resources

CAG effected a first phase of exploration drilling from January – July 2007 on the Fadougou Main Zone and Medinandi Prospect. This programme has confirmed and advanced indications from three previous shallow drilling campaigns that generated a range of inferred resource estimates in the order of 100,000 ounces gold (Randgold Resources annual report 2001). CAG released a revised mineral resource estimate during July, 2007.CAG has undertaken a preliminary mineral resource estimate of the Fadougou main zone based on forty-two boreholes (28 current and 14 historic). Borehole intercepts and heel-toe lines were executed generally 80m apart, and geological continuity of one zone of mineralisation has been established over more than 2,500m of strike. This zone is open along strike and at depth. There are three sub-parallel zones that are also open on strike and at depth. The Fadougou Main Zone has been modeled to a depth of 120m. A wireframed model at a 1.0 g/t Au cut-off and capped at 80 g/t Au (< 97% percentile) was generated for Indicated resources, and an unconstrained solids model at a 1.0 g/t Au cut-off established for other zones . A specific gravity of 2.75 t/m3 was used in the tonnage estimate, but requires empirical ratification from diamond core analyses. The mineral resource estimate is shown below, and totals 3.45 million tons at 4.55 g/t Au for 505 koz Au.

Fadougou Main Zone mineral resources

1.0 g/t cut	Tons	Au g/t	Au Oz
Indicated	341,198	4.25	46,669
Inferred	3,111,428	4.58	458,140
Total	3,452,626	4.55	504,809

2007 Exploration programme

CAG has collated existing geological data and has planned a systematic exploration programme for the Medinandi property. Enhanced ASTER (Advanced Spaceborne Thermal Emission and Reflection Radiometer) imagery and structural interpretations, coupled with multi-element soil geochemistry and geospatial information systems (GIS) syntheses, provides the basis for target prioritisation. A number of “walk-up” drill targets have already been identified, including validation of previous drilling and inferred mineral resources. The drilling programme started early in January 2007.

The Medinandi Permit also has four other distinct surface targets delineated by previous exploration by Randgold: Tintiba, Bakalobi, Betakili and Termite. The priority follow up Rotary Air Blast (RAB) drilling targets are Tintiba and Bakalobi.

• At Tintiba two trenches, 120 meters apart, returned 14m grading 5.44 g/t gold and 8m grading 5.54 g/t gold while pits in the area returned individual gold values well in excess of 2.5 g/t, with peaks of +30g/t. The mineralisation appears to be related to narrow structures trending north 80°, with modest dips towards the south.
• At Bakolobi a north-south trending mineralised structure was identified over 700m of length. The structure occurs in sheared quartzites and porphyries. Gold grades vary between 1 and 4g/t over widths in the range of 4 to 16m.
• Although pitting on the Termite Grid prospect did not confirm the anomalous values obtained from the assaying of the termite heaps, structural controls in the area need shallow RC or RAB testing.
• Similarly regional >3g/t gold values obtained in the quartzites at Betakili could not be confirmed by the rock sampling work (35 samples collected). The regolith in the area is however marked by transport with only sporadically outcropping rocks.

CAG believes that further potential exists below areas of extensive laterite, where known regional structures are concealed. The 2008 exploration programme incorporates high resolution airborne geophysics, follow-up ground IP and a combination of RAB and RC drilling to test prospective structural targets.