Name and Location
Obotan gold project, Ghana.

Client
PMI Gold Corporation, through its wholly owned subsidiary Adansi Gold Company.

Project Description
Comprising four deposits – Nkran, Adubiaso, Abore and Asuadai – Obotan is one of the premier emerging gold production assets in Ghana.

A feasibility study completed on the Obotan project has confirmed the financially and technically robust mining operation.

The project has proven and probable reserves of 34.2-million tonnes at 2.21 g/t for 2.43-million ounces of gold.

The feasibility study envisions the development of an openpit mining operation, with a life-of-mine production of 2.26-million ounces of recovered gold over an initial 11.5-year production life.

Value
Preproduction capital is estimated at $296.6-million.

Duration
Not stated.

Latest Developments
In the quarter ended September 30, 2013, PMI started a comprehensive project review on Obotan to assess the geological and resource models, reduce forecast capital and operating costs, and consider alternative funding options.

The aim of this review is to identify opportunities to develop Obotan so that it requires less project debt and equity capital than previously proposed to increase ultimate returns to shareholders. Potential capital cost reductions could be realised through an ongoing review of capital and operating costs, but the greatest opportunity could be to defer some or all of the $82.2-million capital expenditure required to prestrip the Nkran pit. This may be achieved through the continued assessment of Dynamite Hill, the exploration of Dynamite Hill lookalikes in close proximity to the proposed processing plant at Obotan and the re-engineering of the current pits and the staging of the cutbacks.

A process to update and reprice tenders for the construction and mining contracts are under way and tenders are expected to be received and assessed in the December quarter.

Separately, but in parallel to the project optimisation work at Obotan, PMI has been considering alternatives to the conventional project debt and equity funding model, including the a joint venture partner for the project. Several parties are undertaking due diligence on Obotan and this funding model will continue to be assessed in parallel with the company’s broad project review and discussions with potential project lenders.

PMI expects to complete its review of Obotan in early 2014. Until then, no firm indication of timing can be provided.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Discussions with project lenders have been suspended while PMI conducts its review to optimise Obotan. Discussions are unlikely to restart until early-2014. As a result, previous projections on the proposed start date for development are unlikely to be realised.

Contact Details for Project Information
PMI Corporation, tel +61 8 6188 7900 or fax +61 8 9321 8881.