African Aura Mining Inc. - Nkout, Cameroon

Introduction

The Nkout Iron prospect is located in the Company's Djoum licence in southern Cameroon. The project was identified from interpretation of airborne magnetic and remote sensing data in 2006 whilst investigating gold occurrences in the 150km long, Sangemalina-Djoum Archaean greenstone belt originally identified by the BRGM.

Current Exploration

A recently completed high resolution airborne geophysical surveys (EM and gravity) covering the company's Nkout, Ngoa and Akom iron ore projects in Southern Cameroon, has defined a major geophysical anomaly covering at least 8km of strike length. The data for Nkout suggests the presence of an east-west striking antiform with two limbs approximately 100m thick and magnetic susceptibilities of around 2.0, which is considered consistent for a prospective banded iron formation.

Figure 1: Nkout & Ngoa - Total Magnetic Intensity Map

Figure 2: Essong & Djoum Licence - Total Magnetic Intensity Map

Geology

Archive airborne magnetic data indicates a 10km long, domain change dipole interpreted as an area of highly magnetic rocks likely to host Banded Iron Formation ("BIF") targets in an Archaean setting. The Company considers that the dimensions of Nkout and surrounding hills represent a potentially economic iron deposit.

In June 2006, African Aura's 100% owned subsidiary Caminex was awarded the Akonolinga (997km²) and Djoum licences (998km²) which cover the entirety of the 150km long greenstone belt, including Nkout and a number of other targets identified by the Company.

Phase 1 Reconnaissance Sampling

In 2008 the Company collected 44 reconnaissance samples from a 3km by 3.75km area on the eastern section of the Nkout ridge, which returned a maximum grade of 65% iron, and an average grade of 54% iron. X-ray diffraction and optical microscopy show that the samples comprise mainly high grade haematite along with magnetite and goethite.

Number of Samples

% Fe

Main component

17

53-65%

Fe₂O₃

9

46-64%

Fe₂O₃ + FeO(OH)

10

36-45%

Fe₂O₃ + FeO(OH) + SiO₂

8

1-20%

SiO₂

Based on field observations and collected samples the BIF can be categorized, on the basis of their texture, into four basic types.

Massive hematite - quartz with poor banding, medium grained, hematite flakes up to several millimetres
Banded hematite - quartz, typical BIF, more fine grained then the first one
A brecciate mass with limonite groundmass and angular to sub-angular fragments of hematite
Completely oxidised BIF with visible banded structure

Phase 2 Reconnaissance Sampling & Mapping

In April 2009, the Company retained GT Exploration Services of South Africa to undertake a reconnaissance sampling and mapping programme at the Nkout project in order to define areas for initial drill testing along Nkout ridge which is co-incident with an intense, 12km long aeromagnetic dipole. Reconnaissance exploration was also completed across iron targets highlighted by geophysical data on the contiguous Akonolinga and Essong licences.

Mapping has shown that the Nkout iron project comprises several hills which form a 12km, east-west striking discontinuous ridge. A total of 191 samples were taken, the first two batches of which returned a maximum grade of 68% iron and an average grade of 55% iron, excluding five samples of granite-gneiss country rock as detailed in Table 1. These assay results extend the trace of the iron rich section of Nkout to more than 8km as well as confirming the results obtained from an initial survey announced by the Company in January 2009. Detailed X-ray diffraction and optical microscopy on these previous samples showed that they comprise mainly high grade haematite and magnetite.

Further iron prospects identified

This phase of reconnaissance mapping and sampling has confirmed four new iron prospects:

Ngoa Hill, located 3km to the south of Nkout on the adjacent 70% African Aura owned Essong licence; and
Akom Hills, being three areas to the northwest of Nkout on the contiguous 100% owned Akonolinga licence.

Ngoa is approximately 2km long and stands some 100m higher than Nkout. Its flanks are strewn with a high proportion of enriched banded iron formation ("BIF") float with haematite ± magnetite contents visually estimated between 70% and 100%.

The Akom Hills prospects cover a discontinuous strike length of approximately 20km based on interpreted airborne geophysical data. Mapping of the prospects has identified three separate BIF occurrences with a combined strike length of approximately 8km. Samples were collected over these occurrences including an outcrop of iron rich BIF.

Local Infrastructure

The town of Djoum is located 280 km SE of Yaoundé, of which 170km is macadam road and 110 km is laterite road. From Yaoundé it takes five to six hours to reach Djoum, via Sangmelina.

The Nkout prospect is strategically well situated close to existing infrastructure in a significant iron ore province which includes Sundance Resources' Mbalam iron deposit located 150km to the south east. The whole province lies within reach of the site of the proposed deep water port at Kribi on the Atlantic coast.