a $500,000 entry fee, payable on signing of the Foundation Agreement (paid by ABU in March 2003); $800,000 for the tangible assets, payable upon the signing of the Accord de Cession (paid by ABU in March 2003); $1,200,000 for the reserves, payable in instalments, with $300,000 payable on signature of the Deed of Transfer (paid by ABU in March 2003), $300,000 payable at the end of the first year after signature of the Deed of Transfer (paid by ABU in February 2004) and $600,000 at the end of the second year after signature of the Deed of Transfer (payable in February 2005 for which an extension to June 2005 was granted, and payment was made in May 2005). 
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April 7th, 2003
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Mine Permit was issued by the Government of Cameroonian
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Gold mineralization in the BMS Gold Mine is predominantly within flat dipping quartz veins that make up approximately 80% of the resource tonnage, with the remainder of the resource occurring within stockworks, situated within metasedimentary rocks centered on a diorite stock and a small amount from tailings. The quartz veins vary in thickness with an average of 1.0m. The veins lie on average 30m apart with the country rock generally unmineralized.
The BMS gold deposit was explored in the period 1962 to 1982 by two Cameroonian national companies with Soviet technical assistance. Extensive exploration by diamond drilling was completed over a number of years. The deepest vein intersection is 600m below surface. Production commenced in 1985 and a total of 227,000 tonnes of ore were treated at an average head grade of 13 g/t to produce 81,800 ounces of gold by August 1991 at a recovery of 86%. The technical and financial resources were withdrawn in 1991 from the BMS Gold Mine with the break-up of the former Soviet Union, and the mine was placed on care and maintenance.
After the acquisition by ABU Gold, in late 2002, the existing plant and infrastructure was upgraded. A contract was awarded to design and procure the new equipment for the gold plant and underground infrastructure. Work commenced on site in the first quarter of 2003.
The two existing winders were upgraded with larger motors and modern control systems. New underground water pumps were installed on the 100m level. The existing underground power system was replaced with new electrical substations, power cables and distribution systems. New mining equipment such as locomotives, winches and drilling equipment were purchased and installed.
The gold plant crusher and gravity sections were upgraded with a secondary crushing circuit, a Batouri gravity concentrator and gold room equipment. The existing ball mill was refurbished. All existing electrical equipment was replaced with modern sub stations and distribution systems.
The capacity of the existing tailings dam was increased by raising the wall of the facility by 4 metres. The existing air compressors were replaced with two Atlas Copco units.
Mine operation commenced in January 2004 with first gold production in March 2004.
Mining Operations
The BMS Gold Mine recommenced production in January 2004. Gold production to date is shown in the following table.
Note:
(1) In 2004 4,604 tonnes of coarse sand at 4.7 g/t are included in the total production. (2) In 2005 4,614 tonnes of coarse sand at 4.9 g/t are included in the total production (3) In 2006 3,627 tonnes of coarse sand at 5.8 /t are included in the total production (4) In 2011 an additional 250 ounces was recovered from the mill when the mill liners were replaced.
Mine Development
The mine is being developed to provide sufficient exposed ore reserves to meet the planned production rate of 60,000 tonnes per annum in 2009. The majority of the ore reserves lie between 100m and 300m below surface. The existing No 1 shaft is operational down to 100m below surface and is being used to hoist ore from stoping areas that are being mined down dip from the 100m level. During 2004 and 2005 some ore reserve blocks above the 100m level were also mined.
No 2 shaft is located approximately 300m to the west of No 1 shaft. No 2 shaft was deepened to 195 metres below surface. Haulage development on the 150 and 180 levels will be developed from No 2 shaft to access new ore reserve blocks during 2006 and 2007.
These ore reserve blocks are located 300m north and 250m south of the two shafts.
The current mine plan anticipates that in 2008 all the ore from the mine will be hoisted to surface via No 2 shaft and will be trucked to the plant located adjacent to No 1 shaft.
Shaft Infrastructure
Access to underground workings is established through two shaft systems (referred to as No 1 Shaft and No 2 Shaft). Both shafts are 3 m in diameter. No 1 Shaft is developed to 105 Level, a depth of 105 m, with an additional 5 m overrun. A single drum, licensed winder fitted with a 1.5 tonne capacity kibble is used for the transport of men, material and rock. The total rated hoisting capacity of the shaft system is approximately 5,000 tonnes per month. This shaft is not used for rock and men hoisting since 2007
No 2 Shaft is currently the main production shaft. The current shaft bottom is 180 m Level (180 m below surface), There are 2 haulage levels on 150 and 180 from No 2 shaft to the ore veins located north and south of the shaft.
The ventilation of the mine workings is currently conducted with No 1 Shaft as a ventilation intake and No 2 Shaft as the exhaust shaft. Underground fans ensure adequate ventilation flow into the relevant workings.
No 1 Shaft is located at the plant and hoisted ore is fed directly to the plant feed bin. Ore is hoisted from No 2 Shaft and transported to the gold plant by truck. A conveyor has been installed to feed the ore from No 2 Shaft into the existing plant crusher system.
Mine Layout and Design
Level development is established from the shafts to access the ore bodies. Drives are developed within the ore body to expose the mineralisation on strike. Raises and winzes are then developed to expose the dip extent of the mining blocks. Each block of ground, delineated by the planned production from a single raiseline, is referred to as a stope. Individual panels are established from the raiseline and mined on strike to the mid point between raiselines. Systematic pillars will be left to provide roof support leading to a loss of approximately 20% when converting resources into reserves.
Approximately 60% of the ore reserve to be mined in the current mine plan is located to the north of the existing underground infrastructure and between the 105 and 300 Levels. The ore between 105 and 180 Level will be accessed from No 2 Shaft. The shaft is be deepened and two additional levels (150 and 180) will be established.
Mining Method
Stoping operations are conducted with conventional pneumatic handheld rock drills with airless. Blasted rock is scraped (with a 35 kW face winch) from the working face into strike gullies located at the bottom of each panel. A larger, 55 kW gully winch it then used to scrape the ore along the gullies. This ore is scraped directly into the hoppers via a chute arrangement, referred to as a‘chinaman chute’ or into a rock pass down to the haulage. The 1.2 tonne hoppers are trammed with 3 tonne battery locomotives to the shaft. Production blasts produce a 0.9 m to 1.2 m face advance.
Level development is conducted with a similar system as the stoping. The planned advance is 1.5 m per blast. Blasted rock is loaded using pneumatic overhead loaders (LM36-type) which load directly into the same hoppers and trammed to the shaft.
All level transport is rail bound. The hoppers are guided to the shaft and manually tipped to discharge directly into rock passes and then into the shaft loading box for hoisting to surface. A skip with a 2.5t payload is installed in bo No 2 shaft
Geotechnical Design
Based on previous and more recent underground observations, the base of oxidation appears to vary between 100 and 70 Level. No underground mining operations are planned above 70 Level. Ground conditions generally appear good below the weathered zones, with competent ground and limited need for systematic support in development ends.
Large exposed spans underground will require systematic support. In-stope support generally consists of wedged timber props. The use of in-stope pillars forms part of a detailed geotechnical investigation, following which SOMIKA reported that it has implemented the design recommendations.
Drives developed in the ore body require stability pillars up dip and down dip until stoping has been completed. Subsequent extraction of these pillars is possible (at least in part) but has not been planned.
Utilities
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