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Stellar AfricaGold Provides Update on Bulk Sample Program at Balandougou Project

John Cumming, President and Chief Executive Officer of Stellar AfricaGold Inc., ("Stellar" or the "Company") is pleased to announce that preparations for Stellar's bulk sample program are on schedule and on budget.

THE BULK SAMPLE PROGRAM

All of the essential preparations for the bulk sample program including metallurgical testing, environmental and social impact study, acquisition of the pilot plant, and surface stripping and site infrastructure are either well-advanced or completed.

As previously announced, the bulk sample program will process 15,000 tons of surface oxide mineralization from the B3 Zone of Stellar's 100% owned 52 km2 Balandougou Project in Guinea where a 72 kg composite sample used for metallurgical testing returned an average grade of 3.5 g/t Au. The primary objective of the program is to investigate the suitability of the B3 oxide mineralization to gold extraction and recovery using gravity separation as the sole or primary method of gold recovery. Gravity separation is the most environmentally friendly gold extraction method because no chemicals are used in the gold extraction process. It is also the most economical solution for processing surface oxide deposits.

The B3 shear zone was first discovered by Stellar during a regional and detailed soil geochemistry survey done in 2010. A strong NW-SE trending gold anomaly approximately 1,150 metres long by 350 metres wide was outlined. The geochemical anomaly was subsequently investigated with 76 Reverse Circulation drill holes totalling 5050 metres at a 50m grid interval along an 800 metres strike length, and then by 16 diamond drill holes totalling 2,350 metres. Using an excavator, five trenches at 100 metre intervals to a depth of more than 3 metres were dug across the B3 zone, and an extensive structural analysis was undertaken by AECOM, an independent consultant, to better understand the controls of the gold mineralization.

In preparation for the bulk sample program and to qualify the B3 zone oxide mineralization for this kind of testing, the Company has initiated or completed the following:

  • Metallurgical testing of B3 oxide mineralization including a four-stage gravity separation test
  • Environmental and social impact study
  • Engineering design and construction of a 15 tons per hour gravity separation pilot plant,
  • Construction of surface infrastructure

METALLURGICAL TEST

Stellar has engaged the Metallurgy and Mineralogy Division of SGS South Africa to perform a four-stage gravity recovery test work on a 72-kilogram composite sample collected from the mineralized sections of trenches F, G and H across the B3 gold structure of the Balandougou Project in Guinea.

The pre-test head grade of the composite sample submitted to SGS was 3.5g/T Au. For the test, a 50 kilogram sub-sample was concentrated through four stages of gravity separation using consecutively smaller milling sizes. The overall gold recovery after gravity separation was 66.2% with 33.8% of the gold remaining in the gravity tails. The 33.8% unrecovered gold in the tailings is thought to be due to the presence of fine gold particles in the initial sample that were too fine to recover using only gravity separation.

To address the issue of fine gold not being recovered by gravity separation, the Company requested a bench test using cyanidation on the tailings after completion of the last stage of gravity separation to evaluate the suitability of a cyanide circuit to process the gravity tailings and increase the gold recovery. The cyanidation bench test of the gravity tailings resulted in a 91% gold recovery from the tailings over a four-hour leach period.

The combination of the four-stage gravity separation followed by cyanide leaching test resulted in a combined gold recovery of 97% of the tested head grade.

At this time Stellar does not plan to include a cyanide circuit into its bulk sample program but will store all tailings in a manner suitable for reprocessing if and when a cyanide circuit is implemented.

ENVIRONMENTAL AND SOCIAL IMPACT STUDY

In September 2016, the Company engaged the Bureau D'Études Guineen De L'Ingenierie et de L'Environnement SARL (B.E.G.I.E SARL) to conduct a Social and Environmental Impact Study, which is a pre-requisite for Stellar's Guinean subsidiary to be granted a Semi-Industrial Exploitation Licence. The Guinea Environment and Mining Code requires the completion of an environmental and social impact study for all mining projects to evaluate the effects of a proposed semi-industrial or industrial mining operation on the ecological balance and on the quality of life of the neighboring populations as well as, if necessary, propose measures to mitigate any identified adverse impacts.

Stellar is pleased to report that following all necessary local consultations and having received a positive recommendation, an Environmental Certificate of Conformity was awarded to Stellar's subsidiary MGWA-Goldenfrank SARL.

15 TONS PER HOUR PILOT GRAVITY PLANT

Stellar has engaged XKJ Solution, a branch of Henan Xingyang Mining Machinery Manufactory of China, for the engineering design and fabrication of a 15-to-25-ton-per-hour pilot plant to process the 15,000 tons bulk sample. Construction of the plant in China is underway with completion scheduled for the end of March 2017. The completed pilot plant will be shipped to Guinea by sea and the plant is scheduled to be delivered on site by the end of April.

The final design parameters and the fine tuning of the pilot plant were according to the results of the SGS Mineral Services four-stage gravity test results. The pilot plant was design with all required components including a primary and a fine jaw crushers and a ball mill that will discharge -0.2 mm size material into two Knelson Concentrators for optimal gold recovery.

SURFACE INFRASTRUCTURE AND STRIPPING

Stellar has engaged CITAG Bureau d'Ingénierie, a local Guinean engineering firm that specializes in mine construction, for the mine pit and plant site preparation and to supervise surface stripping and infrastructure construction. Subject to satisfactory completion of this first engagement CITAG may also be awarded the contract to mine the 15,000 tons sample under Stellar Supervision.

The processing of the 15,000 tons sample is scheduled to start in June 2017 and continue at a rate of 150 tons per day for approximately 4 months.

GRANT OF INCENTIVE STOCK OPTIONS

The Company has granted 300,000 incentive stock options to three consultants to the Company. The options are for a five-year term exercisable at $0.05 per share, are fully vested and are granted pursuant and subject to the Company's approved Stock Option Plan and such regulatory approvals as may be required. The consultants are engaged on a month-to-month basis and the options are subject to early termination thirty days following the end of the consultants' engagement.

Source: http://stellarafricagold.com/

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