OBOTAN GOLD PROJECT - ASANKRANGWA GOLD BELT

The Obotan Gold Project, the Company's flagship project in Ghana, is located within the northern 15km of the 70km strike length of contiguous concessions which the Company holds in the Asankrangwa Gold Belt. The project comprises four known deposits - the larger Nkran deposit, and the smaller satellite deposits at Abore, Adubiaso and Asuadai.

The Obotan Gold Project was previously operated by Resolute Mining Ltd and closed in 2002 after producing a total of 730,000oz at an average grade of 2.2g/t gold when the gold price averaged approximately US$350/oz. As a result of this past mining history, the project has been considerably de-risked with respect to environmental and social permitting, metallurgy and process engineering and infrastructure development.

In June 2011, PMI appointed international engineering and consulting groups including GR Engineering Services, SRK Consulting, Knight Piesold Consulting and CSA Global to undertake a Pre-Feasibility Study with the view of reactivating a mining and processing operations at Obotan. The Pre-feasibility Study has been completed and was released on January 12 2012.

As part of this Study, the Company has conducted a major in-fill and extensional drilling program to further delineate and evaluate the mineralisation. Results to date have been excellent, confirming extensions to the Nkran deposit up to 400m below the current open pit. Results have included 153m @ 2.37g/t Au and 80.1m @ 7.49g/t Au, with drilling indicating that the mineralisation at the Nkran deposit remains open at depth and along strike to the south.

Visible gold is a common feature of the mineralisation at Obotan, with, for example, free gold noted in multiple areas in hole NKR10-031 from 306.65 to 327.51 metres.


NI43-101/JORC Compliant January 2012Pre Feasibility Study Completion

PMI Gold released its Pre-Feasibility Study (PFS) results for the Obotan Gold Project and NI43-101/JORC compliant Maiden Mineral Reserve estimate in January 2012. The Pre-Feasibility Study report has been prepared by GR Engineering Services Limited based on work by the following independent international consultants:

• CSA Global ("CSA")
• Knight Piésold Consulting ("KPC")
• SRK Consulting ("SRK")
• BizGeo Company ("Bizgeo")

The report summarizes the geology, mining and mine production schedule completed by SRK; metallurgy, process plant, design, infrastructure design, capital and operating cost estimates and financial modeling completed by GRES; the tailings storage facility design completed by KPC and the baseline environmental and sociological evaluation completed by Bizgeo.

The PFS has been completed to a +25/-25% level of accuracy based on a production profile of processing 3.0Mtpa of ore for 10 years.

Please click here to access a copy of the announcement.


Mineral Resource Estimate

As part of the PFS, PMI Gold retained SRK Consulting of Perth, Australia to complete an independent estimation of the mineral resources for the four gold deposits (Nkran, Adubiaso, Abore and Asuadai) that make up the Obotan Gold Project. SRK's interim resource estimate was independently reviewed by by Optiro Pty Ltd, as part of PMI's technical quality assessment and control, with Optiro confirming results were consistent and acceptable for the style of the deposit. The SRK interim NI43-101/JORC compliant resource estimate is shown below using a 0.5g/t gold cut-off:

Mineral Resource (inclusive of Mineral Reserves)	Tonnes (millions)	Average Grade (g/t Au)	Gold Contained ('000 ozs)
Measured	14.67	2.66	1.22
Indicated	27.50	2.32	2.00
Subtotal M+I	42.17	2.40	3.22
Inferred	17.54	2.35	1.29

The Obotan resources remain open at depth and offers potential for strike extension which are being tested by ongoing infill and extensional drilling. Results received from further drilling will be incorporated into the anticipated resource upgrade due in Q1, 2012.

Please click here to access the announcement on the SRK Obotan resource estimate released in October 2011.


Mineral Reserve Estimate Used in the Mine Plan

Based on the positive outcome of the PFS, a portion of the current Mineral Resource has been upgraded to Mineral Reserves. Only Measured and Indicated Mineral Resources were included in the mine plan for the study.

The reported Reserve estimate is shown in the following table:

Reserve Classification	Tonnes (Millions)	Au (g/t)	Au ozs (Millions)
Proven	14.0	2.36	1.06
Probable	16.3	2.28	1.20
Total Proven + Probable	30.3	2.32	2.26

Mine reserves based on gold price of US$1300, and grades and tonnes have been modified by 95% mining recovery and an allowance of 5% for mining dilution included.

The results of the PFS and strong economics of the proposed development provides a strong foundation for the definitive Feasibility Study on the Obotan Project, which is already underway and targeted for completion by the end of June 2012, paving the way for a development decision in the September 2012 Quarter.


Key Development Milestones at Obotan

Key development milestones for the Obotan Project are set out below:

• First class Pre-Feasibility Study team appointed with target completion of pre-feasibility study by end-December
• Interim resource estimate released in October 2011. Pre-Feasibility Study released January 2012
• Maiden reserve released January 2012
• Feasibility resource estimate due Q1 2012
• Target mining approvals, final feasibility study and development decision by mid-2012
• Gold production targeted for late 2013