Vital Metals Embarks on Major Gold Exploration Program in West Africa

Perth-based explorer Vital Metals (ASX: VML) has entered into a farm-in agreement on highly prospective gold exploration tenements in West Africa, presenting the company with an outstanding new opportunity.

Vital, which will also continue to progress its advanced tungsten projects in Queensland and Western Australia, has struck a farm-in agreement with Ampella Mining which will see it explore for gold in Burkina Faso.

The company can earn a stake of up to 80 per cent in Ampella’s Doulnia/Campala property, where an initial evaluation program by Ampella encountered widespread gold mineralisation when the Company was exploring for zinc in 2007-2008. Following completion of evaluation work, Vital may elect to withdraw or earn equity in three stages.

The agreement will see Vital earning a 60% equity by sole funding A$1.5 million of exploration expenditure, while the company can increase its equity to 70% by sole funding the next A$2 million expenditure.

Vital may then move to 80% equity by carrying the Project to completion of a pre-feasibility study.

The Government of Burkina Faso will retain a 10% free-carried interest, meaning Ampella will hold a 10% contributing equity stake should Vital meet the above conditions.

Vital chairman Bill Ryan said the Project represented an excellent opportunity to locate significant deposits of gold at low cost in an area now generally regarded as one of the most prospective regions for gold in the world.

"The co-operation of Ampella Mining, which has been well established within Burkina Faso for several years, in conducting this work will be of great assistance to Vital in performing the early stages of exploration in the most cost effective manner," Mr Ryan said.

"Vital will continue to develop its Australian tungsten Projects at Watershed and Mt Mulgine, notwithstanding the present depressed price of tungsten, but holds high hopes that this unique West African opportunity will add substantial value to the company and its shareholders while we await a resurgence of interest in tungsten."

The Doulnia/Campala property is located near the village of Tiebele, about 175km south of the capital Ouagadougou. It consists of two Permits (arrêtes) with a combined total area of 463sqkm. Previous exploration work in the region, mostly for base metals, has been conducted by BRGM (the French Government

Geological Survey), a small Canadian exploration company (from 1992 to 1997), Anmeracosa (a subsidiary of Anglo American plc) and Ampella. Ampella is finalising arrangements with the relevant authorities in Burkina Faso to formally add gold to the minerals to be included within the terms and conditions of the two Permits.

Ampella spent about $1.5 million exploring for zinc in 2007-2008. As announced by Ampella in the exploration announcements in 2008, this work included the excavation of four trenches which exposed multiple quartz veins in three main zones with widespread indications of gold, including an interval of 10m at 7.87 grams per tonne of gold.

Anomalous gold-in-soil values exceeding 25 ppb gold occurrences throughout a previously sampled local grid covering 7.5km long by 3km wide. These anomalous

zones indicate gold-bearing quartz veins that occur in structural zones which could possibly extend for distances ranging from 400 metres to 3.5km over widths of 50m to 250m.

Gold-bearing quartz vein material has also been exposed in artisanal workings at two localities, Kollo South and Kollo North. Several other targets, indicated by anomalous gold-in-soil values, exist outside the two known prospects and have potential to host significant gold mineralisation.

Grab sampling by Vital’s geological personnel during a field inspection of the Kollo property early in September 2009 yielded some impressive gold values including 6.73, 3.42 and 6.00 grams of gold per tonne.

Ampella is farming out the Doulnia/Campala property after enjoying excellent success in Burkina Faso, where it now has a total commitment to work on its substantial Batie West Gold Project in the south-west of the country.

The evaluation program to be carried out by Vital will include further geochemical sampling, 1500 metres of additional trenching and at least 1500 metres of RC drilling of at least two Vital Metals targets at a total estimated cost of $300,000. This work should be completed during the October 2009 to May 2010 dry season.

An operating gold treatment plant is located at Youga about 40 kilometres to the east.