VantageWire.com Add to your address book or safe list to ensure delivery of email blasts (click for instructions)  

�

INITIATING COVERAGE

Pope & Company Initiates Research Coverage On AGG: Over 1 M ozs Contained Within 100% Oxide Resource

We are initiating coverage on African Gold Group Inc. (AGG:TSX-V) ("African Gold" or "AGG"), with a Speculative BUY recommendation and a target price of $0.84/share.

Reasons to Own this Stock

African Gold is developing the Kobada property which has a 218.5 km concession in the prolific gold producing area of south-west Mali. We recommend African Gold based on the following:

Near Term Producer-AGG has the potential to begin production in 2015, and to ramp up production to 126,000 oz Au annually by 2017. Significant Increase In Oxide Resource Expected-Based on pre-2011 drilling, the Resource at Kobada is over 1 M oz Au of which more than 95% is in highly oxidized rock. In Q4/12, the Company plans a Resource update which will include 49,000 m of drilling completed since 2010. We believe this drilling will increase the Resource at Kobada by 65%. Longer term, there is potential to find significantly more gold at Kobada and in the surrounding area, providing the drilling is undertaken. Gold Grade Upside-The gold at the Kobada deposit is coarse and nuggety, which means the contained gold content is often under estimated. The development of Kobada is based on processing the oxide gold ores in a Gravity Processing Plant ("GPP") similar to the one which was recently put in operation at WassoulOrs Kodieran Mine also in Mali. Reports from Kodieran indicate that gold grade in ore processed is higher than estimated. Potential Sulphide Resource-Kobada has potential for a large gold sulphide Resource below the oxide layer. The Company has intersected gold in sulphides below the oxide Resource in many areas, but the drill density has not been sufficient to define a Resource. Exploration Upside-Besides Kobada, African Gold has a number of exploration targets (Gossokorodji, Diaban, Foroko North). Ultimately, we expect the total gold Resource, including Kobada, to exceed 5 M oz Au. Good Team-The Company has worked in Mali for many years and has personnel with experience in the development of other gold mines in Mali. The Companys management has a proven track record in the capital markets and in mining in West Africa. Good Jurisdiction-Mali is a good jurisdiction in which to develop new mines. The geology is excellent and the domestic workforce is inexpensive. The oxide deposits are near surface with good metallurgy and can be mined for the most part at a low strip ratio. In addition, the country allows permitting prior to the completion of a Feasibility Study.

Valuation and Recommendation

Our target represents a 223% upside to the current price of $0.26/share. We suggest that as African Gold proceeds to production, defines more resources and makes plans to recover gold from sulphide, we will see further upside to the stock. We therefore recommend purchase of AGG.

Click here to view the full report

Disclaimer

This report is produced entirely by Pope & Company Limited Although the information contained in this report has been obtained from sources that Pope & Company Limited believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice. Pope & Company Limited will furnish upon request publicly available information on which this report is based. In respect of the distribution of this report in Canada Pope & Company Limited accepts responsibility for its contents. To make further inquiry related to this report, Canadian residents should contact their Pope & Company Limited representative. To effect any transaction, Canadian residents should contact their Pope & Company Limited Investment advisor.

�

African Gold Group Inc.

150 King Street West
Suite 2518
Toronto, Ontario
M5H 1J9

Click to visit African Gold

as of 9:30am EST Oct 31, 2012

AGG: TSX-V              $0.26
Recommendation: Speculative BUY
Target Price:             $0.84
Risk Rating:             Speculative

Price (10/31/12) $0.26 Basic S/O (M) 115.5 FD S/O (M) 131.7 Mkt Cap (M) $30.0 Cash (M) as at 05/01/12 $1.3 Net Debt Nil Enterprise Value (M) $28.7

Company Profile:

African Gold Group is developing the Kobada gold project in Mali, West Africa. Within the Kobada Project, "Zone 1" has a NI 43-101 Inferred Resource of 1.093M oz Au. Within several kilometers of Zone 1, AGG has a number of other drill-proven targets: Termite Zone, Gossokorodji, and Fokoro North.

Management and Directors:

Michael A.J. Nikiforuk- President, Founder & Director

Marco J. Durante- Vice President, Founder & Director

Pierre Lalande- Director

Jean-Jacques Lefebvre- Director

David S. Brown, LL.B.- Director

W. Durand (Randy) Eppler, M.Sc- Advisory Board Member

    

�

Disclaimer: Vantage Communications Ltd. was paid to distribute this bulletin. Vantage Communications may or may not own securities in this particular company. THIS IS NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY! You are on this mailing list because you registered for VantageWire News. Past performance of Companies mentioned does not guarantee future performance.

If you would like to opt out click here. For more information about this service, please contact:
Vantage Communications Ltd. at 1.800.574.0901, Suite 150 - 666 Burrard St, Vancouver, British Columbia V6C 2X8, This email complies with the US Federal CAN-SPAM Act of 2003

� 2012 Copyright Vantage Communications LTD. All Rights Reserved.