• PEG has concluded that it is possible to selectively mine a high-grade (+15% copper) portion of the Debarwa copper supergene zone for direct shipping to a smelter (Direct Shipping Option -- "DSO") thereby eliminating the need for a process plant facility early in the mine life.

• After the DSO start-up period a flotation plant and further mine development would be required to exploit the remaining transition, supergene and primary zones at Debarwa. This longer term (9-year) production scenario further improves the economics of the deposit. After the DSO start-up period a flotation plant and further mine development Trade-off studies by PEG mining engineers have concluded that underground mining using a ramp, as opposed to using the existing vertical shaft, is the preferred method of access to the mineralized material at Debarwa.

• Recent mineralogy and metallurgical test work indicates that copper and zinc mineralization from the Emba Derho, Debarwa and Adi Nefas deposits all respond to extraction by froth flotation in a similar manner and therefore co-processing these materials in a single flotation process plant is deemed feasible. To confirm this, further tests on blended material are recommended.

• Oxide gold mineralization from all four of the deposits responds well to gold recovery by cyanidation therefore this material could be co-processed in a single central cyanide leach plant.

• PEG concluded that the development of a central process facility for both base metals and gold at Emba Derho will provide significant economic benefits for the other three deposits through capital cost synergies for items such as process plant equipment, infrastructure and tailings disposal facilities.

• In PEG's opinion the inclusion of a Dense Media Separation (DMS) ahead of the Emba Derho process plant represents a significant opportunity to improve project economics by rejecting barren dyke material prior to grinding. More detailed examination of this option is recommended for the prefeasibility study.

• Both mineralogy studies and initial flotation testing point to Emba Derho and Adi Nefas being fully compatible mineralogically . They both have typical polymetallic mineralization and are showing good response to early tests employing conventional flotation treatment schemes.

• Batch tests on the composite samples as received have indicated:
  • Emba Derho sample:
    • Copper-rich zone; 91% copper recovery to a nominally saleable copper concentrate (subject to acceptable minor element analysis). Grades of the concentrate up to 28% copper have been made and accompanying zinc grades are below what would attract significant penalties from most copper smelters.
    • Zinc-rich zone; up to 96% zinc recovery to combined copper and zinc concentrates, with indications that with further optimisation tests the vast majority of this material can be directed into a saleable zinc concentrate.
  • Adi Nefas primary sample:
    • A composite containing 3% copper and 21% zinc has been subject to two rougher flotation tests.
    • Both the copper and zinc floated extremely well, with recoveries of 97-99% to the combined copper and zinc concentrates.
    • Early evidence points to selective flotation being achievable, using a primary grind and a flowsheet that is essentially the same as Emba Derho, however no definitive recovery numbers are available yet.
  • Debarwa primary:
    • Mineralogical benchmarking suggests that the Debarwa primary mineralization is amenable to the same flowsheet as Emba Derho and Adi Nefas although this will need to be confirmed with further testwork.

This press release contains forward-looking statements about the Company and its business. Forward looking statements are statements that are not historical facts and include resource estimates. The forward-looking statements in this press release are subject to various risks, uncertainties and other factors that could cause the Company's actual results or achievements to differ materially from those expressed in or implied by forward looking statements. These risks, uncertainties and other factors include, without limitation risks related to fluctuations in gold prices; uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors; the possibility that results of work will not fulfill expectations and realize the perceived potential of the Company's properties; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold resources; the possibility that required permits may not be obtained on a timely manner or at all; the possibility that capital and operating costs may be higher than currently estimated and may preclude commercial development or render operations uneconomic; the possibility that the estimated recovery rates may not be achieved; risk of accidents, equipment breakdowns and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in the work program; and other factors identified in the Company's filings with Canadian securities regulatory authorities. Forward-looking statements are based on the beliefs, opinions and expectations of the Company's management at the time they are made, and other than as required by applicable securities laws, the Company does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances, should change.

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