PGXPF Pelangio Exploration Inc (PK)

Steven Ralston, CFA

Pelangio now owns 100% interest in Manfo property in Ghana

Pelangio Exploration (PX.V: TSX-V and PGXPF: OTCBB) announced that it has acquired a 100% interest in the Manfo Property in Ghana. Having made option payments totaling $435,000, along with $2,000,000 in work expenditures, the title to the Manfo Property will be transferred to Pelangio after approval of the Minister of Lands and Natural Resources. The property is subject to Ghana’s legislated 10% carried interest upon commencement of mining operations.

During 2010, Pelangio completed a first phase 2,379 meter diamond drilling program at Manfo and began a 10,000 meter second phase program, which has been since expanded to 25,000 meters. The high-grade near-surface mineralization was assayed from Pokukrom West in 2010 and high-grade gold mineralization continues to be encountered in 2011. The drill results in 2011 at Pokukrom East increased the strike length of low-grade gold mineralization to 660 meters versus prior indications of 400 meters; the estimated vertical depth continues to be 175 meters. The results at Nfante West in 2010 indicated the potential for bulk tonnage gold mineralization, which was confirmed and expanded by additional step-out drilling results in 2011.

During the second half of 2011, Pelangio will continue the Manfo exploration program with extensive diamond drilling. In July, a second drilling rig was added, expanding the ongoing drilling program. With two rigs turning, management plans to add a third in the fall. Also, an initial non-resource National Instrument 43-101 report on the Manfo Property should be completed during mid-2012 with the aid of SRK Consulting.

In less than one year on the Manfo Property, Pelangio has made four near surface discoveries at Pokukrom East, Pokukrom West, Nfante East and Nfante West. The aggressive drilling program is designed to expand the identified zones both along strike and at depth.

We reiterate our Outperform rating based upon the attractive valuation level of the stock and the expectation of continued announcements of drilling results, both at Manfo and Obuasi, throughout 2011. Our target is $1.00.
 

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