Azumah Resources Limited: December Quarter 2011 Operations Report

Mineralisation Confirmed at Aduane and Bepkong South Prospects Between Flagship Kunche and Bepkong Deposits, Wa Gold Project, Ghana

TORONTO, ONTARIO -- (Marketwire - Jan. 16, 2012) - Azumah Resources Limited (TSX: AZR)(ASX: AZM) -

Investment Highlights:

- NI 43-101 and JORC Code compliant 0.52M oz Inferred and 0.65Moz Indicated Mineral Resource at Wa Gold Project, NW Ghana

- 100% of 3,100km2 licences hosting over 150km of prospective Birimian greenstone belt. Less than 10% effectively explored

- Feasibility Study nearly completed for multi-pit, +1.0Mtpa, <100,000oz per year mining and gravity/CIL operation

- Pipeline of drill-ready targets

- Aggressive 250,000m, 2011/12 drilling programme focused on resource discovery and increase

- +15% strategic investment in neighbour, Castle Minerals Limited

- Board and management team of successful explorers, mining and corporate professionals

Issued Capital:
282.02M ordinary shares
10.25M unlisted options

Directors & Management:
Chairman
Michael Atkins
Managing Director
Stephen Stone
Non-Executive Director
Geoff M Jones
Company Secretary
Dennis Wilkins

- Best intercepts include (refer ASX release dated 6th October 2011):
14m @ 2.31g/t Au from 13m (KRC478) - Aduane
16m @ 2.34g/t Au from 23m (KRC480) - Aduane
6m @ 15.60g/t Au from 53m (BRC230) - Bepkong South

- Excellent results from Julie infill drilling com pletes planned drill-outs at Kunche, Bepkong & Julie to enable resource updates - due early February 2012. Best intercepts (nnot previously reported) include:
5.0m @ 17.82g/t Au from 34m (AJUC270A)
2.0m @ 32.93g/t Au from 34m (AJUC270)
2.0m @ 54.60g/t Au from 85m (AJUC260)
7.0m @ 3.99g/t Au from 0 m (AJUC242)
7.0m @ 8.50g/t Au from 75m (AJUC249A)
9.0m @ 4.98g/t Au from 68m (AJUC246)
4.0m @ 11.05g/t Au from 33m (AJUC259)
8.0m @ 4.42g/t Au from 14m (AJUC275)
3.0m @ 12.49g/t Au from 75m (AJUC378) and, 3.0m @ 9.27g/t Au from 85m (AJUC378)
12.0m @ 2.69g/t Au from 23m (AJUC386)

- Completed initial 75,000m of 250,000m 2011/12 drilling programme - Primarily focused on discovery and resource increases

- Established a third exploration hub at the town of Lawra to service the northern region of Azumah's 3,100k m2 licence holding

- Commenced maiden Mineral Reserve estimates (due Q1 2012) with Feasibility Study completion in Q2 2012

- Received tenders for project design and construction management


Corporate

- Expanded management team to support growth strategy
- Increased stake in neighbour, Castle Minerals Limited, to 15.29%
- Retained cash and listed securities of $18.5m (as at 31 December 2011)

Gold explorer and developer Azumah Resources Limited ("Azumah" or "the Company") is pleased to report solid progress on all key operational fronts at its Wa Gold Project, NW Ghana, during the December Quarter 2011.

The highlight was confirmation of mineralisation at the Aduane and Bepkong South prospects between the Kunche and Bepkong deposits. Best intercepts included:

- 14m @ 2.31g/t Au from 13m (KRC478) - Aduane
- 16m @ 2.34g/t Au from 23m (KRC480) - Aduane
- 6m @ 15.60g/t Au from 53m (BRC230) - Bepkong South

The interpretation is that Kunche and Bepkong plus the newly discovered Aduane and Bepkong South mineralisation is all part of a larger inter-connected mineral system, controlled by north - north west trending structures.

Two follow-up drill programmes were completed during the Quarter at the Aduane and Bepkong South prospects to test this theory. In the first programme, 29 RC holes (3,174m) and one diamond hole (101m) were drilled at Aduane, and 31 RC holes (3,402m) and one diamond hole (100m) were completed at Bepkong South. Geological logging of these holes suggests that at least three mineralised zones of interest, which have previously been intersected, are continuous over strike lengths of at least 200m. A second follow-up drill programme of 110 RC holes (13,392m) and one diamond hole (95m) was recently been completed to further test the new model. Results are awaited.


Planned Infill Drilling Completed

The planned programme of infill drilling at the Kunche, Bepkong and Julie deposits (Figure 1) was completed with more excellent results returned (assay results not previously reported to the market are listed in Tables 2,3 and 4). Notable intercepts from Julie (Figure 2) and Kunche include:


Julie

16.0m @ 1.92g/t Au from 58m (AJUC195)
7.0m @ 3.99g/t Au from 0m (AJUC242)
9.0m @ 4.98g/t Au from 68m (AJUC246)
9.0m @ 3.27g/t Au from 34m (AJUC247)
7.0m @ 8.50g/t Au from 75m (AJUC249A)
6.0m @ 5.62g/t Au from 15m (AJUC256)
4.0m @ 11.05g/t Au from 33m (AJUC259)
2.0m @ 54.60g/t Au from 85m (AJUC260)
2.0m @ 19.75g/t Au from 88m (AJUC262)
2.0m @ 32.93g/t Au from 34m (AJUC270)
5.0m @ 17.82g/t Au from 34m (AJUC270A)
5.0m @ 4.29 g/t Au from 19m (AJUC271A)
8.0m @ 4.42g/t Au from 14m (AJUC275)
3.0m @ 12.49g/t Au from 75m (AJUC378)
3.0m @ 9.27g/t Au from 85m (AJUC378)
12.0m @ 2.69g/t Au from 23m (AJUC386)
6.0m @ 14.12g/t Au from 58m (AJU211)*
12.0m @ 3.40g/t Au from 52m (AJUC212)*
7.0m @ 4.18g/t Au from 36m (AJUC216)*
12.0m @ 3.57g/t Au from 23m (AJUC239)*
14.0m @ 5.64g/t Au from 9m (AJUC241)*


Kunche

15.7m @ 2.82g/t Au from 148m (KRCD563)
10.6m @ 2.15g/t Au from 179m (KRCD567)
7.3m @ 3.07g/t Au from 134m (KRCD573)
18.0m @ 1.66g/t Au from 148m (KRCD574)
9.1m @ 2.53g/t Au from 227m (KRCD575)
5.5m @ 4.85g/t Au from 176m (KRCD576)

(* Previously reported as 4 metre composites - refer ASX announcement dated 25th August 2011)

The Julie results confirm the presence of at least two high-grade pods of mineralisation at the eastern end of the 6km east-west trending Julie mineralised structure. Additional high-grade mineralisation is evident to the west of these pods and drilling continues to confirm continuity and to test for strike and depth extensions.

At Kunche and Bepkong a programme of deeper holes is planned to extend mineralisation below the base of the current resource.

Other Activities

During the December 2011 Quarter Azumah also:

- Committed to a new 250,000m exploration programme for the 2011/12 season with a primary focus on discovery and resource increases, including extension of existing resources.

- This programme is well progressed with 75,000m of drilling already completed. In total: 14 diamond holes (2,000m), 197 RC holes (22,881m), 1,401 aircore holes (49,394m), and 470 auger holes (1,196m) were drilled and more than 18,000 samples submitted for assay.

- The Company now has five rigs on site; two owned by Azumah and three contracted on a full-time basis.

- Established a third exploration hub at the town of Lawra to service the northern region of Azumah's 3,100km2 licence holding.

- Advanced the Feasibility Study for the development of a +1.0Mtpa, <100,000ozpa gold plant for Azumah's Wa Gold Project which is expected to be completed in Q2 2012.

- Engaged
- CSA Global Pty Ltd to undertake an updated independent Mineral Resource estimate for the Kunche, Bepkong and Julie flagship deposits. Results are expected in early February 2012.
- Coffey Mining Pty Ltd as project mining engineers to undertake mine optimisation, production scheduling and Mineral Reserve estimates.
- Lycopodium Minerals Pty Ltd to update its work on the Feasibility Study project operating and capital cost estimates.
- SAL Consult Limited to complete the Draft Environmental Impact Study. This was submitted in December to the Ghana EPA, other relevant authorities and key stakeholders.

- Received proposals from three qualified engineering groups for the design and construction management of the Wa Gold Project. Evaluation of the tenders is well advanced and an appointment of a preferred engineer is imminent.
Advanced arrangements for the provision of critical project infrastructure, such as power, water and access.

- Expanded the Azumah management team with key appointments, including Mr Mick Ryan as Project Manager and Mr Tim Lagdon as General Manager Corporate, to augment the previous appointment of Mr Nick Franey as General Manager Geology.


Resource Growth Strategy

Azumah's focus in the 2011/12 season will shift to increasing Mineral Resources. This follows the completion last Quarter of the 2011 infill drilling programme for Mineral Resource updates and then maiden Mineral Reserves to be estimated for the Feasibility Study.

It is important to emphasise that the infill drilling programme to enable Mineral Resource updates was almost entirely focused on improving the confidence levels and the understanding of the continuity of mineralisation, especially at near-surface within the outline of preliminary pit designs.

Completed Mineral Resource updates are expected to result in a major improvement in the classification of Mineral Resources from Inferred to Measured and Indicated, especially within the preliminary pit outlines. Accordingly, major increases in overall Mineral Resources should not be expected.

Resource growth is expected to be achieved through the discovery of new deposits within Azumah's 3,200 km2 licence holding and delineating extensions to existing deposits, both along strike and at depth.


Kunche-Bepkong Brownfields Exploration

Exploration close to the Kunche and Bepkong deposits remains a priority given the high prospectivity of this still not fully explored area in which the planned +1.0Mtpa, <100,000ozpa gold plant will be located.

Ten RC holes (1,230m) were drilled to test the southern extension of the Kunche deposit, where mineralisation remains open. Holes were drilled on three traverse lines and were aimed to intersect the target approximately 100m below surface. Results are awaited.

Four diamond (365m) and 15 RC (1,523m) drill holes were completed to test the Kunche West gradient array IP anomaly. Assay results are awaited. Initial indications from logging suggest that the IP anomaly may be due to felsic dykes which are usually unmineralised.


Greenfields Exploration

Azumah drilled 950 aircore holes (34,986m) at the Yagha North and South prospects, to complete coverage of areas that had not been screened adequately by historical soil sampling due to variably thick alluvial cover. Results will be assessed to define new drill targets.

Similarly, 446 aircore holes (14,289m) were drilled at the historical Basabli prospect to define new exploration targets where previous RC drilling yielded several encouraging results, including 11m @ 2.80g/t Au (BSRC006). A follow-up RC drill programme is planned.

An aircore drill programme commenced at the historical Duri prospect with five holes completed (119m) before the Christmas break.

In the Wa East area, Azumah also drilled 458 shallow auger holes (1,145m) on east and west strike extensions of the Kjersti prospect, which has been the target of recent galamsey (artisanal mining) activity. The auger programme of approximately 1,100 holes is planned to follow up anomalies previously identified by soil geochemical sampling.


Sample Preparation Facility To Be Installed

Azumah is committed to installing a dedicated sample preparation facility at its Kalsegra exploration headquarters to accelerate assay result turnaround times that last Quarter were an unacceptable 7-8 weeks and longer.

At the end of December, Azumah had more than 13,000 sample results outstanding.


Geological Interpretations

An interpretation of the high-resolution airborne geophysical data (magnetics and radiometrics) over the Wa-Lawra Belt, acquired over the past 18 months, was completed at 1:100,000 scale. This new map of the region will provide the geological context for future target generation and work programme planning. A similar interpretation is underway for the Wa East licences (Julie, Collette and Josephine). The geophysical data over that area is being supplemented by the use of spatially enhanced Landsat imagery to improve the interpretation of regolith as well as bedrock geology.


Corporate

Azumah has on issue 282,020,356 ordinary shares, 10,250,000 unlisted options and 2,000,000 performance rights.

As at the end of the reporting period, Azumah had cash and listed investments of $18.5M. This includes its strategic investment in neighbour Castle Minerals Limited (ASX:CDT), which increased to 15.29% (17,350,476 shares) and shares in Endeavour Mining Corporation (2,547,615 shares) following its recent merger with Adamus Resources Limited in which Azumah held a prior minority interest.


Planned Activity in the March 2012 Quarter

During the March Quarter 2012, the Company expects to:

- Complete Mineral Resource estimate updates for the Kunche, Bepkong and Julie deposits

- Test depth extensions to the Kunche and Bepkong deposits and strike extensions to the Julie deposit and Kjersti prospect

- Progress follow-up drilling at the Aduane and Bepkong South prospects to define an additional Mineral Resource

- Define and test new drill targets through RC and aircore drilling plus auger and soil geochemical sampling at the Basabli, Duri, Kjersti, Collette and at several other prospects

- Deliver maiden Mineral Reserves

- Complete all technical inputs to the Feasibility Study

- Progress funding options for project development; and

- Appoint engineers for design and construction management.

Full details of the ASX releases on which the above summary is based (inclusive of associated figures and drilling results) are available from the ASX at www.asx.com.au, or on the Sedar website at www.sedar.com, or from Azumah's website at www.azumahresources.com.au.


To view Figure 1: Wa Gold Project - Key Deposits and Prospects, please visit the following link:
http://media3.marketwire.com/docs/azr0116fig1.pdf.

To view Figure 2: Wa Gold Project - Recent Drilling Results, Julie Deposit, please visit the following link: http://media3.marketwire.com/docs/azr0116fig2.pdf.

To view Table 1: Wa Gold Project - Statement of Mineral Resource Estimates - JORC Code & NI 43-101 Compliant, please visit the following link:
http://media3.marketwire.com/docs/azr0116tab1.pdf.

To view Table 2: Kunche - Final Infill Drilling Results (1m samples), please visit the following link:
http://media3.marketwire.com/docs/azr0116tab2.pdf.

To view Table 3: Bepkong - Final Infill Drilling Results (1m samples), please visit the following link:
http://media3.marketwire.com/docs/azr0116tab3.pdf.

To view Table 4: Julie - Final Infill Drilling Results (1m samples), please visit the following link:
http://media3.marketwire.com/docs/azr0116tab4.pdf.


Competent Person's Statement

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Nick Franey who is a Member of the Australian Institute of Geoscientists. Mr Franey is a full time employee of the Company. Mr Franey has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and to qualify as a "Qualified Person" as defined in National Instrument 43 - 101 - Standards of Disclosure for Mineral Projects ("NI 43-101") of the Canadian Securities Administrators. Mr Franey consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. For a description of Azumah's data verification process, quality assurance and quality control measures, the effective date of the Mineral Resource estimates contained herein, details of the key assumptions, parameters and methods used to estimate the Mineral Resources and Ore Reserves set out in this report and the extent to which the estimate of Mineral Resources set out herein may be materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or relevant issues, readers are directed to the technical report entitled "NI 43-101 Azumah Resources Limited Wa Gold Project, North West Ghana", dated April 14, 2011.

For further information on the Wa Gold Project, please refer to the Company's NI 43-101 compliant technical report available on the Company's website at www.azumahresources.com.au and www.sedar.com.



Forward-Looking Statement

Certain statements in this report contain forward-looking information. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the results of future exploration, risks inherent in resource estimates, increases in various capital costs, availability of financing and the acquisition of additional licences, permits and surface rights. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made, and readers are advised to consider such forward-looking statements in light of the risks set forth in the Company's continuous disclosure filings as found at the (Canadian) SEDAR website.



Contact Information

Azumah Resources Limited
Stephen Stone
Managing Director
+61 (0)418 804 564
stone@azumahresources.com.au
www.azumahresources.com.au

NWR Communications
Nicole Harrison - Australia
+61 (0) 451 184 148
nicole.harrison@nwrcommunications.com.au