African Gold Group sells Ghana subsidiary

African Gold Group (AGG) Inc. is selling its Ghanaian subsidiary to help pay for a feasibility study of its exploration site in Mali.

The Ghanaian company Star Goldfields Limited (SGL) will buy AGG Ghana Limited for $1.2 million in cash. In acquiring AGG Ghana, SGL will take control of up to eight AGG assets in Ghana, including the 176-square-mile Asankrangwa Tenements and AGG's Nyankumasi concession. SGL has paid a $200,000 deposit to secure the deal.

AGG will use the money from the sale to focus on bringing its Kobada Gold Project in Mali into production as soon as possible. The company estimates the 83-square-mile concession along the Niger River could yield up to 50,000 ounces of gold per year.

AGG bought the land from COGEMA in 2005. The overall Kobada project encompasses AGG's Kaboda concession along with the Foroko and Acoma concessions. The company expects to mine outcropping or shallow oxide ore up to 82 feet below the surface.

AGG officials said Mali is the third-largest gold producer in Africa.

AGG is a Toronto-based company focused on the West African gold industry.