no feasibility needed cashedupbogan, page-16

Sometimes past announcements are worth a re-read. Slow going with the long turnaround times of the assays and not much info from the coy. It won't happen overnight but it will happen :)

INITIAL RESULTS FROM EXPANSION STUDY

Signature Metals Limited is pleased to announce preliminary results from an internal scoping study into the expansion of production at the Konongo Gold Project. The Company anticipates being able to increase the plant throughput to 700,000 tonnes per annum with relatively modest capital expenditure in the order of US$3-4 million. This would lift gold production to between 40,000 and 60,000 ounces per annum at head grades between 2 and 3 g/t. The increased throughput would also result in a reduction of operating costs in the order of 5 to 15%.

The proposed expansion is based on purchase and installation of a SAG mill or ball mill to operate in circuit with the existing ball mill. Additional tankage would be added to the leach circuit to increase capacity whilst maintaining the same residence time. The total capital cost for purchase of these items as well as their installation is estimated to be approximately US$3-4 million.

The expansion would be centred around the existing 350,000 tonne per annum CIL plant on site and is therefore dependent on the successful refurbishment of the existing plant. Since no serious equipment defects have been identified in the works to date the Company can now start a pre-feasibility study on the expansion of the plant with confidence. This study will include more detailed costings for capital items, further financial modelling and discussions with potential suppliers. No purchase commitments will be made until after commissioning of the existing plant has been completed.

The expansion of the existing plant would be the first step on the way to the Company’s aim of making the Konongo Gold Project a 100,000 ounces per annum producer. The Company is continuing to study other options to achieve this goal, as well as carrying out aggressive exploration programmes to test the Company’s Exploration Target of 1.5 to 2.5 million ounces of gold and unlock the considerable potential present within the Konongo Gold Project.

The Company also continues to increase the feedstock available for the re-commencement of production at Konongo. In addition to the JORC resources quoted in Table 1 the Konongo Gold Project contains material on oversize stockpiles, low grade dumps and in tailings/battery sands adjacent to historical workings.

From sampling and surveying of the stockpiles and dumps the Company can now report that the total inventory of this material is approximately 400,000 to 500,000 tonnes at grades between 1.5g/t and 5 g/t gold. It should be noted that the tonnages and grades stated do not currently comply with JORC reporting criteria however the assay results clearly demonstrate the economic potential of the material. The tonnage is derived from surveying of the stockpiles and dumps and using an SG of 1.7. The grade is estimated from surface sampling of the stockpiles/dumps (300 samples in total).

Due to the low cost of reclaiming these stockpiles and dumps it is likely that this material will be processed during the initial phase of production. Based on metallurgical testwork to date the company expects recoveries in the range of 60% to 90% from processing of these stockpiles and dumps.

With consultants also working on resource updates for the Boabedroo, Kwakawkaw and Obenemase Deposits the Company will have a large degree of flexibility in scheduling mining operations at the Konongo Gold Project which will substantially decrease operating risks associated with the project.

Monday 6th September 2010 INITIAL RESULTS FROM EXPANSION STUDY