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Papillon Resources On Schedule To Deliver Maiden Gold Resource From Fekola In Mali

Papillon Resources (ASX: PIR) remains on track to deliver an initial Resource from its Fekola Gold Project in western Mali by mid-2012 and has been largely unaffected by the recent military coup.

The company has recommenced drilling at the project and completed more than 15,000 metres of diamond drilling prior to early April, when drilling service providers temporarily stopped drilling at Fekola due to potential disruptions to supply lines.

So far results have been released for about 2,000 metres of drilling.

The company continues to unlock the massive potential of its Fekola gold project in West Africa.

In February, the company delivered more broad near surface gold intersections including 75 metres at 4.12 grams per tonne (g/t) gold from 104 metres and 32 metres at 7.35g/t gold from 59 metres.

Importantly, it is this success that has attracted new investment from companies like Gryphon Minerals (ASX: GRY), which has spent A$13.75 million to earn a 6.72% stake in Papillon, making it a substantial shareholder.

Papillon is well funded to begin Scoping Studies at Fekola, with a $16 million placement conducted in February boosting the company's cash position to about $27 million.

Fekola strategically located in 22Moz province

Papillon's Fekola Project is located in the same corridor as the Mali West regional gold province, which contains more than 22 million ounces of gold within 60 kilometres.

Other projects in the vicinity include Randgold Resource's (LON: RRS) 11.5 million ounce Loulo project andAngloGold Ashanti's (NYSE: AU) 13.1 million ounce Sadiola project.

Restoration of civil rule

Papillon has also acknowledged the restoration of a civilian government in Mali.

Dioncounda Traore, the former parliament speaker, has been sworn in as interim President.

Following heavy pressure from citizens for the restoration of civil rule, an agreement was negotiated under the direction of the Economic Community of West African States (ECOWAS) under which President Amadou Toumani Toure formally resigned and an interim President was appointed until elections are held.

Economic sanctions imposed on Mali after the coup have since been lifted by ECOWAS.

Activities in the capital Bamako and the populous western half of the country are believed to have returned to normal.