Red Mountain Mining’s (ASX: RMX) drilling has defined an extension to the high-grade South West Breccia mineralised zone on the Lobo mining permit of its Batangas Gold Project in the Philippines.
Hole LB 93-14 returned a key result of 3.95 metres at 4.6 grams per tonne gold from surface including 0.75 metres at 15.8g/t gold and 0.5 metres at 7.16g/t gold and 15.3g/t silver.
The results will be incorporated into a new Resource estimate that would potentially add to the mining inventory available for the proposed gold mining and processing development.
“The key to the Batangas Project is that we have already demonstrated a low cost, early payback, gold project based on existing resources only. So any further resource upgrades, particularly high-grade at surface, may improve the potential financial outcomes of the project,” managing director Jon Dugdale said.
Drilling has now commenced testing the entire SWB lode corridor from Japanese Tunnel to where the lode passes under shallow, younger, limestone southwest of Trench 13.
Initial results from soil sampling in progress to the southwest of Trench 13 are encouraging and indicate an anomalous trend, partly over younger limestone, extending towards previous high grade surface float sample results at Signal prospect including 72.6g/t gold and 42.6 g/t gold.
Further soil sampling and trenching will be carried out in this area that could potentially extend the target corridor to over 1.6 kilometres.
“We will continue drilling southwest extensions to the structure from Japanese Tunnel to the overlying limestone contact, and potentially beyond, with the objective of locating and defining other high-grade shoots of gold mineralisation,” Dugdale added.
A total of 14, shallow, triple-tubed diamond drill holes have now been completed during Phase 1 of the Company’s ongoing exploration drilling program, totalling 568 metres to date.
Eight holes were completed that defined a high grade, outcropping, “wedge” of lode gold mineralisation, offset from the main SWB shoot, which has an Indicated and Inferred Resource of 194,000 tonnes at 7.2g/t gold.
Other results from this high grade wedge include:
- Trench 19 with 8.35 metres at 18.3g/t gold;
- Trench 21 with 6 metres at 31.2g/t gold and 1.75 metres at 41g/t gold; and
- LB 92-14 with 1.5 metres at 8.1g/t gold including 0.5 metres at 12g/t gold.
Surface trench channel sampling and drilling has intersected high-grade epithermal gold mineralisation in five areas on the Lobo Mineral Production Sharing Agreement (MPSA).
Red Mountain had yesterday delivered a Scoping Study for the Batangas Gold Project that estimated a low $16.7 million pre-production capital cost, IRR of 70% and projected life of mine revenue of A$134 million.
This is based on a simple open pit mining and carbon in leach (CIL) processing of existing, high grade resources.
The processing plant is intended to be located at Lobo, close to the very high grade South West Breccia resource and local infrastructure, about 2 kilometres east of Lobo township.
Red Mountain has approved a Definitive Feasibility Study that is expected to be completed by December 2014 with construction targeted to begin in early 2015.
While still at an early stage, drilling at Lobo has already defined an extension to the high grade South West Breccia mineralised zone.
Given that the Batangas Gold Project Scoping Study is based on existing Resources, this has the potential to further improved its economics, which already present an IRR of 70% along with projected life of mine revenue of A$134 million.
Further drilling could confirm further high grade zones, which would contribute further to this.
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