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Phoenix Gold delivers high grade gold results at Burgundy

Published: 21:00 25 Sep 2014 AEST

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Phoenix Gold (ASX:PXG) has received further shallow high grade results including a peak of 142 grams per tonne gold from infill and extension drilling at its Burgundy project near Kalgoorlie, Western Australia.

High grade intercepts include 3 metres at 77g/t gold from 5 metres and 1 metre at 142g/t gold from 38 metres.

These are supported by broader intersections such as 38 metres at 1.2g/t gold from 48 metres, 17 metres at 2g/t gold from 29 metres and 14 metres at 1.9g/t gold from surface.

The Burgundy project is scheduled for mining and development in June Quarter 2015, following completion of Kintore West open cut project.

Burgundy, Red Dam and Nazzaris are currently expected to deliver 700,000 tonnes per annum ore grading 2.2g/t gold to Greenfields Mill for toll treatment over the next 2 years.

Drilling has improved geological confidence and extends mineralisation to the north while Golder Associates is completing updated Resource and open pit Reserve study.

“The Burgundy project continues to deliver excellent results and we now have improved geological confidence and considerable upside potential along strike as we move to bring this project in to production in 2015,” managing director Jon Price said.

“Burgundy is a near surface oxide deposit in close proximity to the Greenfields Mill with excellent metallurgy. 

“We look forward to providing the updated Resource and open pit Reserve study in the December Quarter and complete the approvals process. Development is then scheduled to commence after completion of the Kintore west open cut currently being mined.”

Drilling Program

During the June and September Quarters 2014, a total of 35 reverse circulation holes totalling 2,910 metres were completed at the Burgundy project.

This was designed to test further extensions to the mineralisation to the north and south of the deposit, validate historic holes and convert Inferred material into the Indicated category for updated estimation of Ore Reserves.

Significant mineralisation intercepted includes: 
-    3 metres at 77.9g/t gold from 5 metres;
-    1 metres at 142g/t gold from 38 metres;
-    38 metres at 1.2g/t gold from 48 metres;
-    17 metres at 2g/t gold from 29 metres;
-    19 metres at 1.6g/t gold from 26 metres;
-    20 metres at 1.5g/t gold from 24 metres;
-    15 metres at 1.9g/t gold from 38 metres;
-    14 metres at 1.9g/t gold from surface; and 
-    13 metres at 1.9g/t gold from 26 metres.

This extended the boundary of the gold mineralisation to the north (20 to 25m) where it remains open along strike and at depth. 

The gold mineralisation also remains open to the west and east of the drilled area. The drilling also confirmed the tenor of gold mineralisation in some of the historic drilling.

Burgundy Gold Project

The Burgundy Gold Project is part of the Telegraph project area and is located on the prospective Telegraph Syncline in the heart of the Western Australian Goldfields less than 50 kilometres from the regional mining centre of Kalgoorlie.

It was first delineated in the 1980s by MRA using broad spaced RAB and infilling with RC percussion drilling.

Later work was completed by Croesus Pty Ltd and Cazaly Resources Ltd, which included infill RC percussion and diamond drilling.

The main mineralised zone is drilled on a 20 metre by 20 metre grid extending to a 40 metre by 20 metre grid on the peripheries.

Historic drilling data was validated by Phoenix with the majority of this data found to be suitable for resource estimation.

Analysis

The high grade results from infill and extension drilling at Phoenix Gold’s Burgundy project has improved geological confidence and identified considerable upside potential.

Golder Associates is also completing the updated Resource and open pit Reserve study.

This is encouraging given that the company plans to bring this project into production in 2015 after the Kintore West open cut.

Notably, it adds further to the potential of the broader Castle Hill project where extension drilling had delivered high grade gold of 4 metres at 32.5g/t gold from 80 metres and 1 metre at 80g/t gold from 74 metres at Stage 3.

Near-term newsflow includes more drill results from Red Dam, expected in October.

Mining at Kintore is on schedule with first ore treatment planned on schedule early in the December Quarter

 

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