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KGL Resources intersects deeper high grade copper at Reward

Last updated: 20:11 15 Jan 2015 AEDT, First published: 21:11 15 Jan 2015 AEDT

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KGL Resources (ASX:KGL) has intersected high grade mineralisation well below previous intersections at the Reward Deposit of its Jervois Copper Project in the Northern Territory.

Deep diamond hole KJD010W1 confirmed the continuation of mineralisation from surface outcrop to 860 metres depth.

Assays from the copper and lead zones are:

- 7 metres at 2.07% copper, 1.06% lead, 2.41% zinc, 92.1 grams per tonne silver, 0.18g/t gold from 1,100 metres including 2 metres at 4.75% copper, 1.68% lead, 1.94% zinc, 156.1g/t silver, 0.25g/t gold from 1,105 metres;
- 2 metres at 12.02% lead, 0.40% zinc, 0.06% copper, 473g/t silver, 0.15g/t gold from 1,062 metres; and
- 7 metres at 4.25% lead, 2.98% zinc, 0.60% copper 53.4g/t silver, 0.07g/t gold from 1,070 metres

These intersections demonstrate the continuity of mineralisation at depth and open up large areas for future exploration at both Marshall‐Reward, Bellbird and along the entire 12 kilometre strike length.

“These intersections are over 330 metres below what was previously our deepest hole, clearly indicating the potential size of this already large mineralised system,” managing director Simon Milroy said.

“This fits nicely with the current research that is suggesting a SEDEX style deposit.”    

Drilling at the project will recommence in February with up to three rigs operating.


Drilling Results


KJD010W1 was designed to intersect the mineralised zone at Reward at least 300 metres below the existing Reward resource and any previous drilling to assess the potential to significantly extend the resource at depth.

It intersected two intervals of predominantly lead mineralisation that are approximately 5 metres apart followed by a zone of copper rich mineralisation 18 metres to the east.

Good zinc grades were recorded in both the copper and lead zones.    

Mineralisation within the copper zone comprises veins and disseminations of chalcopyrite with narrow bands of semi‐massive sulphide within a broad alteration zone typical of the mineralisation within the Marshall‐Reward and Bellbird resources.

Mineralisation within the lead rich intervals is dominated by galena and sphalerite and hosted within calc‐silicate rocks that sit in the hanging wall to the copper mineralisation.

This is very similar to the recent high grade lead/zinc mineralisation intersected at Reward.

These intersections demonstrate the continuity of mineralisation at depth and open up large areas for future exploration at both Marshall‐Reward, Bellbird and along the entire 12km strike length.

The main section of mineralised core (100 metres) from KJD010W1 has been sent to the Northern
Territory Geological Survey in Darwin for a Hylogger survey to determine the alteration mineralogy associated with the mineralised intervals. 

CSIRO will also be studying the core as part of an extended research project on Jervois with particular emphasis on the style of mineralisation. 

Initial work has revealed that the lead‐zinc mineralisation and possibly the copper has affinity with the SEDEX class of deposit.


Upcoming Work


KGL will have up to three drilling rigs operating during February. A 9,000 metre reverse circulation program is designed to complete step out drilling on some of the high grade zones that remain open particularly at Bellbird.

Previous intercepts such as 4 metres at 4.91% copper, 55.3g/t silver, 0.04g/t gold from 253 metre (Hole KJC031) and 6 metres at 4.53% copper, 34.9g/t silver, 0.15g/t gold from 390 metres (Hole KJCD053) are on the very edge of the Bellbird resource. 

High grade extensions to both Green Parrot and Marshall Reward will also be tested.


Analysis

KGL Resources’ high grade intersections are located over 330 metres below the previous deepest hole, demonstrating the potential size of the mineralisation system.

It also supports current research that Reward is a SEDEX style deposit.

This has the potential to improve on the December 2014 Pre-Feasibility Study, which has already confirmed Jervois as a viable mid-sized, multi-metal mine

The PFS estimated Capex at A$189 million including $22 million in contingency and C1 cash costs ofUS$1.51 per pound.

Additional work will be carried out that could add an extra $100 million to $200 million of free cash flow over the life of the project.

The company remains well funded with $12.7 million in cash at the end of September 2014, and no debt.

 

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