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Ausgold drilling confirms thick ore zone at Boddington South Gold Project

Last updated: 17:36 26 Nov 2010 AEDT, First published: 16:36 26 Nov 2010 AEDT

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Assays from the first six holes of Ausgold's (ASX: AUC) drilling program on the Jinkas ore body within its Boddington South Gold Project, have confirmed a thick ore zone that continues at depth and along strike of the current gold resource.

Boddington South is located within the underexplored Southwest Yilgarn region of Western Australia. This region hosts Newmont Mining's (NYSE: NEM) 26 million ounce Boddington Gold Mine, Australia's largest current gold mine.

Results include:

- 19 metres @ 3.93 g/t Au
- 14 metres @ 3.73 g/t Au (including 1 metre @ 11.80 g/t Au and 1 metre @ 10.40 g/t Au); and
- 10 metres @ 4.50 g/t Au (including 1 metre @ 20.20 g/t Au).

Work completed so far indicates that the characteristics of the company’s ore bodies are similar to Newmont’s world-class gold deposit.

Ausgold has previously announced a JORC-compliant gold resource of 241,800 ounces for the project.

Significantly, Ausgold’s current mineral resource is based on shallow drilling limited to only 30 metres below the ground surface with the company’s gold deposits currently open along strike in both directions as well as at depth.

The objective of Ausgold’s current 287-hole (20,000 metre) reverse circulation drill program is to increase the project’s gold resource through drill testing the strike and depth continuations of the known ore bodies.

Ausgold has a market capitalisation of A$54.93 million and had A$6.52 million cash at the end of the September quarter.