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Southern Gold upgrades Cannon underground gold resource to probable reserve

The probable ore reserve is 117,000 tonnes at 5.31 g/t gold for 20,000 ounces with a net profit potential of more than $10 million.

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Southern Gold's interests in Western Australia

Southern Gold Limited (ASX:SAU) has converted the underground resource at the Cannon project in WA's Eastern Goldfields to a probable reserve of 20,000 ounces and the deposit remains open.

This process was completed by an independent consultant and the new reserve is based only on the indicated portion of this resource.

The design encapsulated four extraction levels, an 11-month mine life utilising minimal equipment and infrastructure to assess the high-grade shoots plunging beneath the Cannon pit.

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Cannon's combined indicated and inferred underground resource is 142,000 tonnes at 5.2 g/t gold for 23,600 ounces.

Isometric view of Cannon's life of mine design of the probable reserve.

Southern Gold managing director Simon Mitchell said: “Cannon has always been a high-quality deposit with decent gold grade and excellent continuity – we expect this will be an attractive ore deposit to mine for a nimble Kalgoorlie-based operator who can ensure an excellent margin for each ounce.

“And there is a good chance the structure continues to be mineralised at depth, enabling mine life to continue beyond what is implied by this maiden reserve.”

The Cannon ore reserve at a 3 g/t gold cut-off is:

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The recent acquisition by Southern Gold of the Georges Reward (GR) mining lease has not altered the original JORC resource but could allow for a more efficient mine design straddling the original Cannon and GR mining leases.

For the JORC resource to be upgraded or extended at depth it is necessary to undertake additional drilling to delineate down plunge extensions at Cannon and along strike extensions into GR.

This has been incorporated into the cost model with the mine design including a decline drilling position to be established and drilling to begin soon once the decline has sufficiently advanced.

The Cannon deposit was discovered by Southern Gold in 2008 and represents the southern strike extension of the George’s Reward deposit that was originally held by Northern Mining Limited.

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After completing a deal with Northern Star in early 2019, Southern Gold became owners of the George’s Reward tenement and brought the two mining leases together.

Primary mining method for the underground resource at Cannon will be longhole open stoping with either no fill, rockfill and cemented rockfill.

The secondary mining method will be stoping using cascading rockfill for a small area beneath the southern end of the pit.

Cascading rockfill is required for this area since no access is available to the top of the stopes after previous stoping using a pit adit.

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