Kula Gold upgrades Woodlark

THE BOURSE WHISPERER: Kula Gold has upgraded the JORC Ore Reserves estimate at the company’s Woodlark Island gold project to 10.39 million tonnes at 2.1 grams per tonne gold for 700,000 contained gold ounces of gold in the Proved and Probable category.

 

Woodlark Island gold project, PNG. Source: Company announcement

This represents an increase of 20 per cent on the prior estimate the company released in July 2010.

Kula Gold said the new estimate was a result of intensive studies it has undertaken in 2011 as part of its Feasibility Study process.

The Reserve Estimate is based on a conservative gold price of US$1,200 per ounce.

“This substantial increase in our Proven and Probable Reserves at a robust gold grade clearly demonstrates the strength and attractive economics of the Woodlark Island project,’ Kula Gold managing director Lee Spencer said in the company’s announcement to the Australian Securities Exchange.

“We are confident our existing reserve base will be upgraded as our Inferred Resources are infill drilled to higher resource categories in the near term.

“Subsequent increases of project Ore Reserves will further strengthen our project.”

The Kula Gold Feasibility Study has plans for a 1.5 million tonnes per annum processing plant that has the capacity to be upgraded to 2.6Mtpa.

The company remains confident further reserve upside exists for the resource at Kulumadau East and resource upside through future exploration success based on its eight other epithermal targets on the island.

Kula Gold has estimated an initial seven year mine life for the project with the ability to extend that period with any future resource conversion and exploration success.