Phoenix kicks off $20M drilling program
THE DRILL SERGEANT: Phoenix Gold (ASX: PXG) has commenced a $20 million accelerated drilling program on the Kunanalling and Zuleika shear zones in the heart of the Western Australian Goldfields, just outside of Kalgoorlie – Boulder.
The program is to comprise a combination of reverse circulation (RC) and diamond drilling at the company’s Castle Hill and Broads Dam gold projects and air core, soil sampling and geophysics on a number of greenfields targets including Ora Banda, Carbine West, Christmas Reef, Split Rock Dam and Zuleika North.
Project location, Phoenix tenements and development centre. Source: Company announcement
“2013 is shaping up to be company defining year for Phoenix with the drilling program underway and a significant body of work undertaken to complete the Feasibility Study,” Phoenix Gold managing director Jon Price said in the company’s announcement to the Australian Securities Exchange.
“It comes at a time where local drill rigs are more available, assay turnaround times are as little as five days and we have been able to attract high quality staff to manage the accelerated program.
“I believe we now have all the ingredients to realise the full potential of our Castle Hill project, to turn Red Dam into a significant high-grade open cut and underground gold mine and continue our search for the next large gold discovery in this fantastic part of the world.
“The infrastructure is here, we are 30 minutes’ drive from a major regional mining capital and we have conventional mining and milling projects with real upside.
“By tripling the drilling activity at Castle Hill and Broads Dam and fast tracking the DFS in parallel, we will be in a strong position to make a sound investment decision to develop the projects.”
Phoenix Gold commenced drilling at Castle Hill in early November targeting lateral and depth extensions to the current Resource envelope.
In 2013, Phoenix anticipates drilling a total of over 100,000 metres at Castle Hill with up to four rigs on site drilling to an average depth of approximately 180m.
The company’s aim is to fully define this gold camp and realise, what it considers, the project’s multi-million ounce potential.
RC and diamond drilling will commence at Broads Dam in the March Quarter 2013 and will focus initially on the recent Red Dam gold discovery with 24,000m planned to an average depth of approximately 190m.
The aim is to significantly increase the current resource both along strike and at depth to define the project’s open cut and high grade underground potential.
Drilling will then move to Broads Dam and Blue Funnel in the second half of 2013.
The drill program comes on the back of a recent Placement of A$20 million with Australian and international institutions with Tranche 1 complete and Tranche 2 subject to shareholder approval at a General Meeting to be held on 29th November 2012.
Phoenix also indicated its intentions to raise $2 million through a Share Purchase Plan at the Placement price of 30 cents per share closing at 5pm (WST) on Thursday 29 November 2012.
In addition, the Company is continuing to fund the program through the sale of stockpiles and the sale of mining rights at the Catherwood project.
The company said it expected these agreements, combined with the potential development of other smaller mines including Blue Funnel, Nazzarris and Boundary will generate income in excess of $8.5 million across a 15 month period.