THE DRILL SERGEANT: Red 5 Limited (ASX: RED) reported an updated bulk mining Mineral Resource estimate for the company’s King of the Hills (KOTH) gold project, located in the Eastern Goldfields region of Western Australia.
The updated estimate comprises 66 million tonnes at 1.5 grams per tonne gold for an estimated 3.11 million ounces of contained gold.
The updated Resource represents a 65 per cent increase in contained gold over the previous Mineral Resource estimate announced in December 2018, with 76 per cent of the Resource, 53.1 million tonnes at 1.4g/t gold for 2.35 million ounces, now classified in the higher confidence Indicated Resource category.
The Resource includes open pit and underground components, comprising:
Open pit: Indicated and Inferred Resource of 48.5 million tonnes at 1.3g/t gold for 2 million ounces of contained gold (0.4g/t Au cut-off); and
Underground: Indicated and Inferred Resource of 17.5 million tonnes at 2g/t gold for 1.11 million ounces of contained gold (1.0g/t Au cut-off).
Red 5 said there was potential for further Resource growth, with a large proportion of the prospective Eastern Margin Contact remaining largely untested by drilling.
“This result furthers our goal of developing a large standalone bulk mining and processing operation at King of the Hills,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.
“The upgraded Mineral Resource clearly demonstrates the scale and potential of this exceptional project, which we believe has the potential to form the cornerstone of a substantial mid-tier Australian gold business with the resource base, production profile and mine life required to attract global institutional investor interest.
“The updated Resource provides the foundation for a Pre-Feasibility Study to evaluate the economics of a potential stand-alone operation at KOTH which is now well underway.
“This PFS will focus initially on the open pit Resource, supplemented by the Resources currently being evaluated by our ongoing regional exploration program such as the recently announced Resources for the Rainbow and Severn satellite deposits.
“In addition to the results of the PFS, further news from the underground diamond drilling program – which is continuing to deliver exceptional results which have not been fully captured in this Resource upgrade – will be released in due course.
“The results being generated have demonstrated the potential for further significant growth in the Resource both down-plunge and along strike.”