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Southern Gold Confirms High-Grade Weolyu South Zones

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THE DRILL SERGEANT: Southern Gold (ASX: SAU) announced completion of a second phase of systematic underground channel sampling at the company’s 100 per cent-owned Weolyu South gold-silver project in central South Korea.

Southern Gold explained the sampling had been designed to infill and extend previous results and as a quality assurance (QAQC) program checking on assaying protocols.

In this new phase of work a total of 18 new channel sample lines were taken as infill or extensional samples and a further 29 lines were re-assayed for 34 samples, from coarse rejects retained from an initial round of sampling carried out in 2017

New samples were collected from three horizons along the historical drives.

Intercepts included:

0.4 metres at 32.8 grams per tonne gold and 764g/t silver;
0.45m at 30g/t gold and 1,280g/t silver; and
0.55m at 28.9g/t gold and 1,350g/t silver.

The company said these newly reported results have continued to produce excellent gold and silver grades associated with the three currently defined high grade zones or shoots.

A review into sample preparation and assaying results was conducted as part of a general QAQC review through a third-party laboratory following indications of statistical variance in the original analysis.

This review returned a variance on all sample fire assay gold results including an average 30 per cent increase in gold grades from the Weolyu samples, a substantial uplift, which the company considers having an impact on economic potential with a clear high-grade gold-silver zone showing greater consistency.

“Weolyu is Southern Gold’s premier exploration target and continues to impress with its very high-grade gold and silver tenor from high quality drill-equivalent channel samples at close to true width on the vein,” Southern Gold managing director Simon Mitchell said in the company’s announcement to the Australian Securities Exchange.

“This underground channel sampling is on only one vein system while we have identified multiple epithermal quartz veins on surface, most of which remain untested by drilling.

“The company plans to drill the down plunge extension of this very high-grade gold-silver system and the other untested epithermal quartz vein systems in the coming year.”

 

Email: info@southerngold.com.au

Website: www.southerngold.com.au

 

Southern Gold Strikes Deal to Proceed Southern Cross Underground

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THE BOURSE WHISPERER: Southern Gold (ASX: SAU) struck a new agreement with development partner, Westgold Resources (ASX: WGX) for the underground development phase at the company’s Cannon gold mine, near Kalgoorlie in Western Australia.

Announcing the deal, Southern Gold outlined the features of the agreement to include Westgold having a five year right-to-mine over a defined one-kilometre radius on mining license M25/333, which essentially covers the Cannon Gold deposit with Westgold assuming all financing and operating risk.

Westgold will also have the right and flexibility to devise its own mine plan.

For this right to mine, Westgold will pay Southern Gold $1.5 million within five business days and a production payment on a $/troy ounce of gold produced under the terms of a production matrix.

Based on an Australian dollar gold price of less than $1800 per ounce Westgold will pay $160 per ounce, or $190 per ounce when the gold price exceeds $1800 for production of up to 15,000 ounces.

For production of more than 15,000 ounces – at the same gold prices – Westgold will pay $180 and $210 per ounce respectively.

“Southern Gold has turned a cash consuming asset into a cash generating one, Southern Gold managing director Simon Mitchell said in the company’s announcement to the Australian Securities Exchange.

“And it has done so in alignment with Southern Gold’s development philosophy of bringing in third parties who know how to mine and manage risk, particularly the elevated risks of underground mining.

“This deal with Westgold should generate cash for Southern Gold based on the high-grade gold resource at Cannon which stands at 24,000 ounces at 5.2 grams per tonne gold in the Indicated and Inferred categories.

“The arrangement also ensures Southern Gold remains significantly exposed to the upside should the deposit continue at depth.”

 

Email: info@southerngold.com.au

Website: www.southerngold.com.au