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Phoenix Gold Commences $20M Drill Program, Targets 4moz

Phoenix Gold (ASX: PXG) has kicked off an extensive $20 million drilling campaign starting at Castle Hill, with the program to cover 215,000 metres over the next 15 months.

Phoenix has established a 4 million gold ounce interim resource goal.

Jon Price, managing director, commented: "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.

"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."

Drilling will include lateral and depth extension drilling combined with infill and sterilisation drilling planned at Kunanalling and Zuleika shear zones, which is around 50 kilometres from the regional mining centre of Kalgoorlie - Boulder.

The first drill results are expected in the March quarter of 2013. A Definitive Feasibility Study is to be completed by the end of 2013.

215,000 metres of drilling

Drilling will be a combination of reverse circulation and diamond at the flagship Castle Hill and Broads Dam gold projects and air core, soil sampling and geophysics on a number of highly prospective greenfields targets including Ora Banda, Carbine West, Christmas Reef, Split Rock Dam and Zuleika North.

The program follows the successful 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.

The company is also seeking to raise A$2 million through a Share Purchase Plan at the Placement price of $0.30 a share closing at 5pm on Thursday 29th November 2012.

Price added, "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.

"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."

Drilling summary

Castle Hill: The project area lies on the western margin of the Coolgardie Domain of the Norseman-Wiluna Belt, and is transected by the Kunanalling Shear Zone.

The current Castle Hill Resource is at 21.71 million tonnes at 1.5g/t gold for 1,059,000 ounces.

Broads Dam: The Broads Dam Gold Project area is located on the Zuleika Shear, a major northwest trending lineament and host to numerous multi-million ounce gold deposits.

The current Broads Dam Resource is 5.32 million tonnes at 2.2g/t gold for 377,000 ounces.

Definitive Feasibility Study by end of 2013

Phoenix remains focused on growing resources at Castle Hill and Broads Dam projects, with the company also commencing a geological architecture 4D evolution study centred on identification of exploration targets across the tenements.

In parallel with the drilling program, Phoenix aims to complete a Definitive Feasibility Study by December 2013 - with all advanced projects including those that formed part of the Conceptual Mining Study released last month.

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