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  • Phoenix Gold Impresses With Widest Gold Intercept At Castle Hill 0 comments
    Dec 4, 2012 6:53 PM

    Phoenix Gold (ASX: PXG) is already delivering impressive drilling results from the recently commenced $20 million drilling campaign starting at Castle Hill project, with the program to cover 215,000 metres over the next 15 months.

    A resource upgrade and maiden gold reserve is due in coming weeks from Castle Hill.

    Phoenix has intersected the largest gram-metre intercept at Castle Hill being; 94 metres at 2.6g/t gold from 88 metres, supported by other intersections including; 8 metres at 2.4g/t gold from 74 metres; and 5 metres at 2.2g/t gold from 142 metres.

    Other broad highlights include; 56 metres at 0.9g/t gold from 79 metres; 38 metres at 0.8g/t gold from 161 metres; and 20 metres at 0.8g/t gold from 88 metres. The assays are from 7 of 11 holes in stage one.

    Importantly - drilling demonstrates potential outside the current resource envelope, and remains open in all directions and at depth - with new assays to flow through early in the New Year.

    Castle Hill currently hosts over one million gold ounces at less than 85 metres depth.

    Jon Price, managing director, commented on the news: "This result is by far the most significant and largest gram-metre intercept at Castle Hill and reinforces the potential strike and at depth. The project continues to exceed our expectations and is only 35 minutes' drive from Kalgoorlie-Boulder.

    "We now look forward to releasing the rest of the assays in due course and updating the geological model for Castle Hill Stage 1 in the March Quarter next year."


    These impressive results are just the beginning of an extensive $20 million drilling campaign over the next 15 months highlight the vast untapped potential of Phoenix's Western Australian gold projects.

    The Phoenix share price has trended higher in recent times to the $0.35 range, from $0.20 mid-year.

    Proactive Investors considers this re-rating is just the beginning, as the company has a market cap. of $62 million and $12 million in cash, for an enterprise value of $50 million.

    With a resource of 2.24 million ounces, the E/V per once is only a little over $20 - compared to a peer average closer to $40 an ounce.

    A resource upgrade and maiden resource for Castle Hill is pending this month, which are another two price driving catalysts. If the resource increases, then Proactive Investors expects the Phoenix share price to mover higher with it.

    The other major positive for Phoenix is having Jon Price at the helm, with the company growing its resource base to 2.24 million ounces from 595,000 ounces in less than two years.

    Add to this a 4 million gold ounce interim resource exploration target goal - and the undervaluation of Phoenix could magnify further.

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