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Phoenix Gold's Castle Hill Drilling Yields More Gold Mineralisation

Phoenix Gold's (ASX: PXG) accelerated A$20 million drilling program on the highly prospective Kunanalling and Zuleika shear zones in the heart of the Western Australian Goldfields is well underway, with the company confirming new mineralisation at the Castle Hill gold project.

The latest reverse circulation highlights from Castle Hill Stage 1 include:

- 11 metres at 5.1g/t gold from 85 metres;
- 47 metres at 1.3g/t gold from 156 metres, including 15 metres at 2.6g/t gold;
- 12 metres at 1.7g/t gold from 96 metres; and
- 7 metres at 1.9g/t gold from 161 metres.

These results followed on from the recent discovery of 94 metres at 2.6g/t gold from 88 metres, and confirm new mineralisation north of the current resource envelope, and at depth.

Castle Hill currently has a resource of 23.54 million tonnes at 1.6g/t gold for 1,178,000 ounces.

Jon Price, managing director, commented: "These further results not only demonstrate continuity of mineralisation to the North and at depth outside the current Resource envelope, but show new large zones of mineralisation within the broader tonalite at impressive grades."

Drilling results from Castle Hill will continue throughout the year, as 90,000 metres of drilling is planned to be completed at the project over the next 12 months.

Price added, "This project is quickly growing into one of the most significant new gold camps in the Goldfields region."

Drilling program

The program covered 11 reverse circulation holes for over 2200 metres, and included a combination of extensional drilling north and drilling below the current resource envelope.

The existing mineralisation to the south is close to surface and now appears to plunge north at greater width and improved grades.

The cross cutting London shear has been interpreted to control mineralisation in this area with a significant drill program planned to test continuity in this largely untested area. The results demonstrate significant potential to grow the Castle Hill Stage 1 project both along strike and at depth.

News flow: Drilling results and resource upgrade

The news flow for Phoenix will remain strong in the near term, with the maiden drill results expected from Castle Hill Stage 2 early in February, which will be followed by a resource upgrade at Castle Hill in the March 2013 quarter.

Drilling is also continuing at the Red Dam gold project, with 60% of the first round completed.

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