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Red Mountain Mining Delivers Higher Grade Gold Resource For Batangas

Perth-based Red Mountain Mining (ASX: RMX) has significantly increased the grade of its flagship Batangas Gold Project in the Philippines with a new resource estimate for the project.

The project now hosts Inferred and Indicated Resources totalling 5.78 million tonnes at an average grade of 2.2 grams per tonne (g/t) for 408,000 contained gold ounces.

This compares to a previous Indicated and Inferred Resource of 13.95 million tonnes at 1.1g/t for 501,000 contained gold ounces, using a 0.3g/t cut-off for oxide and 0.5g/t cut-off for transitional and fresh material.

The new resource is based on the results of fresh drilling by Red Mountain at Batangas since August 2012, surface channel sampling at South West Breccia - part of the Lobo prospect, and a revision and reinterpretation of all previous historical data.

Significantly, the upgraded Resource uses a higher grade gold cut-off (0.85g/t) for the Indicated and Inferred Resource for both the Archangel and South West Breccia (Lobo) gold mineralisation within the Batangas project area.

Neil Warburton, executive chairman, commented: "Since we acquired the gold project in October 2012, our focus has been to 'high grade' the existing known large tonnage low grade resources and explore for new higher grade prospects.

"We are very pleased with the significant increase in grade of the Batangas Gold Project Mineral Resource Estimates based on using a 0.85 grams per tonne gold cut-off grade and including results from the additional drilling conducted at Archangel last year.

"The company will now focus on expanding the higher grade gold resource base with drilling in progress testing epithermal lode structures at Lobo to replicate the South West Breccia resource grade of plus 7 grams per tonne gold.

"The company is very confident that further additional high grade gold resources can be added to the new resource inventory announced today based on our initial drilling results at West Drift, Lobo and other recent results obtained from surface trenching."

Analysis

Today's increase in grade for the Batangas Gold Project in the Philippines reflects the success of Neil Warburton's strategy to take the project from historic low grade bulk gold tonnages to higher grade resources and proving up its known high grade targets.

The company continues to firm up the high grade copper-gold potential of Batangas, validating its decision to acquire a 100% interest in the project last year.

Even at this early stage, Red Mountain is exhibiting hallmarks of Medusa Mining in certain respects. This augurs well for the share price potential and valuation of Red Mountain.

There are plenty of catalysts and "triggers" for the valuation of just $8.4 million to move higher in coming months. We can foresee a share price of over $0.20.

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