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Phoenix Gold Drilling Finds More High Grade Gold At Red Dam

Phoenix Gold (ASX: PXG) is currently undertaking an extensive A$20 million accelerated drilling program covering over 217,000 metres in the prospective Kunanalling and Zuleika shear zones in the heart of the Western Australian Goldfields.

The first phase of the drilling program has now been completed at Red Dam, with high grade near surface highlights including: 10 metres at 9.0g/t gold from 39 metres; and 3 metres at 17.3g/t gold from 42 metres.

These are supported by broader intersections such as: 12 metres at 4.0g/t gold from 42 metres; 10 metres at 4.6g/t gold from 127 metres; 18 metres at 2.1g/t gold from 52 metres; and 13 metres at 1.7g/t gold from 44 metres.

Red Dam currently has a Resource of 3.4 million tonnes at 2.1g/t gold for 229,000 ounces, with an update to the resource expected in the June 2013 quarter.

Importantly for Phoenix, geological logging has identified multiple zones of alteration, sulphide enrichment and veining outside the current resource envelope, which remains open along strike north and south - and at depth.

Jon Price, managing director, commented on the results: "Red Dam has clearly been our priority project within the Broads Dam project area with over 24,000 metres of drilling planned. So far we have drilled about a quarter of these planned metres.

"To intersect such spectacular alteration and veining outside the current resource envelope is very exciting."

Price added that he believes that Red Dam will become a significant high grade contributor to the company's mine plan being developed as part of the Definitive Feasibility Study.

Red Dam only 12kms from the Castle Hill Project

Red Dam is located 40 kilometres from the regional mining centre of Kalgoorlie, and only a dozen kilometres from the company's Castle Hill Project using existing haulage roads.

In January 2013, Phoenix's first drilling program commenced at Red Dam with phase 1 comprising 44 reverse circulation holes for over 6000 metres - with 2 rigs in operation.

Phoenix was aiming to extend mineralisation both along strike and at depth outside the current resource envelope, validate historic drilling data and to infill areas enabling conversion of the present resources into Indicated category for inclusion in the Definitive Feasibility Study.

This latest drilling has confirmed a mineralised sequence of rocks that can be generalised as a coarse basal ultramafic, overlain by an intruded dolerite, then black shale and a laminated siltstone.

Drills back turning at Castle Hill; results through March into April

Drilling has now recommenced at the Castle Hill gold project, with one rig at Stage 1 following up recent intercepts and one rig at Stage 2 continuing extension and infill drilling.

The drill programs are being staggered to enable interpretation of new results to optimise the next round of drilling at each project. Diamond drilling will also commence next week at Castle Hill.

Results are expected to continue through March into April.

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