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Mandalay Resources Extends Mineralisation At Its Cerro Bayo Silver-Gold Mine

Mandalay Resources (TSE:MND) has unveiled drilling results from its Cerro Bayo silver-gold mine in Chile, which has shown additional mineralisation.

Some of the extensions found will contribute to the firm's year end resource update and replace the resource that will be depleted in 2013, the company said.

The work, which cost $3million and consisted of 99 holes, was carried out between January and August this year and, also tested potential new targets.

Chief executive Brad Mills told investors: "Infill and extention drilling at Cerro Bayo continues to delineate additional mineralisation along the veins we are currently mining or plan to mine in the near future.

"We expect this work to at least replace the company's resource depletion for 2013 with additions in Coyita, Marcela Sur, Delia NW and Trinidad (adjacent to Delia NW) veins.

"In addition, we have begun drilling wide spaced long horizontal holes from underground platforms to test the strike lengths (500 metres each) of Fabiola, Yasna, and Coyita veins under Laguna Verde.

"Should these holes prove successful, we anticipate infill drilling and/or underground development to extend mineral resources on these veins during 2014."

On new targets, Mills said one had been confirmed, namely the Carola vein, which has potentially economic grades and widths.

At another two targets, initial drilling failed to generate intersections of both mineable grade and width, but Mandalaly identified possible vectors toward potentially more prospective parts of the systems, he said.

Toronto-listed Mandalay has the producing Costerfield gold-antimony mine in Australia and producing and exploration projects in Chile.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.