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  • Red Mountain Mining's Shares Stronger On Drilling Results 0 comments
    May 8, 2014 7:26 PM

    Red Mountain Mining's (ASX: RMX) shares soared 17% yesterday to close at $0.014 on strong volume of over 13 million shares.

    At one stage intra-day, the stock was up 33%.

    There was good reason for the investor interest as the company discovered gold from drilling under the South West Breccia (SWB) resource, which is part of Red Mountain's Lobo Project within the Philippines based Batangas Gold Project.

    The importance of the discovery is that it has the potential to build on the high-grade resource of 194,000 tonnes at 7.2g/t gold for 45,000 ounces of gold, which could then increase the economics of the recent Scoping Study.

    Drilling results included:

    Metallurgical hole intersects: 6.7 metres at 11.6 g/t gold; and 18 metres at 6.85 g/t gold, including 6 metres at 11.5g/t gold.

    Drilling below current pit design intersects: 6 metres at 7.16g/t gold, including 3 metres at 11.5g/t gold. (All intersections are downhole widths).

    Investors will now eagerly await deeper drillhole results.

    Batangas scoping study

    Recently Red Mountain delivered a scoping study, which estimated a low $16.7 million pre-production capital cost and attractive IRR of 70%, with projected life of mine revenue of A$134 million for Batangas.

    The study affirmed that Red Mining can move Batangas into production with achievable capex and attractive project metrics.

    The revenue is estimated over the initial 4.5 year mine life on production of 90,000 ounces of gold while net cash flow is estimated at $40 million. Payback is expected in 1.2 years.

    Average C3 are A$1050 per ounce while C1 cash costs are about A$769 per ounce.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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