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Paynes Find Gold Readies For WA Drilling, Gold Pour Within Weeks

Paynes Find Gold (ASX: PNE) is continuing assessment and development of its interests in the historic Paynes Find Goldfield in Western Australia, to generate further targets for testing as part of a planned Stage 3 drilling program.

Highlighting the prospectivity of the area, drilling in late-2012 as part of the Stage 2 program delivered; 3 metres at 92.1g/t gold from 41 metres, including 1 metres at 271g/t gold.

Separately, the company is set to pour the first gold bar from its small scale mining operations in coming weeks.

While a number of high grade gold targets have already been defined for planned Stage 3 drilling, geological and structural reviews have identified further targets.

As part of this, the company is carrying out an extensive multi-element geochemical soil sampling to compliment and extend the 2011 geochemical soil survey.

Significantly, this work is aimed at extending previously identified mineralised zones into areas of limited outcrop and underneath cover, including areas where surface gold anomalism and activity has previously been noted. Results from this survey are expected to be available in early May 2013.

Structural Study

Other work carried out by Paynes Find on the project includes a recently completed Structural Study by independent geological consultants CSA Global that has correlated for the first time, all available diamond core and reverse circulation drill data with surface and underground mapping.

This has enabled a better understanding of the structural controls on gold mineralisation with implications for exploration targeting from regional to mine scale.

In additional, recent reviews have indicated that additional work is required to test for medium to large scale gold systems within the broader tenement package that hosts the Paynes Find Goldfield.

Three distinct mineralised styles have been identified:
- Shear-related quartz veining indicated by high-grade gold within segmented and boudinaged quartz veins within the gneissic units, associated with a discrete shear fabric (Type 1);
- Consistent gold mineralisation along the sheared contact between mafic amphibolite and gneiss (Type 2); and
- Quartz veining containing gold mineralisation in the western mafic / ultramafic sequence (Type 3).

Previous drilling successfully demonstrated the high-grade nature of shear-related gold-bearing quartz lodes, which were the target of historical mining activities within the gneiss (Type 1).

These lodes were the focus for most of the Stage 1 and Stage 2 drilling carried out by the company.

Gold-bearing veins pinch and swell, with lenses generally extending from 5 metres to 20 metres in length and 1 metre to 5 metres in width, pinching to sub-metre widths between richer plunging shoots.

Most historic workings follow individual lenses along a prominent steep south-westerly plunge (~75°), often to 100's of metres depth.

This shoot geometry shows good continuity and a large lateral extent for the gold mineralising system. Intersecting these high-grade zones effectively with conventionally-orientated drilling is considered difficult unless vein density is high.

These studies and the results provide the economic and geological rationale to continue further drilling to assess the real potential of the tenements at large.

They also represent an important step forward in understanding high-grade gold distribution in the Paynes Find Goldfield, giving the company a clear geological path to follow using a staged exploration approach as part of the forthcoming Stage 3 drilling program.

Small Scale Mining

While preparations for the Stage 3 drilling are underway, the company has already placed itself in the position to generate cash flow with the start of mining from small scale open cast workings.

This is processed through its existing alluvial gravity circuit plant with mill and knudsen concentrator that is capable of processing 50 tonnes per hour.

Paynes Find has also entered into a toll processing agreement with a local contractor whereby all expenditure is borne by the contractor on a return to Paynes of a total 25% of off the top revenue.

Current expectations are targeting the processing of approximately 9,000 tonnes per month with an average head grade based on historical results of between 0.3 to 0.5 grams per tonne.

Paynes Find Gold Field

The company's tenement package encompasses most of the historic Paynes Find Goldfield, covering about 5.5 kilometres of strike, 2 kilometres wide, for about 940 hectares.

This area encompasses 36 historic underground gold mines, which produced ore at grades ranging from 15 grams per tonne gold to 150g/t.

Outcrop mapping of the area with most historic production has identified 41 gold mineralised quartz reefs over a width of 600 metres across the main northern section of the Paynes Find Goldfield.

This area has been the focus for all reported PNE drilling to date.

Stage 2 drilling had made a number of shallow high grade gold intersections including:

- 12 metres at 6.61 grams per tonne gold (g/t) from 10 metres;
- 3 metres at 8.04g/t gold from 45 metres;
- 3 metres at 8.05g/t gold from 77 metres; and
- 3 metres at 92.1g/t gold from 41 metres including 1 metres at 271g/t gold.

Quartz vein mineralisation outcrops continuously over a strike length of around 2,000 metres, before dipping beneath laterite cover to the south.

Little in the way of modern exploration work has been undertaken beneath this cover.

Historical activity has identified gold mineralisation over 3,000 metres further south and within various rock types flanking the main goldfield.

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