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Lachlan Star high grade gold hits outside 1.4m oz resource at CMD mine in Chile

Lachlan Star (ASX: LSA) is continuing to intersect gold outside the current resource at the CMD gold mine in Chile, with the latest highlight 9 metres at 7.40 grams per tonne (g/t) gold from 101 metres.

Essentially what is so important with the latest discoveries is the confirmation of both higher grade stand-alone gold mineralisation, as well as copper-gold mineralisation.

The high grade hit is only 100 metres from the existing Tres Perlas and Churrumata pits.

The other highlights were; 8 metres at 0.62g/t gold from 83 metres, and 30 metres at 0.14g/t gold and 0.53% copper from 35 metres.

Lachlan Star said the gold grades associated with the copper mineralisation appear to be similar to that mined by Teck Resources (NYSE: TCK) at the massive Andacollo mine next door.

Andacollo hosts resources of; 535 million tonnes at 0.37% copper and 0.12 grams per tonne (g/t) gold, highlighting the copper potential upside at CMD.

The latest drilling results for Lachlan Star provide the enticing potential that the copper and gold mineralisation between the adjoining open pits could be extracted with very low waste / ore rations due to the majority of the waste on either side of the mineralisation already being cut-back.

CMD currently hosts a JORC Resource of 1.4 million gold ounces, with a JORC Probable Reserve of; 5.8 million tonnes at 0.8g/t gold for 157,000 ounces.

The mine is an open pit heap leach gold mine that commenced production in 1995 and has historically produced around 830,000 gold ounces.

The company has an unhedged production of around 45,000 gold ounces annually.

In the March 2011 quarter the company produced 8,348 gold ounces at a C1 cash cost of US$840 an ounce, but importantly two-thirds of the ore mined for the period was outside the Reserve (10% of ore from Inferred Resource).