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Kilo Gold aims to double 2 million ounce gold resource at Somituri

Kilo Gold (CVE:KGL, FRA:O2K) is a junior Canadian explorer with 7,000 km² of highly prospective Archean Kabalian greenstone located in the Kilo and Moto area of the Democratic Republic of Congo, where Rangold is developing the Kibali Mine, hosting 22.5 million ounces of gold. 

The Company has been drilling multiple targets at the Somituri Project, and has already fast tracked the definition of 2 million ounces of gold at Adumbi, and is seeking to double that resource over the next twelve months. Other Congolese properties include the Sihu Project, and the ERW joint venture with Rio Tinto, which is funding a major iron ore exploration effort.

The Somituri Project is held under 8 separate Exploitation Licenses that cover 641.51 km², are valid until 2039, and are located in the Territories of Mambasa and Wamba, 30 kilometres from the Village of Nia and 350 kilometres from Kisangani. Kilo holds a 71.25% interest in the Project, with 23.75% held by SOMITURI and 5% by the DRC Government. 

The Project area contains the Adumbi and Adumbi North gold Mines that were producing gold during the 1940’s, and closed in 1958. These mines reported a combined gold output of about 200,000 ounces from 500,000 tonnes of quartz veined ore that averaged 11 g/t Au. This ore was extracted from high grade veins that were situated close to the footwall limits of recently delineated gold mineralization, and plunged to a depth of 120 metres, where production ceased after it met the water table.

The Kitenge and Manzako Mines were located along strike and reported historical production of about 100,000 ounces prior to 1942, and confirm the prospectivity of the property. 

In March of 2011, Kilo announced its first NI 43-101 compliant resource estimate on the Adumbi Deposit, reporting an Inferred Resource of   46,307,259 tonnes at 1.37 g/t Au, at a cut off grade of 0.50 g/t, for 2.03 million ounces of gold. This estimate was based on 25 drill holes, spaced in fences and set at 80 metre intervals, and was supported by sampling of 4 adits and 12 trenches, which all demonstrated robust continuity of the gold mineralization along strike and at depth.

The gold mineralization at Adumbi is contained within a banded iron formation that has been drilled over a strike length of 1,200 metres, and is known to extend for at least 5,000 metres that can be identified by artisanal mining activity along the BIF unit.  The gold mineralization is associated with quartz veins and veinlets within the BIF unit, which also contains a sulfide content range of 3 to 10%, with gold occurring with late stage pyrite. 

This mineralization commences at surface and is open pittable. Early metallurgical testing confirms that simple carbon in leach technology will recover gold from the oxides, which appear to be suited to heap leach processing.  

Company management indicates that significant potential exists for additional resource ounces at Adumbi from infill drilling, and drilling along strike, and at depth, where the resource remains open. Additional drilling through the footwall zone also has potential to increase both grades and resource ounces across the deposit, and to convert Inferred Resources to Indicated Resources. 

North Adumbi is located approximately 1,000 metres to the northwest of Adumbi, and represents an extension of the mineralized strike line at Adumbi. 

The Kitenge and Manzako Prospects are located 4,000 to 5,000 metres along strike, and to the south east of Adumbi, and are highly prospective for additional gold resource ounces.

1,711 metres of drilling and a major trenching effort at Kitenge has defined gold mineralization over 2,000 metres of strike. Recent results include 21.4 g/t Au over 0.95 metres and 1.89 g/t Au over 8.15 metres. 

Manzako carries a series of parallel gold bearing quartz veins over a 2,500 metre strike length and width of 500 metres. Approximately 2,000 metres of this strike was developed with 1,015 meters of drilling and extensive trenching. Drilling highlights include 9.92 g/t Au over 5 metres and 9.37 g/t Au over 4.70 metres. 

Trench SMTR003 reported extremely high grades with 31.70 metres of trench reporting 4.39 g/t Au, included 13.60 metres at 8.99 g/t Au. This area obviously features the surface expression of a richly mineralized system and has been sampled and tested. The area will be drilled to define the tenor of the rich mineralization. 

The currently inferred resource was defined over a period of 24 months utilizing 2 drills. Kilo now plans to deploy 4 drills and to fast track the probing and delineation of fresh resources. This program will complete 20,000 metres of drilling and aims to increase inferred resources by an additional 2 million ounces. 2 rigs will be deployed at Adumbi to increase the size and quality of the resource and to probe along strike and at depth. The other 2 rigs will drill out Adumbi North, Kitenge, Manzako, Vatican and other targets within 10 kilometres of a proposed and centralized process plant. 

Mapping and trenching is also underway at multiple prospects and includes PE 9692, which is located 35 km from Adumbi, where surface sampling has defined 2 mineralized areas for testing.

The Company has established a 75/25 joint venture with Rio Tinto over the ERW properties, which contain a 100 kilometre long itabirite belt. High grade haematite, with grades exceeding 60%, and low in impurities, is known to enrich sections of this belt.   

The exploration effort will be aimed at defining significant iron ore resources over the large tenements that are located to the north of Somituri. Rio Tinto has committed to exploration expenditures of $15.75 million and cash payments to Kilo of $7.25 million in the first stage of the project, which completes in 2013.The second stage commits Rio Tinto to exploration expenditures of $50 million and cash payments to Kilo of $10 million. 

Kilo recently completed an equity funding of $10 million, and is cashed up to aggressively develop Somituri. The market appears to have heavily discounted the resource potential at Adumbi and ERW, and the other highly prospective drilling targets that are under development.