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KGL Resources Delivers Resource Upgrade At Jervois

KGL Resources (ASX:KGL) has now delivered the highly-anticipated resource upgrade for the Jervois Copper-Silver-Gold Project in the Northern Territory.

At a glance the highlights include:

- 85% increase in Resource tonnes to 25.3Mt;
- 64% increase in contained copper to 280,000 tonnes;
- 61% increase in contained silver to 18.0Moz;
- 150% increase in contained lead/zinc to 120,000 tonnes;
- 63% increase in contained gold to 113,000 oz; and
- Additional exploration target of 50,000 to 150,000 tonnes copper.

The global resource at Jervois has increased to 25.3 million tonnes at 1.1% copper for 280,000 tonnes of contained copper, and 22.1g/t silver for 18 million ounces of contained silver.

The recent drilling success culminated in increasing the resource by 85% with the contained copper climbing 64%.

Jervois potential

While these numbers are already impressive, it could be just the beginning at Jervois.

Mineralisation remains open in all existing deposits and there are further prospects that are currently being drilled and evaluated.

These include Killeen, Morley and the recently identified mineralisation between Green Parrot and Cox's Find - which could in the future increase the resource base further.

Simon Milroy, managing director, commented: "The priority for our recent drilling program has been to substantially increase the resource and begin to assess the true potential of the project while identifying high‐grade zones at depth that could be amenable to underground mining.

"The drilling program that is currently under way has begun the process of upgrading the classification of the existing resource and assessing the potential of shallow mineralisation at several other prospects."

Drilling to date

KGL commenced resource extension drilling at the Jervois project in September 2013. The priority was to generate a substantial increase in the resources at Marshall‐Reward and Bellbird but also commence delineation of resources at the Cox's Find and Rockface prospects.

The program has achieved all the goals set and provided new insights on the resource.

Drilling at Bellbird has exceeded expectations with the resource continuing to grow in size.

Significantly, drilling has not closed off the resource with clear targets for further drilling and a distinct north plunge revealed.

A new mineralised trend was discovered at Bellbird East that has yet to be fully evaluated. Although narrow the mineralisation is likely to be within the Bellbird pit.

The Marshall‐Reward resource was extended and a new parallel resource was discovered ~50m east of Reward at East Reward.

More notable was the intersection of a high‐grade massive leadzinc sulphide zone at Reward that resulted in a large increase in the global lead‐zinc resource.

Further evaluation of the sulphide lenses is planned.

Shallow drilling in the weathered profile at Marshall‐Reward and Bellbird has revealed high‐grade supergene enriched mineralisation in the transition zone.

This enriched zone has improved the economics of the open pits and will be further evaluated by drilling currently in progress.

Exploration target

KGL has exceeded the upper end of the range for Exploration Potential included in the 2012 resource update of 5‐10Mt containing 50‐100,000t copper.

The new Exploration Potential of the larger deposits identified by H&S Consulting consists of areas peripheral to the current Inferred estimates within the interpreted mineral wireframes, unconstrained by depth.

This is estimated to be a combined total for Marshall‐Reward and Bellbird of 5 -12Mt at 1 to 1.3% copper and 12 to 20g/t silver at a 0.5% copper cut-off (50,000 to 150,000 tonnes Cu and 2 to 7 Mozs Ag).

The deposits are open at depth and there are additional possibilities along strike from the deposits

Analysis

The continued drilling success by KGL at Jervois has delivered an 85% overall increase in the resource tonnage, with contained copper climbing 64%, and increases in contained silver, lead-zinc and gold.

While 280,000 tonnes of contained copper is already significant, this could be just the beginning with an additional exploration target of 50,000 to 150,000 tonnes copper.

Key catalysts in the near-term include new drilling results which are targeting an increase in the confidence levels of the resource, and the DFS.

While the KGL share price has performed strongly recently increasing the market cap. to around $55 million, the company still holds $14.8 million in cash at the end of June 2014.

This provides an enterprise value of $40 million.

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