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Alkane Resources Discovers Gold Zones At The Elsienora Project

Alkane Resources' (ASX:ALK) scout drilling has identified two zones of gold mineralisation at the Elsienora Project in western New South Wales.

The first was intersected at the Cuddyong Prospect and a second was identified in unrelated zone of gold-silver-barium mineralisation at the Picker Prospect.

Alkane can acquire an 80% interest in EL 6082 and EL 6767, which make up the Elsienora Project, from Balamara Resources(ASX:BMB) by spending $500,000 on exploration over three years from August 2013. This includes a minimum $250,000 spend over two years.

After Alkane has earned the 80% interest, Balamara will have the option to pro-rata contribute or dilute.

Results from the Cuddyong Prospect are:

- ELRC001 29 metres at 1.53 grams per tonne gold from surface including 4 metres at 5.86g/t gold from 10 metres; and
- ELRC003 8 metres at 3.14g/t gold from 30 metres including 4 metres at 5.72g/t gold from 30 metres and 5 metres at 2.03g/t gold from 69 metres.

Holes at the Picker Prospect returned:

- ELRC008 18 metres at 0.44g/t gold, 5.4g/t silver and 0.18% barium from 27 metres; and
- ELRC012 8 metres at 0.55g/t gold, 23.2g/t silver and 0.24% barium from 26 metres including 3 metres at 0.94g/t gold, 32.5g/t silver and 0.24% barium from 26 metres.

Scout Drilling

The results were returned from a 1,516 metre scout reverse circulation drilling program to test surface geochemical and geological targets.

Drill holes ELRC001-004 and ELRC010-011 were completed at the Cuddyong Prospect and intersected variable widths of mineralisation hosted by quartz veining within a moderately west dipping unit of very strongly clay weathered mafic to intermediate volcanics.

The results are broadly consistent with those reported by previous explorers Telberth NL and Cluff Minerals (Australia) Ltd.

Previous explorers also reported higher grade results from sampling of underground workings in the area however due to the rehabilitation of these historic workings and the poor location records of this sampling it is not known if the current holes tested these zones of mineralisation.

Further work is required to assess the strike extents of the Cuddyong Prospect mineralisation which lies within the broad low level soil geochemistry anomaly (gold >10ppb, up to 1750ppb) extending over 400-500 metres.
Two drill holes, ELRC005 and 006 tested the Nobbs Reef Prospect but did not replicate results reported by previous explorers and this prospect has been downgraded.

The remaining drill holes were completed as single scout holes testing surface geochemical anomalies along the previously designated Picker-Barite Trend, a zone of sulphide rich argillic altered volcaniclastic rocks with an intermittent barite rich horizon.

This zone had not been subject to any previous drilling.

Mineralisation identified along this trend is characteristically different to that at Cuddyong being associated with anomalously high silver and barium values.

The mineralisation does not report anomalous lead or zinc values that would normally be associated with a volcanic hosted massive sulphide (VHMS) style of mineralisation.

However it does appear to be situated at or near the same stratigraphic level as the Elsienora Prospect, located 1 kilometre to the southeast, where previous explorers have intersected base metal grades such as 1.78 metres grading 7.54% zinc and 3.48% lead as well as 2.6 metres grading 8.54% zinc and 3.16% lead.

Elsienora Project

The geology of the project area comprises a package of variably pyritic, intermediate to felsic volcaniclastics which hosts several zones of elevated gold geochemistry.

Two broad styles of gold mineralisation are recognised, the most common are typically small, sulphide poor quartz veins.

A less common style is characterised by sulphide-rich disseminated mineralisation associated with pervasively argillic-altered volcaniclastics.

This second style appears to be related to earlier sub-seafloor processes, with several similarities to McPhillamys-style mineralisation and with greater bulk tonnage mining potential.

Analysis

While exploration at the Elsienora Project is at its early stages, the widely spaced reconnaissance holes have confirmed the targets for McPhillamys style gold as well as the presence of a VHMS system (the silver-barite plus earlier base metal intersections).

Alkane Resources has spent about $300,000 to date and had previously carried out geological mapping as well as soil sampling.

More extensive drilling is being planned to expand known mineralisation and test other targets though there is no timetable for this activity as yet.

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