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Allied Gold keeps finding more of the good stuff at Pigiput Deposit

Papua New Guinea-focused gold producer and explorer developer Allied Gold is paving a rosy outlook for the Pigiput Deposit after receiving additional high-grade gold assays from diamond core holes drilled at the Deposit.

Executive Director and Chief Executive Mark Caruso said the news further supported the deposit's 100,000oz per annum Sulphide Development Study.

Gold assays were received for samples from 11 diamond core holes, with the best down hole intercepts including SDH061 44m @ 1.12g/t Au from 254m in SU, SDH062 27m @ 1.65g/t Au from 94m in SU, SDH063 61m @ 1.81g/t Au from 158m in SU, SDH064 7m @ 4.95g/t Au from 128m in SU, SDH065 53m @ 3.38g/t Au from 128m in SU and SDH066 5m @ 6.02g/t Au from 298m in SU.

Shares in the company last traded on the Australian Securities Exchange for 30c.

A further seven holes were completed and two are in progress, with the holes part of a ongoing three phase in-fill and step-out program, commenced in May 2009, designed to support the A$10 million Sulphide and Oxide Expansion Studies based around the Pigiput Deposit.

Mr Caruso said the studies target increasing total oxide and sulphide production to in excess of 200,000oz p.a. by 2012.

"Allied Gold is actively undertaking in-fill and step-out diamond core drilling the Pigiput Prospect, in the central part of mining lease ML136 with three diamond core drill rigs dedicated to the task," Mr Caruso said.

"The Phase II program will be completed by end January 2010 and Phase III will continue through the March ’10 Quarter."

At Pigiput, core drilling is being used to in-fill and extend the drilling coverage, aiming to increase resources in sulphide, currently classified as Indicated and Inferred, to a higher category.

From start-up in mid May to end December 2009, 45 exploration diamond core holes, totalling 12,656m, were completed. The current drilling program, Phase II, will be completed at end January 2010.

Both resources and reserves, for the Pigiput and adjacent Pigibo Deposits, are scheduled for re-estimation by the end of the first quarter in 2010.

Further drill testing of the extents of gold mineralistion at both prospects, is set to continue as Phase III.

Significant gold intercepts from diamond core drilling will further expand data available for resource update, scheduled for February.

Phase III drilling is set to continue testing open extensions at both Pigiput and Pigibo Deposits.

Allied Gold’s gold production and exploration development portfolio is centred on the Tabar Islands of Papua New Guinea, approximately 60 kilometres from Lihir Island which hosts a plus 40 million ounce gold resource and is well placed in the Pacific Rim of Fire.

In 2008-2009, Allied produced 72,609 ounces of gold. Studies are nearing completion on an expansion of the oxide plant from 2 Mtpa to 3 Mtpa to increase production to 100,000 oz pa.

A study focused on the sulphide resources is looking at the optional configuration for 100,000 oz pa sulphide operation which would lift group production towards 250,000 oz pa by 2012.



Disclosure: The author holds no positions in the company