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Kentor Gold: High Grade Gold Strikes At Alliance Pit Have Potential To Add To Murchison Resource

Kentor Gold (ASX: KGL) has intercepted high grade gold adjacent to the historical Alliance Pit at the company's Murchison Gold Project in Western Australia.

The Alliance pit is expected to be added to the current mining plan for the Murchison project, where production is expected to begin from mid-2012.

Results from the latest drilling at Alliance include a peak grade of 1 metre at 23 grams per tonne (g/t) gold from 72 metres.

Other intercepts include:

- 2 metres at 12.7g/t gold from 64 metres;
- 9 metres at 4.1 grams per tonne (g/t) gold from 62 metres, including 2 metres at 14.4g/t gold; and
- 11 metres at 3.6g/t gold from 50 metres, including 4 metres at 7.8g/t gold.

Kentor managing director Simon Milroy said; "These latest results present the potential for further increases in high grade Resources at the Murchison Project, increased overall production and lower production costs.

"The known resources at Alliance are not included in the current Phase 1 mining plan. Now that we have successfully completed the drilling at Alliance, resource modelling and pit optimisation will take place and it is likely that the Alliance pit will be added to the current mining plan."

Importantly, the existing pit at Alliance is just 2 kilometres south from the Murchison project gold processing plant at the Burnakura prospect, and is adjacent to the main haul road.

The current drilling program is due to be completed in the June quarter, and will be followed by a Resource update that will allow a JORC Reserve estimation to be completed.

Samples from resource drilling at a number of gold deposits within the Murchison project are being sent to the laboratory for testing.

The drill rig will be moved to the Lewis pit at the Burnakura prospect to close off high grade mineralisation that was identified in a previous drilling campaign.

Kentor has been intersecting continued high grade gold at Lewis, with previous results including bonanza grade intercepts of 1 metre at 474.5g/t gold within a broader intercept of 5 metres at 102.2g/t gold from 43 metres.

Murchison production

The Murchison Gold Project comprises the Burnakura gold and Gabanintha copper-gold prospects. The first phase of a four phase development program is underway, with production scheduled to commence at Burnakura from the middle of this year.

Initial production will be at a rate of 24,000 ounces of gold per year, from the Lewis and Richard pits, with an expansion planned for next year.

A scoping study is underway for a heap leach operation, which will comprise Phase 2 of the development program, planned for next year.

Low grade material from the Alliance pit has been included in this test program, and is displaying high recoveries from coarse material in the bottle roll tests. This indicates potential for low grade material from Alliance to be dump leached.

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