Kentor Gold (ASX: KGL) has intersected high grade, near surface mineralisation at the company's Jervois Copper Silver Gold Project in the Northern Territory, supporting the decision to fast track a Feasibility Study.
Two diamond rigs and one reverse circulation rig are in operation at Jervois, with the first results from the 2012 program at the project confirming open pit mining potential.
Assays from the drilling program so far include a highlight intercept of:
- 33.8 metres at 1.79% copper, 0.28% lead, 0.34% zinc, 28.48 grams per tonne (g/t) silver and 0.29g/t gold from 17.6 metres, including 13.2 metres at 3.39% copper, 0.19% lead, 0.32% zinc, 43.29g/t silver and 0.56g/t gold.
Kentor managing director Simon Milroy told Proactive Investors today that the company was spending the first three months of the Feasibility Study on drilling.
"The drilling's serving three purposes, one is to source some metallurgical testwork samples for the Feasibility Study, the second is to infill and upgrade the Resource, and the third is extensional drilling, so down depth and along strike from the existing resource to increase the size of it," Milroy said.
"We think the Resource has got a lot of upside so what we want to do is do all the drilling then do a Resource upgrade.
So far, 3,044 metres of the planned 10,447 metres of reverse circulation drilling has been completed, along with 2,926 metres of the planned 5,459 metres of diamond drilling.
Milroy said the near surface nature of the first assay to be returned was particularly promising for the Jervois project.
"This is the very upper end of the ore body," Milroy said, "you're looking at just the top of a very large ore body."
The current drilling program at Jervois is expected to be completed in July 2012.
Drilling at Jervois is designed to increase confidence in the project as Kentor moves rapidly towards a Feasibility Study.
The decision to fast track feasibility follows last month's Scoping Study, which found that Jervois would be a robust project producing strong financial returns and examined annual processing rates of 1.5 million tonnes per annum (Mtpa), 2 Mtpa and 2.5 Mtpa.
Groundwater investigation work will commence this month, with the aim of confirming the proposed locations for water bores in advance of permitting.
Potential acquifers in the Arunta domain in which the mine sequence is located and Georgina Basin Sediments will be tested to establish a sustainable water supply for the project.
Kentor looks strong from a financial position, closing the March quarter with total cash reserves of $27.4 million.
In addition, Kentor is set to join the ranks of Australian gold producers in less than two months, with the company on schedule for the first gold pour from the Murchison Gold Project in June 2012.
Initial production rates are forecast at 24,000 ounces per year from a combination of open pit and underground mining.
Based on the current US$1605 spot price, this would create gross revenue of more than US$38.5 million in the first year of operation.
Milroy told Proactive Investors that revenue from operations at Murchison will support the Feasibility Study at Jervois.
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