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Stratum Metals Strikes Peak Intercept Of 37.1g/T Gold In Step Out Drilling At Gidgee North

Stratum Metals (ASX: SXT) has potential to expand gold mineralisation at the German Well South Prospect following broad and high grade gold results from recent step out drilling.

A peak intercept of 1 metre at 37.1 grams per tonne (g/t) gold was returned within a broader 21 metre intersection.

Highlights from the drilling program include:

- 21 at 5.25g/t gold from 117 metres, including 10 metres at 7.89g/t gold and 1 metre at 37.1g/t gold;
- 5 metres at 2.25g/t gold and 4 metres at 3.11g/t gold from 102 metres; and
- 12 metres at 1.51g/t gold from 46 metres, including 6 metres at 2.57g/t gold.

Drilling at Gidgee North has focused on stepping out to the north and south of drilling carried out in late 2011, which returned a bonanza grade intersection of 1 metre at 60.9 grams per tonne (g/t) gold, within a broader intersection of 8 metres at 8.89g/t gold from 41 metres.

Mineralisation remains open along strike in both directions and at depth.

Planning is underway for a Stage 2 reverse circulation drilling program, which is expected to commence in late June 2012.

Gidgee Gold Project

The Gidgee Gold Project, which comprises the Gidgee North and Gidgee South areas, is located 640 kilometres northeast of Perth in the Yilgarn region of Western Australia.

The Yilgarn has a long history of gold production and produces about 6% of Australia's gold.

Gidgee is surrounded by Panoramic Resources' (ASX: PAN) Gidgee Gold Project, which has a mining camp and process plant with a capacity of 600,000 tonnes per year of ore.

Stratum's plan is to fast track development of gold resources at Gidgee North and most likely strike a deal to utilise a nearby plant for ore processing.

With continued high grade gold results there exists potential for earlier low cost production given a nearby gold treatment plant.

Dual commodity focus

In addition to gold, Stratum has interests in two thermal coal prospective tenements in Western Australia's Canning Basin, an emerging coal province featuring outcrop from the prospective coal bearing Lightjack Formation.

Located about 150 kilometres southwest of Derby in the Kimberley, the Canning Basin is the largest onshore sedimentary basin in Western Australia.

Previous exploration in the area was carried out by Rio Tinto (ASX: RIO), with the large Canning Coal Project, part of which overlaps Stratum's current project area.

Importantly, Stratum has access to a potentially major market for its thermal coal project close at hand in India, where demand for coal to fuel high economic growth and development is insatiable.

By 2016, it is estimated that India will require over 1 billion tonnes of coal, a shortfall of 300 million tonnes it cannot produce.

Stratum's coal tenements are located close to transport infrastructure, with road access to the tenements.

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