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South Boulder Mines: Duketon Farm Out A Success As Independence Group Discovers Visible Gold

South Boulder Mines (ASX: STB) and joint venture partner Independence Group (ASX: IGO) are certainly proving up the highly prospective nature of their landholding in the Duketon Greenstone Belt with bonanza gold grades delivered through a recent successful diamond drilling campaign.

Demonstrating the quality asset the partners already have, diamond drilling has uncovered intersections of 2.36 metres at 59.78 grams per tonne (g/t) gold from 218 metres, including 0.85 metres at 164g/t.

The Duketon Gold Project lies adjacent, proximal and along strike to Regis Resources' (ASX: RRL) plus-2.2 million ounce Moolart Well Mine and plus-2.1 million ounce Garden Well Development.

Scheduled combined total production for the Duketon Gold Belt is 350,000 ounces by 2012-13.

The high grade intercept, which is open in all directions, occurs adjacent to a regional disseminated nickel sulphide occurrence.

Widespread gold occurrences were previously intersected in the area, including at the Terminator deposit, where high grades were intersected in reverse circulation drilling in 2009.

Drilling at the new, near-surface Terminator deposit has previously intersected 36 metres at 1.3g/t gold from 2 metres, including 10 metres at 4.25g/t from 3 metres.

Mineralisation at Duketon has been defined over 400 metres of strike and is open in all directions.

Lorry Hughes, managing director of South Boulder Mines, said the result highlighted the potential of the Duketon Project.

"The Duketon Project is a quality asset where I am confident that further discoveries will be made in the near term.

"The ground is adjacent and along strike from producing mines as well as new discoveries so the potential for more discoveries is high.

"These results will be assessed within a regional framework which will undoubtedly generate further gold targets."

Cash-backed

South Boulder is sufficiently funded to carry out exploration on its portfolio of projects, which also includes the Colluli Potash Project in Eritrea, which is now a Tier 1 asset hosting 194 million tonnes of contained potash.

The company holds around A$20 million in liquid assets and option conversions ($6.7 million) as of the end of the March quarter.

Joint venture with Independence Group

Independence Group is earning 70% of the of the nickel rights on the Duketon permit by sole funding exploration and development through to the completion of a Bankable Feasibility Study.

South Boulder owns 100% of the gold rights where gold is not required to be produced as part of any proposed nickel development.

Analysis

South Boulder Mines will no doubt be closely watched by investors as it follows up on this impressive discovery at Duketon.

The project lies adjacent, proximal and along strike to Regis Resources' (ASX: RRL) plus-2.2 million ounce Moolart Well Mine and plus-2.1 million ounce Garden Well Development.

This new discovery has the potential to establish a commercial gold operation in the vicinity of other mines already in development or production, which could mean shared infrastructure arrangements and lower capital costs for development.

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