Paramount Mining Corporation (ASX: PCP) has drilled three holes in a next phase drilling campaign at Gunung Rosa in Indonesia which could result in an increase in the inferred mineable resources of gold, silver and base metal mineralisation.
Gunung Rosa hosts a JORC Resource of 358,832 ounces of gold and Reserves of 146,700 ounces of gold.
The current program has confirmed significantly wider intercepts of gold-copper-base metal mineralisation than previously determined from historic estimated exploration activities.
Paramount will hold a 72.25% interest in the project .
The diamond drilling campaign is part of Paramount's ongoing due diligence, designed to infill between drilled vein mineralisation - which will assess the changes in vein widths and grades within the main mineralised ore zone.
Highlights from the first three holes including:
- GRD014: 16.4 metres at 1.19 grams per tonne (g/t) gold, 4.10g/t silver and 0.18% copper, including 1.5 metres at 7.25g/t gold, 17.2g/t silver and 0.75% copper;
- GRD015: 23.0 metres at 1.49g/t gold, 5.5g/t silver and 0.88% zinc, including 3.30 metres at 5.26g/t gold, 19.1g/t silver and 2.44% copper; and
- GRD016: 20.4 metres at 0.25% zinc (width of mineralised envelope), including 3.40 metres at 2.84g/t gold with 0.7 metres at 10.30g/t silver.
The fourth hole confirms the high grades previously intersected in the central Cisudi section of the 900 metre long vein system, also over a wider zone.
- GRD017: 23.5 metres at 0.11% lead, 0.23% zinc (width of mineralised envelope), including 18.5 metres at 2.09g/t gold and 2.6g/t silver.
Mo Munshi, chairman, commented on the positive news: "These results are a valuable addition to our knowledge of the extent and controls on distribution of mineralisation in that they are likely to result in an increase in the inferred mineable resources of gold, silver and base metal mineralisation recognised at Gunung Rosa and point to potential to add significantly to inferred resources at depth."
What is significant about the drilling campaign is that the results support conclusions from the recent airborne magnetic survey that the wider mineralised intersections, associated with pervasive clay-silica alteration of the host rocks - which relate to faults bounding and cutting extensive intrusive breccias and porphyry bodies that characterise the host setting.
The variation in grade and intersection widths identified by Paramount is not unusual in mesothermal and epithermal systems, but it is the persistence of wide mineralised intersection widths that is encouraging.
Munshi added, "Our program of bulk metallurgical and beneficiation testing currently being undertaken in Perth will assist in defining the mineable extent of economic mineralisation now being drilled in these zones."
Development plan clearly outlined with production ramp-up
Paramount has already outlined a development plan for Gunung Rosa, which includes refurbishing the mine to operate under the existing valid Mining License - in the style of KRM's successful Way Linggo project.
Also of importance for the company is to complete metallurgical optimisation test-work targeting above 85% recoveries, improving on historic recoveries of 75%.
The plan is to produce 10,000 to 20,000 ounces of gold from existing development drives with access from declines from late 2013 at a cash cost of under US$500 a gold ounce - placing Paramount in the lowest quartile of producers.
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