Media Release
Monday September 20, 2010
SOUTHERN GOLD LIMITED (ASX:SAU) TO URGENTLY EXPAND W.A. GOLDFIELD AFTER STRONG DEBUT RESOURCE FOR CANNON DEPOSIT
A maiden gold resource of nearly 80,000 ounces has been announced for a new goldfield near Kalgoorlie in Western Australia.
Project owner, Southern Gold Limited (ASX:SAU) today used the results to immediately announce an increase in exploration of the highly prospective ground around the resource to potentially build a larger goldfield by June next year, ahead of any considerations to mine.
Southern Gold announced today a maiden Indicated and Inferred resource of 79,100 ounces of gold at 3.1 grams per tonne (g/t) for the flagship Cannon deposit within the Company's wholly owned Bulong South project, just 30 kilometres southeast of Kalgoorlie.
Some 53% of the estimate is in the higher Indicated category with the gold mineralisation both continuous from surface and remaining open beyond 150 metres in depth.
"Bulong South is highly prospective for the discovery of multiple additional gold deposits," Southern Gold's Chairman, Mr Greg Boulton, said today.
"Critically, Cannon and at least another four of our advanced targets are contained within a less than a one and a half kilometre continuous southwest-northeast trend," Mr Boulton said.
"On the back of the early strong Cannon result, that gives us a lot of confidence of being able to add in the near-term to today's milestone resource outcome," he said.
"At a first pass glance, it could easily be interpreted that Cannon has immediate mining appeal but that it not our intention.
"The real value-add for our shareholders will come in moving on an urgent basis to build on the grades, shallowness and proximity to infrastructure of the Cannon gold deposit, by drilling out those other close targets to build a larger goldfield prior to any mining."
Under those auspices, Southern Gold also announced today it would significantly increase spending over the next nine months on new sampling and drilling work across the five priority Bulong South targets.
"That commitment represents our single largest exploration program to date at Bulong South and is indicative of the potential for higher gold resources Southern Gold believes lie await in this highly favourable geological, mining and processing province," Mr Boulton said.
The first work under this elevated exploration drive will comprise an October start on drill
targets including extensions of the Cannon deposit, in particular to the west and at depth and - the adjoining high priority Pinner, Homerton, Monument and Arsenal soil anomalies which exhibit similar orders of magnitude as those defined over the Cannon mineralisation.
In addition, Southern Gold has identified several new gold anomalies within a five kilometre radius of Cannon, offering Mr Boulton says, "the potential to further add to the resource base through infill geochemical sampling and or drill testing within the year".
Mr Boulton said development options for the Cannon gold deposit and the broader Bulong South project would continue to be assessed in parallel with results from the more intensive exploration programme detailed today.
