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Alkane Resources discovers new porphyry gold-copper zone in NSW

Last updated: 08:45 22 Jan 2015 GMT, First published: 09:45 22 Jan 2015 GMT

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Alkane Resources’ (ASX:ALK) drilling has identified a new zone of porphyry style gold-copper mineralisation at the Duke Prospect of its Kaiser Project in New South Wales' Central West region.

Mineralisation and alteration within the Duke Prospect cover an area of 450 metres by 200 metres.

Alkane has the right to earn a 100% interest in Kaiser following expenditure of $500,000 on exploration prior to 23 December 2015.

Key drilling results are:

- KSRC010: 16 metres at 0.87% copper, 0.57 grams per tonne (g/t) gold from 126 metres including four metres @ 1.45% copper, 0.78g/t gold from 128 metres and three metres @ 1.52% copper, 1.13 g/t gold from 139 metres and 14 metres @ 0.63% copper, 0.58 g/t gold from 151 metres within 112 metres @ 0.36% copper, 0.24 g/t gold from 115 metres; and

- KSRC011 54 metres @ 0.33% copper, 0.14 g/t gold from 72 metres including five metres @ 1.15% copper, 0.45 g/t gold from 73 metres and 79 metres @ 0.37% copper, 0.22g/t gold from 134 metres including three metres @ 0.85% copper, 0.52 g/t gold from 198 metres.

The Kaiser Project lies within the broader Bodangora Project where similar porphyry style gold-copper mineralisation associated with the Comobella Intrusive Complex (CIC) was identified by drilling in 2012 and highlights the potential of the area to host significant mineralisation.

Drilling Programme

The recent drilling programme comprising 1,672 metres in seven holes targeted two prospect areas.

McGregor, where porphyry style mineralisation was identified in early 2014 based on the initial reinterpretation of the geological model, and Duke, where structural interpretation of historical ground magnetic data and alteration vectoring identified a target area which had been poorly tested by previous explorers.

Drilling of the McGregor target was hampered by high water inflows and holes were abandoned prior to reaching target depth.

At Duke, porphyry mineralisation occurs within a large zone (450 metres by 200 metres) of encouraging alkali porphyry alteration.

Mineralisation appears to occur in three zones:

- The Central Zone, the most significant area of new mineralisation with historic drilling by CRA Exploration intersecting the margins of the target area. This new zone is best represented in KSRC010 which intersected several higher grade zones of mineralisation;

- The Western Zone, which is best represented by KSRC009 (12 metres at 0.2% copper and 0.82 g/t gold from surface). This is separated from the Central Zone by a north-south fault. Mineralisation is associated with magnetite bearing alteration with ground magnetic data indicating the zone remains untested to the north and is open at depth; and

- The Eastern Zone, a sub-vertical zone of mineralisation separated from the Central Zone by an unmineralised, later diorite intrusive. Mineralisation is associated with magnetite bearing alteration and was intersected in the top of hole KSRC010 (32 metres at 0.14% copper and 0.24 g/t gold from 26 metres) and at depth in historic Newcrest drill hole NKD002 (86 metres at 0.26% copper and 0.43 g/t gold from 421 metres).

An initial reverse circulation drilling programme undertaken in early 2014 and comprising five holes for a total of 1,094 metres tested the previously known Kaiser and Kaiser East prospects, and identified alkalic porphyry styled mineralisation at the previously unknown McGregor prospect to the west.

Ongoing assessment of existing exploration data incorporating, where possible, additional sampling of historic drill core has continued to highlight the association of existing mineralisation in the region with a hydrothermal alteration zonation typical of an alkalic porphyry gold-copper mineralised system.

Kaiser Project

The Kaiser Project (EL6209) is located at the northern extent of the Molong Volcanic Belt and is encompassed by Alkane’s Bodangora Project.

It was subject to limited historical mining activity between 1875 and the 1930s with intermittent exploration activity conducted since the 1960s.

The Molong Volcanic Belt is a well-defined geological region considered highly prospective for, and host to, several economically important examples of porphyry gold-copper mineralisation, e.g. Cadia Valley alkalic porphyry deposits.

Kaiser lies within the Bodangora Project where similar porphyry style gold-copper mineralisation associated with the Comobella Intrusive Complex (CIC) was identified by drilling in 2012.

The CIC is a four kilometres by three kilometres monzonite intrusive with associated alteration and skarn mineralisation located about seven kilometres northwest of Kaiser.

Alkane has a large tenement holding in the northern Molong Belt, a region emerging as highly prospective for alkalic porphyry gold-copper mineralisation. Multiple targets occur within the Bodangora, Kaiser and adjoining Finns Crossing projects.


Analysis

The discovery of a new zone of porphyry gold-copper at the Duke Prospect of the Kaiser Project is encouraging and demonstrates the potential of the broader Bodangora Project to host significant mineralisation.

This new mineralisation is best represented in the central zone, with one section showing 16 metres at 0.87% copper and 0.57 g/t gold along with several higher grades of mineralisation.

Adding to the interest, this has similarities to Newcrest’s Cadia-Ridgeway gold‐copper mine – a large scale mining operation in New South Wales’ Cadia Valley.

Over 7.5 million ounces of gold has been produced from Cadia Valley since commercial production commenced in 1999.

The discovery comes amidst a sustained rally in gold, with prices in Australian dollar reaching A$1,585 an ounce.


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