KGL Resources' (ASX:KGL) extensive 20,000 plus metre drilling program has delivered a significant increase in the confidence and tonnage of the resource at the company's Jervois Copper-Silver-Gold Project in the Northern Territory.
The resource has now swelled to 30.5 million tonnes at 1.07% copper and 23g/t silver for 327,000 tonnes of contained copper and 22.6 million ounces of contained silver.
Indicated resources jumped 36%.
Overall the resource grew by 5.2 million tonnes, or 21%, with contained copper climbing by 47,000 tonnes, or 17%.
The objective of the recent drilling was to upgrade the resources within the proposed open pit boundaries to increase confidence of the material delivered to the Mill in the early years of operation.
The upgraded resource will form the basis of an updated PFS expected in October.
Proactive Investors estimates the company's cash balance to be around $5 million, which would be sufficient to complete the PFS.
Once the PFS is completed, this is when KGL will have the opportunity to bring in strategic investors to fund the potential development of the project.
Highlights breakdown:
- 21% increase in Total Resource tonnes to 30.5 million tonnes;
- 36% increase in Indicated Resources to 11.5 million tonnes;
- 17% increase in contained copper to 327,000 tonnes;
- 26% increase in contained silver to 22.6 million ounces;
- 59% increase in contained lead/zinc to 190,000 tonnes; and
- Additional exploration target of 40,000 to 100,000 tonnes copper.
Simon Milroy, managing director, commented:
“The priority for our recent drilling program has been to upgrade the confidence in the resource for those critical first few years of mine life and step out drilling from some of the earlier high grade intercepts to increase the resource and begin to assess the true potential of the project.
"The drilling program assessed the potential of several zones of shallow mineralisation at other new prospects that had the potential to provide low cost open pit ore to the mill.
"Some of these new zones, previously fell within the planned pit outlines and hence were previously classified as waste.
“The 3DIP survey is now complete and it is anticipated that the results from the IP survey will define the potential for near surface mineralisation in new areas at Jervois that have not previously been explored. “
New exploration potential
H&S Consulting has identified exploration potential which consists of areas peripheral to the current Inferred estimates within the interpreted mineral wireframes, unconstrained by depth.
This is estimated to be a combined total for Marshall-Reward, Bellbird and Green Parrot of 4 to 8 million tonnes at 0.8 to 1.2% copper and 7 to 15g/t silver at a 0.5% copper cut off.
This potential therefore is 40,000 to 100,000 tonnes of copper and 1.5 to 5 million ounces of silver.
Adding prospectivity, the deposits are open at depth and there are additional possibilities along strike from the deposits.
Analysis
KGL Resources' extensive 20,000 plus metre drilling program has bared fruit and delivered a significant increase in the confidence and tonnage of the company's Jervois project.
The resource has now swelled to 30.5 million tonnes at 1.07% copper and 23g/t silver, while Indicated resources jumped 36%.
The updated resource block models are now being used as the basis for the pit optimisation and mine design.
This will lead to an updated mine schedule to be used in the optimised pre-feasibility study to be completed in October.
The significance of an updated PFS is this will provide the basis for a strategic investor to evaluate the project, and inject funding which could move the project towards development and production.
Proactive Investors estimates the company's cash balance to be around $5 million, which would be sufficient to complete the PFS.
Near term news:
The results of the 3DIP survey are expected to be finalised in the next few days.
Then drill testing of these anomalies will commence soon thereafter.
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