Red Mountain Mining (ASX:RMX) has confirmed the geological model at its Xinqu underground mine at the Zhongqu project in China’s Gansu Province after drilling the first 8 of the 15 holes in its Stage 2 drilling program.
The two underground rigs tasked with the job have drilled 1408.8 metres of the total 2430 metres to date and have intercepted some encouraging zones containing brecciation and hematite alteration.
These include Hole 18, targeting a previously reported 31 metres at 4.61 grams per tonne (g/t) gold, that encountered about 47 metres of potential mineralisation including 17 metres of brecciation and 20 metres of highly altered granodiorite with weak hematite alteration.
Red Mountain said this was probably close to true width and if mineralised, could reflect the previous grades.
Samples from the drilling have been sent to the SGS assay laboratory in Tianjin for analysis and results will be reported soon.
Red Mountain said the Stage 2 drilling program may be expanded subject to results and models developed from geological studies.
Additional holes are planned to follow up encouraging drill intercepts.
Following completion of Stage II drilling, the gold mineralisation encountered in both drilling programs will be modelled as the first step of bringing the mineralisation into a JORC compliant resource for the Xinqu mine.
The Zhongqu Project is located 260 kilometres southwest of the provincial capital of Lanzhou.
Red Mountain had encountered some promising gold intersections and mineralisation during the Stage 1 drilling program in the September 2011 quarter consisting of 31 metres at 4.61g/t gold, including 4 metres at 9.51g/t gold and 8 metres at 10.07g/t gold and 14.3 metres at 4.50g/t gold, including 6 metres at 7.14g/t gold and 3 metres at 6.27g/t gold.
The company also plans to carry out further drilling at the Diebu advanced exploration project later this year.
Red Mountain listed on the ASX in September 2011, following an extensive period of project evaluation before acquiring the Zhongqu project, an operational gold mine since 2005.
It has binding acquisition agreements to acquire 51% of the Zhongqu project, plus operating gold mine and infrastructure, as well as 90% of the Diebu project.
The company held A$5.63 million in cash as of the end of 2011.