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KGL Resources commences drilling, Jervois resource upgrade on the way

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KGL Resources (ASX:KGL) has commenced a new reverse circulation drilling program covering 70 holes and 6000 metres at the Jervois Copper-Silver-Gold Project in the Northern Territory.

The company is well-funded with $14.8 million in cash at the end of June 2014.

Drilling is designed to upgrade near-surface resources to Measured and Indicated from Inferred, while testing several new exploration targets at Rockface, Killeen and Bellbird East.

KGL said that the resource estimate undertaken by H&S Consulting is anticipated to be released next week.

The estimate is highly anticipated following on from some results that Simon Milroy, managing director, recently termed as "extraordinary intersections".

The mineralisation at Green Parrot is both high grade and multi-metal - copper, lead, zinc, silver and gold, while being close to surface which strongly indicates the potential for open pit mining.

Recent highlights include: 6 metres at 8.55% copper, 15.08% lead, 10.95% zinc, 679.7g/t silver, 4.87g/t gold from 48 metres; and 2 metres at 31.5% copper, 5.96% lead, 1.77% zinc, 1240 g/t silver.


Resource update now complete

Milroy added today that the resource update is now complete except for the final classification of the resource.

"We have again used independent consultants H&S Consulting to undertake the resource update and the large volume of drilling and assaying undertaken by KGL has meant that this is a major revision.

“The update will include two new copper resources at Cox’s Find and Rockface. The Green Parrot Resource has not been updated since 2011 and high grade copper mineralisation intersected this year has meant significant extensions to this deposit.

"The new areas of high grade copper and lead mineralisation at Bellbird and Marshall/Reward have made the resource update more complex and hence time consuming.

KGL has now drilled more metres than all of the historical explorers at Jervois combined in order to realise the true potential of the project.


New drilling program

The new reverse circulation program will cover 70 holes and 6000 metres.

At Green Parrot, in-fill drilling will be conducted near hole JOC062 that intersected 18 metres at 4.92% copper, 1.54% lead and 240.5g/t silver from 10 metres under old workings to the north of the Green Parrot pit.

Green Parrot North was not previously included in the resource.

Deeper drilling will test for extensions to the high-grade Pb-Zn-Cu sulphide lens intersected in JOC176 that included: 6 metres at 8.55% copper, 15.08% lead, 10.95% zinc from 48 metres.

Shallow drilling at Rockface in June was designed to generate a maiden Inferred resource.

Drilling currently in progress will test for extensions to the resource to the east and west along strike. To the west prospecting has located new copper occurrences along the Rockface trend.

Drilling is also planned to test shallow copper workings along a newly identified trend at Bellbird East. Bellbird East is located 50 metres east of Bellbird and was discovered during the recently completed resource drilling program.

The southern extension of Bellbird East has not been drilled previously. Although narrow, Bellbird East is significant because it is likely to be within the Bellbird open pit.

Killeen is a Zn-Pb prospect located between Bellbird and Rockface with several historical drill holes in an area untested by KGL.

Previous results include: 8 metres at 5.98% zinc, 1.1% lead from 33 metres, including 2 metres at 2.84% copper in RJ076 and 4 metres at 11.49% zinc, 1.6% lead and 0.48% copper.

Planned drilling will in-fill previous coverage and allow a maiden resource
estimate.

Drilling will also target an outcropping gossan along strike to the west that may represent an extension to this mineralisation.


Reward


Preparation of the drill pad for the deep diamond drill hole under Reward is now complete with drilling planned to commence later this week.

This deep drill hole is designed as a stratigraphic hole to give us a better understanding of the style of the deposit and to locate extensions 200-400m below the current resource boundary.

The existing collaborative research program at Jervois has now been expanded to include analysis of results from this drilling and further build on the understanding of controls and vectors for mineralisation.


Analysis


KGL has now commenced a new drilling program targeted at increasing the confidence category of resources to Measured and Inferred from Indicated.

Extension drilling will also be conducted testing for new mineralisation.

The company has said that the resource update is now complete except for the final classification of the resource, and is anticipated to be released next week.

A DFS will follow the resource upgrade.

KGL remains well-funded with $14.8 million in cash at the end of June 2014.


Quick facts: KGL Resources Ltd

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