Announcement

Very high grade gold results from RC drilling campaign at Cannon Gold Mine, WA

29 August 2017

Multiple very high grade Au results from RC drilling campaign at Cannon Gold Mine, WA

  • Drilling defined and extended the high grade zone below the open pit

  • Multiple results > 10 g/t Au over widths >10m, or 2m-5m true width

  • Results confirm a likely underground development scenario High grade gold remains open at depth

Excellent high grade gold intercepts confirm underground potential

Australian gold producer, Southern Gold Ltd is pleased to announce very high grade gold results from a 31 hole (2,851m) Reverse Circulation (RC) drill programme at the Company’s Cannon gold mine, near Kalgoorlie, WA. This programme was undertaken from the open pit access ramp to define and extend high grade gold zones below the open pit base in support of underground mine design. (Figure 1)

Figure 1: Cannon Mine with open pit outline, old block model grade distribution, conceptual underground mine design (blue solid) and RC drilling (black traces)

Highlight results include (all depths are downhole depths, see Table 1 for details):

BSRC276 - 10m @ 18.0g/t Au from 63m, including 5m @ 31.1 g/t Au from 66m

BSRC279 - 6m @ 25.9g/t Au from 44m, including 4m @ 34.9 g/t Au from 45m

BSRC283 - 12m @ 11.4 g/t Au from 53m, including 7m @ 17.7 g/t Au from 54m

BSRC290 - 22m @ 5.36 g/t Au from 44m, including 4m @ 9.9 g/t Au from 47m

BSRC296 - 12m @ 9.0 g/t Au from 57m, including 8m @ 11.1 g/t Au from 60m

BSRC301 - 17m @ 7.0 g/t Au from 46m, including 7m @ 7.9 g/t Au from 51m

BSRC303 - 13m @ 7.5 g/t Au from 56m, including 8m @ 10.8 g/t Au from 60m

In addition to the above, drill hole BSRC290 also identified a new parallel high-grade lens at depth below the main zone with 3m @ 15.2g/t Au from 79m downhole (see Figure 5).

Drilling Results in Extension and Confirmation of High Grade Zone

There were a number of significant intersections from the Cannon underground delineation drill program which are summarised in Table 1 and in more detail at the end of this announcement. The results highlight the continuing high grade Cannon gold ore shoots extending to at least the 170mRL with true thicknesses between 2m and 5m. Significantly parallel ore shoots with anomalous grade appear to be developing in the footwall at depth. The Cannon shear is also, based upon early interpretation of logging, steepening at depth and is possibly located to the east of its current modelled position.

Figure 2 is a cross-section along 6590150mN, with the original block model indicating that the ore shoots have a flatter orientation. Drill hole BSRC283 has confirmed that there is a steeper component to the high-grade zone (7m @ 17.7 g/t Au) which continues at depth. It is also evident that there is likely to be an uplift in contained gold mineralisation through this zone >10g/t Au over the original block model interpolation of between 2.5-7.5 g/t Au.

Figure 2: Section 6590150mN – BSRC283 with pit outline, shear and block model

To read the full announcement please download the pdf below:

20170829 Very high grade gold in Cannon RC drilling.pdf