The Bulong Gold Project is located 30 km east of the world class Kalgoorlie Goldfield in Western Australia (Figure 1). The delineation of the Cannon Gold Resource in an area better known for its laterite nickel potential, highlights the prospectivity of the project area and supports the Company's view of its high potential for the discovery of additional gold deposits.
Figure 1. Southern Gold's WA tenement package. The map shows the proximity of Southern Gold's tenements to holdings of neighbouring companies with market capitalisations greater than $70 million. It also shows the proximity to a number of nearby gold processing facilities (gold mills).
The project area totals approximately 250 km2 and is referred to collectively as the Bulong Gold Project (Figure 1). It comprises 100% Southern Gold held tenements and 80% Southern Gold joint venture holdings.
Southern Gold's results to date, the location of nearby infrastructure and processing facilities around Kalgoorlie (Figure 1) and higher recent gold prices, all add to the Company's enthusiasm for developing the Bulong Gold Project.
Southern Gold Key Exploration Principles at Bulong
- Targeting an area with little modern, systematic gold exploration
- Acquisition of a high quality regional auger geochemical dataset
- Generation of robust gold and pathfinder anomalies aided by regolith-landform analyses
- Acquisition of high resolution geophysics to identify prospective geological structures
- Development of predictive structural models to assist with targeting gold mineralisation
- Integration of all datasets to enable ranking of geochemical anomalies and structural targets
Cannon Gold Deposit – Near Term Value Growth
The Cannon Gold Resource is currently the main focus of Southern Gold's exploration effort at Bulong and is the project's maiden gold resource (Table 1). Southern Gold has taken Cannon through from initial discovery to a Pre-Feasibility Study completed in 2013. Mine development has been approved by the Board, subject to securing finance and regulatory approvals and is targeted to commence in the first half of 2014.
Cannon Trend – Mid Term Value Growth
The Cannon Trend is a northeast-southwest trending line of gold-in soil anomalies which links the Cannon Gold Resource, Arsenal, Pinner, Homerton and Monument prospects (Figure 2). Exploration along the Cannon Trend has the dual aims of locating new stand-alone discoveries as well as identifying shallow, near-resource, easily extractable ounces to enhance profitability of exploitation of the Cannon Gold Resource.
Exploration drilling along this trend to date has built Southern Gold's knowledge of the gold mineralisation and alteration in the area and is achieving significant results. A maiden Inferred resource for Pinner was released in 2013 of 172,000 t @ 2.1 g/t for 11,500 oz Au (Table 1).
Table 1. Bulong Gold Project, Global Resources: Gold Mineral Resource Estimate (1.0 g/t Au Cut-off).(1) See ASX release 29/01/2013.
Note (1): Rounding affects totals.
The discovery of broad, high grade gold zones which form the Cannon Resource highlights the effectiveness of auger soil geochemistry and the potential significance of other gold intersections along the Cannon Trend. Ranking of the gold-in-soil anomalies is assisted by regolith and landform analysis plus detailed ground geophysics. This approach has proven successful at Arsenal where reverse circulation (RC) drilling intersected a significant zone of typical Goldfields-style hydrothermal alteration, similar to that at the adjacent Cannon Gold Deposit. Encouraging gold intercepts at the Monument and Pinner prospects in lithological settings different to that at Cannon have confirmed Southern Gold's interpretation of larger-scale structural controls on mineralisation along the Cannon Trend, further adding to the prospectivity of the area (Figure 2).
Figure 2. Cannon Trend gold-in-soil anomalies and the Cannon Gold Resource.
Regional Exploration – Value Growth for the Future
The positive results from the Bulong Gold Project reinforces Southern Gold's belief that the Bulong area has been underexplored for gold and that further regional exploration programs are likely to discover additional gold mineralisation.
Southern Gold has completed regional auger sampling over a large area of previously untested ground and delineated a number of new gold and pathfinder anomalies. Follow up work including interrogation of the geochemical dataset in conjunction with regolith and landform analyses, geological and structural mapping, acquisition of detailed ground geophysics and integration with structural and geological models is being completed to first evaluate and then prioritise anomalies for drill testing.
Sub-audio magnetic (SAM) surveys have been carried out over a number of target areas within the project (Figure 3). The SAM geophysical technique aims to identify potentially mineralised structures under cover and has achieved positive results so far for Southern Gold in terms of enabling cost-effective, focused drilling of advanced targets, plus the refinement of new drill targets.
Figure 3. Bulong Gold Project - Areas of detailed SAM geophysical surveys overlying 1:500,000 scale geology.
Whilst the Company is focused on gold, Southern Gold also recognises that the Bulong terrain is prospective for base and other precious metals and incorporates this into its exploration approach.
Competent Person's Statements
The information in this report that relates to Exploration Results has been compiled under the supervision of Mr Ian Blucher (MAusIMM). Mr Blucher, who is a full time employee of Southern Gold Limited and a Member of the Australasian Institute of Mining and Metallurgy, has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Blucher consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled by Mr Ian Blucher (MAusIMM). Mr Blucher, who is a full time employee of Southern Gold Limited and a Member of the Australasian Institute of Mining and Metallurgy, has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Blucher consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.