Ausgold boosts Katanning resource to 3.04Moz, now largest free milling gold project in WA

The gold resource at the Katanning deposit has reached 3.04 million ounces following on what Ausgold (ASX: AUC) describes as a “highly successful” reverse circulation and diamond drilling program.

The latest increase in the resource to 89 million tonnes at 1.06 grams per tonne gold, for a contained 3.04Moz, makes Katanning the largest free milling, open cut gold project in the state, the company states.

This flagship project is located 275km southeast of Perth in the Great Southern region of Western Australia.

Supports long life gold operation

The drilling program has expanded the mineral resource at Katanning by 15% and has extended the size of the Northern, Central and Southern zones.

Some 80%, or 2.42Moz, of contained resources are now in the higher confidence measured and indicated categories.

Ausgold says this latest resource, and the amount in the higher classification categories, will support a long-life mining operation.

The majority of the resource sits above the 220 metres depth which makes it amenable to a stand-alone open pit operation.

More than 2Moz have been added to the resource over the past four years since the discovery of the Jinkas South deposit which represents an $11-per-ounce discovery cost.

Potential for underground mining as well

The increase by 400,000oz in the most recent drill program came from 17,305 metres completed in April.

The company says that the rapid, cost-effective resource growth reflects Ausgold’s improving understanding of the geology at Katanning.

This will aid in executing well-targeted future drilling.

Managing director Matthew Greentree said Katanning is now moving rapidly toward development.

“Importantly, the resource is far from closed-off,” he added.

“Our recent drilling has demonstrated the emergence of higher-grade positions within the resource.”

“These indicate the potential for future underground mining”, Mr Greentree said.

Significant intercepts since previous resource estimate

Among the results from this recent drilling were 4m at 17.05g/t, including 2m at 33.86g/t gold.

Other assays came back with 7m at 6.99g/t including 2m at 23.3g/t, and 12m at 3.88g/t including 11m at 4.19g/t gold.

The Central zone represents the majority of the resource at Katanning, and includes the Jinkas-White Dam, Olympia and Jackson lodes.