Western Australian gold miner Red 5 (ASX: RED) has released positive assay results from a major drill program designed to advance the bulk mining opportunity at its King of the Hills (KOTH) gold operation.
The 30,000m drill program, undertaken along the Eastern Margin Contact Zone of the mine, returned wide zones of gold mineralisation, including an exceptional intercept of 312m grading 2.01 grams per tonne gold.
Other significant new composite intercepts within the current 1.88-million-ounce resource envelope were 313.7m at 1.24g/t gold, including 15.4m at 13.3g/t gold from 268m; and 222m at 1.28g/t gold, including 9.2m at 7.43g/t gold from 50.1m.
The results, which include numerous thick composite intercepts of significant gold mineralisation, provide further impetus to the bulk mining strategy at KOTH and are expected to contribute towards future increases in the resource at KOTH.
“These drilling results, together with the results being generated from the program of assaying unassayed historical drill core, are expected to contribute towards future increases in the KOTH bulk mining resource,” Red 5 managing director Mark Williams said.
Red 5 only announced a bulk mining mineral resource estimate for the Eastern Margin Contact zone of KOTH towards the end of 2018.
The indicated and inferred resource comprises 28.7 million tonnes grading 2.0g/t gold for an estimated 1.88Moz of contained gold at a 1g/t gold cut-off grade.
The resource triggered a strategic review of bulk mining options, in addition to the drill program.
Red 5 will carry on with the major underground diamond drilling program in the eastern goldfields, which is expected to be completed in the June 2019 quarter.
Red 5 cheers golden December quarter
The trickling in of assay results follow on from the company achieving “one of the most exciting periods” in its recent history.
The comment was made off the back of a strong December quarter, with Red 5 increasing gold production to 26,118oz, up from 21,609oz in the prior quarter. Gold sales for the three-month period totalled 27,149oz.
The company also reduced its all-in sustaining costs from $1,829 per ounce to $1,547/oz.
The December quarter marked a full 12 months since it assumed ownership of the Darlot and KOTH assets.
It’s forecasting to recover between 24,000-28,000oz of gold in the March quarter.
Red 5 had $14.6 million cash on hand at the end of December.