Monday, 25 July 2011

Auzex Resources infill drilling hits more high grade gold at 2Moz Bullabulling JV Project

Auzex Resources (ASX: AZX) has expanded the phase two reverse circulation (RC) resource drilling program at the 2 million gold ounce Bullabulling Gold project to 90,000 metres, intersecting high grade gold that underpins confidence in the project.

A key aim of the phase two resource drilling program is to infill the current and historic drilling to allow the current Inferred Resource to be reclassified to the Indicated Resource category, and in turn enable initial JORC Reserves to be established for the project.

The JV is in the process of reviewing the optimum processing rate based on operating and capital costs, to be used in a Feasibility Study that will assess the economic potential of the project.

A total of 96 drill holes have been completed totalling 17,121 metres and results continue to confirm the current resource model and include new high grade intersections.

Highlights include:

- 2 metres at 14.20 grams per tonne (g/t) gold;
- 5 metres at 14.09g/t gold; and
- 4 metres at 10.61g/t gold.

The drill program commenced in mid May 2011 and was extended following the recent Joint Venture meeting between Auzex and GGG (ASX: GGB; AIM: GGG) and is expected to be completed in the next 6 months. The next JV meeting is scheduled for late August 2011.

The focus for the JV is to establish an initial reserve exceeding one million ounces gold to commence production in 2013. The JV are in advanced talks with their resource consultant Snowden for an updated Resource at  Bullabulling.

Bullabulling is located near Coolgardie and approximately 65km south-west of Kalgoorlie, Western Australia, and has been previously been mined producing 371,000 ounces gold in the 1990’s.

The current program focuses on the 6 kilometres portion of the shear zone known as the Bullabulling Trend where previous operations were concentrated.

The three drill rigs currently working on the phase two program are concentrating on infilling the remaining historic drilling between Phoenix and Hobbit and assessing the significant exploration targets to the south of the main Bullabulling Trend.

These targets include Sphinx, Edwards, Medusa, Gryphon, Kraken and Minotaur which are along strike and within 2 kilometres of the main project area.

Previous rotary air blast (RAB) drilling intersected widespread gold mineralisation which is expected to lead to a significant increase in resource at Bullabulling. Additional drill rigs are being contemplated to accelerate the Phase Two program.

The current JORC Resource at Bullabulling is; 41,517,000 tonnes at 1.48g/t gold for 1.98 million ounces of gold at a 0.7g/t gold cut-off.

The company is in the process of finalising a deep drilling program to test for high grade mineralisation (+5 g/t gold) below the current resource limit and should commence during the current quarter.

Drilling at Bullabulling to date has focussed on the near surface open-pittable resource over the 6 kilometre long Bullabulling Trend.

There are numerous examples in the Eastern Goldfields of deposits being mined for low grade near surface resources which have been shown to be part of a much larger mineralisation system extending to depth.

Recent alteration mapping and geological modelling has indicated potential for high grade gold mineralisation at depth within the Bullabulling project area.

On July 25 Auzex received notice from GGG that the company has extended its off-market takeover period again - this time to 5 September 2011. Both companies hold a 50:50 share of Bullabulling.

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