Silver Lake Resources decision to mine more likely at Wombola after higher than expected gold hits

Silver Lake Resources (ASX: SLR) is moving closer to a decision to mine at the Wombola Dam and the Wombola Pit, after the company hit higher than expected gold grades - and the best part the mineralisation has only been drill tested to 30 metres.

The definition drilling highlights from the Wombola Pit included:

- 2.0 metres at 17.0 grams per tonne (g/t) gold from 7 metres;
- 1.0 metre at 20.3 g/t gold from 2 metres;
- 1.0 metre at 23.5 g/t gold from 24 metres;
- 2.0 metres at 6.8 g/t gold from 25 metres; and
- 2.0 metres at 6.3 g/t gold from 7 metres.

Silver Lake now has both the Wombola Pit and Wombola Dam drilled to 30 metres, with mineralisation open at both deposits.

Les Davis, managing director, told Proactive Investors today that the drilling yielded higher grades than expected in some areas, and has shown that there are multiple stacked lodes within both deposits.

“The mining study is nearing completion for Wombola Dam and a decision to mine is expected this quarter followed by a decision to mine Wombola Pit in the December 2011 quarter.”

The Wombola Pit has a JORC Resource of 303,000 tonnes at 2.8 g/t gold for 26,800 ounces, with historical production of around 8,000 ounces.

Gold mineralisation occurs primarily within multiple narrow, steep north-west dipping structures hosted within the Wombola dolerite intrusive associated with narrow “en echelon” style stockwork quartz veining.

The latest results from the resource definition drilling will be used to complete the mining study.

Metallurgical test work has been completed and the ore is free milling and ideally suited for processing at the one million tonnes per annum Lakewood Gold Processing Facility located 40 kilometres away.

Currently Silver Lake has a resource base of 3 million gold ounces in the Mount Monger goldfield and the Murchison, with the company strategy to develop large production centres with multiple mines at each centre.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/17976/silver-lake-resources-decision-to-mine-more-likely-at-wombola-after-higher-than-expected-gold-hits-17976.html