Kalgoorlie Mining Company continues to deliver at Bullant, 68% increase in gold resource

Kalgoorlie Mining Company (ASX: KMC) has lifted the overall total resource base by 68% to 250,000 ounces across its Bullant deposits within just five months of acquiring the gold Project.

Total Mineral Resources stands at 2,432,000 tonnes at 3.20 grams per tonne (g/t) gold for 250,000 ounces with a 1.0 g/t cut off grade.

The lift in resources was a result of the re-evaluation of the Wattle Bird resource, just 500 metres north of the Bullant Mine site, through a detailed program of validation.

The upgrade also comes within just two weeks of the company's transition into a cash generating gold miner at the Bullant Gold Mine by achieving first gold ore sales for the Bullant project in August 2011.

The company is now focused on the rapid development of the project through production ramp-up and targeted exploration to expand the project’s resource base.

The JORC Mineral Resource for Wattle Bird adds 100,800 ounces to the resource and further resource increases are considered highly likely.

This additional resource, together with the Bullant Project, is a significant milestone in Kalgoorlie Mining's aim to increase its resource base in the area.

The JORC resource material has been based on extensive work carried out over a 6 month period, which reviewed, collated and validated all data associated with the Wattle Bird Project.

The Wattle Bird resource model is based on an estimation conducted by a previous owner, Centaur Mining & Exploration in 1998.

The resource model has been previously used in publicly listed statements regarding the Wattle Bird Project.

The validation work reviewed all drill data, resource estimation parameters, the block model, as well as all supporting documentation.

More than 700 reverse circulation and diamond drill holes have been drilled in the area and were included in the resource. The validation of the drilling and survey quality concludes correct position and projection of these holes.

The company said the next undertaking for the project area is to incorporate the deeper diamond holes drilled that post-date the current resource. They have been drilled well below the current modelled mineralisation.

This will allow for further investigation and exploration targeting of the Wattle Bird resource, and to look for any depth extensions and upgrades.

Significantly, the close proximity of the Wattle Bird resource to the planned gold processing mill at the Bullant Gold Operation will provide significant additional ore feed.

The company expects that the ore mined from Wattle Bird will be hauled directly to the mill for processing without the need for costly double handling and transportation of the ore or the need for extensive haulage roads.

This represents a very favourable mining opportunity which the company intends to  progress aggressively.

Kalgoorlie said the resource at the Bullant Gold Project will continue to grow as the company defines the East Lode resource, expected December quarter, with stage two drilling completed.

Proactive Investors believes that the East Lode resource definition will grow the overall resource a further 5-10% ie. 12,500 to 25,000 oz gold.

A review of the entire Bullant resource model inherited from previous owners will be undertaken and is likely to be modelled with a lower gold grade cut-off to reflect higher gold prices.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19727/kalgoorlie-mining-company-continues-to-deliver-at-bullant-68-increase-in-gold-resource--19727.html