Phoenix Gold lifts JORC Resources to 1.68 million ounces
Phoenix Gold (ASX: PXG) has boosted its total JORC Resources to 29.6 million tonnes at 1.8 grams per tonne (g/t) gold for 1.68 million ounces, representing a 72% increase from those contained in the prospectus of its Initial Public Offering (IPO) released in October, 2010.
This is a significant achievement for Phoenix as it has reached its strategic goals set out in the IPO and has grown the gold resources at its Western Australian projects by 182% since their initial acquisition.
Today's news follows on from another major milestone reached by Phoenix on November 8 when the company poured the first gold bar from its Catherwood mine stock through an ore agreement. With 19,000 gold ounces in above ground ore stockpiles, the company is eyeing more gold bars in the near future.
The recent resource increase includes maiden Resources at Rayjax and Magdala, increases to Castle Hill from recent drilling and acquisitions within the Broads Dam area during the year.
Jon Price, Phoenix's managing director, said "this result is an important milestone for Phoenix, not just because we have shown an ability to deliver on our promises, but because we have clearly demonstrated the upside potential of the project area and confirmed the strategy to grow the Resources further to build the platform for a significant mining project pipeline."
Significantly, Phoenix is now in a strong position to generate early cash flow from treatment of stockpiles and self-fund development of a number of mines commencing with Catherwood in early 2012.
The cash flow will enable the company to continue its targeted greenfields and brownfields exploration programs while keeping dilution for Phoenix shareholders to a minimum.
Phoenix holds an extensive land holding on the Zuleika and Kunanalling shear zones northwest of Kalgoorlie in Western Australia after completing three strategic acquisitions. This area is home to some of Australia's richest gold deposits.
During the September quarter the company announced the completion of a Feasibility Study for the Catherwood gold mine, part of the Kunanalling Project area.
The study showed Catherwood can deliver $15.65 million in free cash flow, from the treatment of 314,000 tonnes of ore at 2.7g/t gold for 27,000 ounces mined for 25,300 ounces recovered, generating a total cash cost of $881 per recovered ounce including all royalties, capital and operating costs.
This equates to a margin of $619 per ounce or a return on investment of 70%.
The company expects further Resource growth from results of a 70,000 metre drilling program at Broads Dam, Castle Hill and Ora Banda which commenced in September and is on track.
Phase 1 of the program comprises 32,000 metres in the 2012 financial year through a combination of reverse circulation for resource growth and rotary air blast for target generation in greenfields areas.
Drill results from Castle Hill are expected in December with a further Resource update based on all recent drilling anticipated in the March quarter.
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