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Jun 2012 - Phoenix Gold Ltd

Phoenix Gold Limited (PXG) – Targeting Resources of ~2.5moz by DQ 2012, while Self-funding its Exploration

  • Phoenix Gold (PXG) achieved its IPO target of ~1.5moz by the end of 2011, and is now focused on its next target of 2.5moz. PXG has a package of tenements in the Eastern Goldfields of WA (west of Kalgoorlie), spread across 3 major shear zones or structures of the Kunanalling & Zuleika shears, and Grants Patch structure. Most of the activity and resource increases have been at its Castle Hill Project on the Kunanalling Shear.
  • PXG has a pipeline of small mining projects (SMPs) that it is endeavouring to turn to account, after completing scoping or PFS studies on them, such as Catherwood, Blue Funnel, Nazarris and Boundary. Of these, the Catherwood pit on the Kunanalling Shear appears to be the most advanced, having completed its PFS and most of the required approvals ahead of mining the deposit, and then treating it at one of the nearby plants.
  • The Phase 1 pit plan for Catherwood focuses on the lesser known eastern contact boundary, which contains a number of historical workings, but it appears to have often been overlooked in favour of the western contact structure. Using pits to expose the geology and take them to the next level (with possibly a further cut-back) is one of PXG's methods of self-funding exploration / evaluation of a project's potential.
  • In late May 2012, Phoenix reported the results of a mining study on Blue Funnel, showing that at a gold price of A$1600/oz and a total cash cost of ~A$1090/oz, free cashflow of ~A$8.9m could be realised from the treatment of ~150,000t @ 3.5g/t for ~16,000oz recovered. There were also some very encouraging intersections below the pit floor such as 4m @ 13.4g/t and 23m @ 7.6g/t
  • With Castle Hill's resource continuing to increase and the recent addition of the Kintore tonalite project, the next stage appears to move to a PFS that considers PXG having its own ~2mtpa plant in that vicinity (due to the potentially significant ~1g/t tonnage in the tonalite, with some higher grade poddy areas). Included in Castle Hill is the newly determined linking Telegraph structure that connects with the Red Dam acquisition.
  • On the easternmost Ora Banda/Grants Patch structure, the focus has continued to be on Boundary, Nazzaris and Backflip. Although the original (Great) Ora Banda remains a drill-ready target, the initial focus is expected to be on the results from PXG's planned palaeochannel survey of the region.
  • Written by: Keith Goode
  • Friday, 08 June 2012

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