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Jun 2011 - Phoenix Gold Ltd

Phoenix Gold Limited (PXG) – Increasing Resources to at least 1.5moz

  • Despite only listing with in December 2010, with ore resources of 0.98moz, Phoenix Gold has already extended them to 1.39moz in less than 6 months, and should easily attain its IPO target of 1.4moz to 1.5moz by the end of 2011.
  • At its IPO, Phoenix Gold had most of its tenements along the two Eastern Goldfields (of WA) structures known as the Kunanalling Shear and the Ora Banda/Grants Patch structure. However, it quickly moved to establish a position on the Zuleika shear through acquiring Broads Dam and filling in the tenement gaps of the old Broads Dam and Blue Funnel mines, to result in projects on 3 adjacent shear zones/structures.
  • PXG's current planned strategy is to derive cashflow from small mining projects (SMPs) initially using them to increase resources in the individual project areas. Such as using open-cuts to expose geological information that can be applied to take the orebodies to the next stage of open-cut and/or underground gold production. The treatment of stockpiles also exposes ground for exploration. At this stage ore treatment is based on toll-treatment or JV purchase agreements through nearby plants with spare capacity.
  • On the Kunanalling Shear, the main focus has been on the Castle Hill project, whose resources more than doubled in the 31 May 2011 announcement from 253koz to 526koz, (and are now focusing on strike and depth extensions, and adjacent structures). Carbine lies further NW at 139koz, while to the SE lies the Catherwood-Premier open-cuts, which with the Rayjax area comprises the namesake 209koz Kunanalling project.
  • On the Zuleika shear, PXG's Broads Dam and Blue Funnel mines form the 99koz Broads Dam project that lies sandwiched between the high-grade narrow-vein gold mines of Bullant to the NW and the Kundana district to the SE. As shown in this report, the Broads Dam resources should be viewed as "early stage" with the shallow open-cuts last mined over 20 years' ago, and little explored since then.
  • On the easternmost Ora Banda/Grants Patch structure there are currently 397koz in resources spread amongst Boundary and Nazzaris area NW of Ora Banda, and the 93koz reported on 19 May 2011 at the new Backflip discovery (1.5mt @ 2.5g/t) south of Grants Patch. There are numerous old workings in the region yet to be evaluated.
  • Written by: Keith Goode
  • Wednesday, 01 June 2011