KGL Resources is in the money with sale of Andash project
KGL Resources (ASX: KGL), formerly Kentor Gold, is all set to start drilling to increase Resources at its Jervois Copper-Silver-Gold Project in Northern Territory after receiving the balance of funds from the sale of its Andash project in Kyrgyzstan.
The company now has a cash balance of about $14.3 million and will now transfer $3 million to satisfy the Deed of Company Arrangement for the Murchison Gold Project.
KGL had sold Andash to Robust Resources (ASX: ROL) for $15 million.
“Backed by a strong cash position, KGL has in Jervois a high quality project on which it can now continue to focus an active exploration program and pre-feasibility study,” managing director Simon Milroy said.
The 20,000 metre diamond and reverse circulation program at Jervois is expected to commence on 1 September 2013.
The Jervois Copper-Silver-Gold Project in the Northern Territory on the Plenty Highway about 250 kilometres from Alice Springs to Darwin railway has a current Indicated and Inferred Resources of 13.5 million tonnes at 1.3% copper and 25.8 grams per tonne copper, or 170,415 tonnes copper and 11.6 million ounces silver.
It also hosts 69,000 ounces of gold, 26,000 tonnes of lead and 22,000 tonnes of zinc.
Jervois contains strata-bound copper gold deposits hosted in siltstones and sandstones of the Bonya Schist, which is part of the Palaeo-proterozoic Eastern Arunta Province.
It has a prospective strike length of about 12 kilometres and has been variously described as VMS, IOCG or Skarn.
The drilling consists of step out drilling around the known ore bodies to increase the resource and a separate exploration program designed to test new targets around the exploration lease.
Reprocessed historical Induced Polarisation (IP) data shows chargeability anomalies that correlate well with the known resources at both the Marshall and Reward deposits.
The results show a continuation of the chargeability anomaly to the south of Marshall and a second, large chargeability anomaly to the east of the Reward lode.
Both areas will be tested in the drilling program.
With its cash balance of $14.3 million, less the $3 million to satisfy the Deed of Company Arrangement for the Murchison Gold Project or about $11.3 million, and its shares trading at just $0.07 with a $10 million market capitalisation, KGL is woefully undervalued, providing an opportunity for investors
This assigns no value to the Jervois project, paving the way for any success from the upcoming 20,000 metre drilling program to fuel increases in its share price.
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