KGL Resources hits heights with high grade massive sulphides at Jervois
KGL Resources' (ASX: KGL)
shares are set to open higher after delivering some impressive widths
and grades from resource extension drilling at the Jervois project in
the Northern Territory, with the latest results further boosting the
case for a significant resource upgrade.
The latest highlight
from the Marshall-Reward deposit is an 18 metre wide zone of massive and
semi-massive sulphide containing visible copper, lead and zinc sulphide
mineralisation.
The intersection breaks down to: 18 metres at
0.88% copper, 15.66% lead, 3.77% zinc, 726.1g/t silver, 0.61g/t gold
from 287 metres (diamond tail KJCD048), including 9 metres at 1.48%
copper, 17.67% lead, 3.07% zinc, 739g/t silver, 0.53g/t gold.
The intersection has a copper equivalent of 18 metres at 10.3% copper.
Metallurgical test work to date has demonstrated that a 93% recovery
of copper to a 26% copper concentrate is achievable though in the
calculation of copper equivalent 100% of the contained copper is used.
Importantly
the hole supports the continuation of the resource at depth, and
therefore has the potential to add to the overall resources.
Simon
Milroy, managing director, spoke exclusively to Proactive Investors
today, commenting: "We were expecting to intersect copper, and we hit
high-grade copper, with the high-grade lead and silver a bonus."
The
results further increase the prospectivity of Jervois, as they are from
a previously untested zone around 70 metres below the existing Inferred
Resource.
Drilling along strike both north and south of this location is planned to be completed before the end of December.
Diamond tails; three rigs operating
Drilling
of diamond tails at the Marshall-Reward and Bellbird deposits at
Jervois is well underway with three rigs now operating.
The two
diamond rigs are operating around the clock to ensure as much drilling
as possible is completed before the end of December.
Lead assays are cut to 20%; assays pending
Lead assays are cut to 20%, with the final results for these over limit lead assays currently pending.
Analysis
This
is a corker of an intercept from KGL. The importance of the latest
drilling results from Jervois is that the broad zones of copper
mineralisation will build on the previous broad intersections of +1%
copper, which will extend and increase the current resource base.
Today's
resource extension drilling results will lift the value of the deposit.
The intersection of 18 metres at 10.3% Copper Equivalent further
supports a significant resource increase.
Key catalysts in the
near-term include: further drilling results from the ongoing program at
depth and along strike, which are due in around a month; a resource
upgrade and the completion of a Pre-Feasibility Study in the first half
of 2014.
Based on a closing share price yesterday of $0.076, KGL Resources has a market cap. of under $11 million. With over $10 million in cash
at the end of September 2013, the company's enterprise value is not much
more than a million dollars.
Proactive Investors maintains a share price target of $0.13 to $0.15 for KGL Resources in the next 6 to 9 months.
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