Vancouver — Recent drilling by New Guinea Gold (NGG-V, NGUGF-O) at its Sinivit project in East New Britain province, Papua New Guinea, cut a number of shallow, high-grade gold intervals giving the aspiring precious metals producer a market lift.
A 59-hole reverse-circulation grade control drill program was conducted on the stripped Southern oxide pit area, being prepared for mining, along 6-metre-spaced section lines over about 100 metres of strike.
Drill results include 18 metres of 22.6 grams gold per tonne including a 2-metre interval of 60.6 grams gold in hole SGC 0029.
“These results are quite exciting and much higher than earlier resource definition drilling,” said company CEO Bob McNeil in a release. “New results represent the best drill results encountered at Sinivit and all are near surface. There appears to be several times the amount of gold present in the new holes than in the original resource drill holes.”
New Guinea Gold expects to begin gold production from Sinivit by late April. It will mine the oxide cap of the quartz telluride copper-gold system that hosts an indicated resource of 713,000 tonnes grading 5.7 grams gold plus 340,000 inferred tonnes at 3.2 grams gold.
The company is implementing a vat leach circuit at the operation and expects gold production to ramp up to the 35,000-oz.-per-year level. Initial cash costs are estimated at around US$120 per oz.
“The high-grade oxide gold mineralization confirmed by the drilling will be accessed during the startup of open-pit mining at the southern oxide zone, allowing early treatment of high-grade gold mineralization,” McNeil continued.
Although production will be limited from the small deposit, New Guinea Gold looks to define additional resources during operation, noting that mineralization is open at depth.
The company has all permits in place. Support for mining in the area is reported as good, which means the junior may be able to avoid the pitfalls other companies have faced in the country.
New Guinea Gold has a 92% interest in Sinivit and holds interests in a number of other projects throughout Papua New Guinea.
In late 2006, New Guinea Gold and Vangold Resources (VAN-V, VNGRF-O) tabled plans to reorganize the joint holdings of a number of their Papua New Guinea mineral projects into two new separate public companies, a move the companies said would allow shareholders to better realize the value of the “non-core” assets. New Guinea Gold will retain its Sinivit, Imwauna-Normanby and Weioko-Sehulea projects.
Following the Sinivit high-grade drill results, shares of New Guinea Gold gained 17%, closing up 8 at 56 apiece on very strong volume. The company has a 52-week trading range of 28-65.
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