Chirano gold resources up 22%

Vancouver – New drilling at Red Back Mining’s (RBI-V) Chirano gold project in Ghana, West Africa, has resulted in an increase in the contained gold ounces to 1.84 million in the measured and indicated categories. The company’s 95%-owned Chirano gold mine is situated about 15 km south of AngloGold Ashanti’s (AU-N) multi-million oz. Bibiani gold mine.

Hellman & Schofield, geological consultants out of Australia, revised the measured and indicated resources upward to 28.82 million tonnes grading 2.0 grams gold per tonne, an increase of 22% from the previous estimate, in accordance with their JORC code.

There are another 509,000 oz. contained in the inferred resource category which is pegged at 7,942,000 tonnes grading 2.0 grams gold. These will be the focus of more infill drilling to raise to them to the measured and indicated resource categories.

Red Back Mining is a new TSX Venture Exchange-listed company formed through the merger between Canadian-based Champion Resources, and Aussie-based Red Back Mining, in November last year. The newly hatched company is part of the Vancouver-based Lundin Group. Red Back’s main focus is the development of the Chirano gold deposit.

The new estimate, based on 9,900 metres of recent reverse circulation and diamond drilling using a cut-off of 1 gram gold, focused on the 3-km main pit complex in order to convert inferred resources to the next level. The strength and continuity of the mineralization is supported by an 87% conversion rate of indicated to measured resources.

The drilling also discovered extensions and new zones of mineralization along strike and at depth. The gold mineralization remains open at depth within all of the proposed pit areas.

The company is planning to drill another 5,000 to 10,000 metres beginning next month to test areas outside and in between the proposed pits. This includes the Chirano Shear zone and the Bibiani Shear zone which remain largely unexplored on the company’s concession.

The company is also expecting to announce a revised ore reserve based on the increased resource inventory, soon. Open pit designing and mine scheduling are now underway in addition to other pre-production activities ahead of the mine development decision.