Intrepid confirms gold zone extension at Paulsens mine

With the goal of extending the mine life of the Paulsen’s gold mine in Western Australia from two years to five, Intrepid Mines (IAU-T, IAU-A) has gotten off to a strong start during its first stage of drilling by outlining a new zone.

Five holes were drilled and assays for four of the holes have been received.

The best intercepts include 8.9 metres grading 9.2 grams gold per tonne, 2.5 metres grading 6.7 grams gold, 3.5 metres grading 14.9 grams gold and 3.3 metres grading 16.3 grams gold per tonne (all true width).

The new zone is 40 metres directly below the current decline access and the company says it can be incorporated into the existing mine design and infrastructure at a minimum cost.

Drilling was guided by a re-interpretation and extension of a significant fault exposed by development work in a separate area of the mine. It was assumed that several past drill intersections thought to be Upper zone mineralization were spatially inconsistent with the extension of the existing ore body, and may represent a faulted offset of mineralization.

Intrepid says this was confirmed with first set of drill results the assays were made in a zone of sulphide enriched quartz vein of similar dimensions to the existing Upper zone, where the majority of Paulsens’ current production comes from.

The mine produced 151,000 oz. gold in 2007 at a cash cost of US$357 per oz.

Based on the latest results, Intrepid will go ahead with a second stage of drilling that will further test the Upper zone extension for the next 200 metres down dip.

Intrepid also has plans to make Paulsens hedge-free and debt-free by the end of the year. The company has 41,000 oz. of gold hedged and A$11.5 million in debt.

Intrepid’s cash position was drastically improved with the recent merger with Emperor Mines, an Australian company that had sold off its existing gold assets leaving it with $64 million in cash once all debts and shareholder obligations had been taken care of.

Intrepid shares rose 2 in Toronto today to 23.5 each on a trading volume of 398,000 shares.