LATEST DRILL RESULTS REVEALS MINERALISATION OPEN AT STRIKE AND DEPTH AT KATANNING GOLD DEPOSIT
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1 ASX ANNOUNCEMENT 8 March 2011 LATEST DRILL RESULTS REVEALS MINERALISATION OPEN AT STRIKE AND DEPTH AT KATANNING GOLD DEPOSIT New true-width intercepts along strike from Katanning Deposit include: o g/t Au from 116m o 6.40 g/t Au from 118m Drilling confirms depth continuation of mineralisation o 3.45 g/t Au from 68m mineralisation continues to remain open along strike and at depth Drill testing commenced of targets along strike of Jinkas ore body Two additional RC drill rigs secured to expedite resource drill-out Ausgold Limited ( Ausgold or the Company ) (ASX: AUC) is pleased to announce that the latest results of reverse circulation ( RC ) drilling at the Katanning Deposit continue to intersect significant gold mineralisation along strike of the current resource at the Jinkas ore body (Figure 1). The Katanning Project ( Katanning ) has a defined JORC compliant resource of 241,800 oz Au, covering five ore bodies. The Company is currently undertaking a 27,000 metre drill program to delineate additional gold resources along strike of the known deposits. The latest RC results indicate that the Katanning gold mineralisation extends beyond the 850 metres of strike previously reported by the Company, with the ore body continuing to remain open along strike. Assay results from Ausgold s first RC hole, targeting primary gold mineralisation beneath the historic oxide open pit recently intersected 3.45 g/t Au from 68 metres (Figure 1). This result indicates that the Jinkas ore body continues at depth and the Company has commenced a systematic drill-out of the depth extension of this resource. Further drilling is currently being planned by Ausgold with two additional RC drill rigs arriving on site in the coming weeks to expedite the resource drill out of this deposit. This drilling will be conducted on a 20 metre by 20 metre grid to support the Company s upcoming revised JORC Resource estimation and initial pit optimisation. Ausgold Limited (ACN ) Level 14, 191 St George s Terrace Perth Western Australia 6000 T: F: info@ausgoldlimited.com
2 The Katanning Deposit, located only 275 kilometres southeast of Perth, is an intrusion-related gold deposit demonstrating mineralogy and ore genesis similar to Newmont s 26 million ounce Boddington Mine. Recognising a potential repetition of the world-class Boddington Mine, Ausgold commenced drill testing the primary gold mineralisation of Katanning in September The potential of the Company s Katanning deposit is illustrated via contour plot of the drill results returned to date as expressed in gram-metres. Gram-metres are calculated by multiplying the grade of the gold mineralisation intersected by a drill hole by the thickness of the mineralised intersection. The gram-metre plot (Figure 2) highlights a coherent >50 gram-metre zone that corresponds to Ausgold s initial drilling program. The latest program was designed in anticipation that mineralisation would be located more north northwest, however the latest results indicate that the ore body straightens to be more northerly, therefore to date, only the eastern most holes have hit mineralisation. Ausgold CEO, Ben Bell stated, The majority of the historic drilling at Katanning was terminated before intersecting the primary gold mineralisation within the fresh bedrock, therefore the historic resource is largely limited to the oxide mineralisation within the first 30 metres below the ground surface. As we were encouraged by the high grade gold intersections returned from the limited historic drilling that penetrated this fresh bedrock, our initial focus has been to test the strike extent of the ore body beyond the historic oxide open pit. This latest round of drilling clearly defines that the higher grade primary gold mineralisation beneath the oxide resource does indeed remain open both along strike and at depth. We remain confident that as we continue our ongoing drilling program at Katanning, results will continue to extend known mineralisation and in turn, significantly increase our JORC resource. With our shallow drilling to date predominantly limited to <100m vertical, significant upside to further increase our resource remains at Katanning both from this current drill program, as well as future programs where we will look to extend the depth of our drilling, particularly given the significant result of hole BSRC0061 which was the first hole drilled to test the depth continuation of the Jinkas ore body and it hit 3.45g/t Au. Upcoming Assay Results accelerate the release of upcoming results from the ongoing field program, Ausgold has mandated three separate Perth based laboratories to carry out assay testwork. The Company expects this will reduce delays in obtaining results, something which has been problematic due to the current high demand on assay services.
3 In the field, the Company is now routinely using a portable XRF analyser to identify potential ore zones immediately as they are drilled. Ausgold has identified that at Katanning, a strong correlation appears to exist between gold grades and tungsten. The XRF analyser detects tungsten extremely well and by extension, provides Ausgold with an impression of the width of gold intersections. The Company is now prioritising the assaying of samples that have elevated tungsten values (over those samples that do not demonstrate the presence of tungsten) to also address the turnaround time from the labs. Appointment of Chief Resource Geologist The Company is also pleased to announce the recent appointment of Chief Resource Geologist Mona Sulaiman- Gale effective from 1st March. Mona has over 15 years experience as a resource and exploration geologist with companies including Intrepid Mines and Perilya Limited. At Ausgold, Mona will be responsible for managing the resource drill-out of Katanning and for delineating additional ore bodies that may be present along the 15 kilometre long granite intrusion which hosts the Company s current gold resource. This includes priority targets Datatine and Fraser located along strike of Jinkas. Historic drilling at Datatine, eight kilometres north of Jinkas, previously intersected 15.6 g/t Au. Similarly, previous drilling at Fraser returned 2.1 g/t Au only one kilometre south of the current Jinkas resource. Neither of these drill results were followed up by previous holders of Ausgold s mining leases. ***ENDS*** For further information, shareholders and media please contact: Benjamin Bell Victoria Thomas Chief Executive Officer Six Degrees Investor Communication Ph: (08) Ph: (03) bbell@ausgoldlimited.com victoria@sixdegreesmedia.com.au The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Benjamin Bell, who is a Member of the Australian Institute of Geoscientists. Mr Bell is the Chief Executive Officer and a full-time employee of Ausgold Limited, and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
4 About Ausgold Limited Ausgold Limited (ASX: AUC) listed in 2009 with the aim of utilising the best expertise and innovation in geoscience to target and discover new gold and copper ore bodies in underexplored mineral provinces in Australia. Ausgold s Boddington South Project is located southwest of Perth and covers an area in excess of 5,500 square kilometres over the Southwest Terrain of the Yilgarn Craton. Within this project lies Ausgold s Katanning Project, which the Company has acquired an 80% interest. The Katanning Deposit includes three mining leases and two exploration licences covering almost 400 square kilometres adjacent to Ausgold s 100%-owned Boddington South tenements. Independent consultants at Ravensgate have previously calculated a JORC-compliant resource of 241,800 oz Au for the Company s Katanning Deposit. A major drilling campaign is currently underway to drill out the depth and strike extensions of Katanning Deposit, test a 25 kilometre strike of gold mineralisation within the regional Boddington South Project and begin exploration of the 100 kilometres of greenstones that have been identified in the Company s tenement package.
5 Figure 1: Collar locations and significant gold intercepts of Ausgold s resource development drilling of the Jinkas ore body
6 Figure 2: Contour map of gold intersections as expressed in gram-metres. Coordinate system is local mine grid where grid north is 333 o magnetic. Historic oxide open pit is indicated by the gold mineralisation located between 18000N and 18600N
7 Table 1: Summary of significant reverse circulation (RC) drill intercepts at Ausgold s Katanning Deposit Hole BSCR BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC
8 Hole BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC
9 Hole BSRC BSRC BSRC BSRC BSRC BSRC >40 gram metre intersections are highlighted Co-ordinates are in MGA Zone 50 GDA94. All holes are drilled on an azimuth of 243 and dip at -60 degrees. Intercepts calculated using a 0.5 g/t Au Cu lower cut, no upper cut, and a maximum 2 metre internal dilution All assays determined by 1 metre split samples using fire assay by Ultra Trace Laboratories and Quantum Analytical Services in Perth Gram metres are calculated by multiplying the interval (in metres) by the gold grade (in grams per tonne)
10 Ausgold s Previously Reported Assay Results 1 Hole BSRC end of hole BSRC BSRC BSRC Including & BSRC BSRC BSRC Including Hole
11 BSRC BSRC BSRC BSRC No sig. assays BSRC BSRC BSRC BSRC Including BSRC BSRC BSRC Hole
12 BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC Hole
13 BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC BSRC >40 gram metre intersections are highlighted 1 Ausgold Limited, ASX Announcements dated 26 November 2010, 22 December 2010 and 13 January 2011
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