AI assistant
IONDRIVE LIMITED Capital/Financing Update 2006
65132_rns_2006-10-25_0c20979d-017d-45a0-b937-4168d9a413f1.pdf
Capital/Financing Update
Open in viewerOpens in your device viewer
26th October 2006
CHALLENGER REGION GOLD JV WITH DOMINION
Southern Gold Limited (ASX Code SAU) is pleased to announce the execution of a Joint Venture (JV) to find the next "Challenger" with Dominion Mining Ltd on Dominion's Exploration Licences in the north-west Gawler Craton, South Australia. Challenger is currently one of Australia' most profitable gold mines, with mine production for the lune 2006 quarter was 25,912 ounces at a cash cost of \$329/oz. at a grade of 9.03g/t.
Southern Gold will be applying accurate drilling techniques and the updated structural model of the Challenger Mine to a number of previously identified high grade targets on the exploration licences around Challenger. Southern Gold's substantial drilling program will also be complimented by geophysical methods previously untried in the region, to discover another high grade, low cost gold mine like Challenger.
Challenger Regional Gold Targets
A number of shallow, high-grade gold intercepts were identified by Southern Gold from Dominion's drilling in the mid 1990's (Table 1, Figure 2). Southern Gold's detailed assessment of the Challenger structural model suggests these targets may be indicators of much larger mineralising systems than previously thought. Priority targets for follow-up drilling are listed in the following table:
| Prospect | Grade | Depth (m) |
Hole No. |
|---|---|---|---|
| Golf Bore | 52 g/t | 71-72 | 280 |
| Golf Bore | 26 g/t | 51-52 | 286 |
| Golf Bore | 11 g/t | 75-77 | 290 |
| Mainwood | $33.5$ g/t | 35-36 | 16 |
| Mainwood | 25 g/t | 31-32 | 107 |
| Typhoon | 37 g/t | 33-34 | 78 |
| Typhoon | 34 g/t | 48-49 | 121 |
| Typhoon | 33 g/t | 57-58 | 122 |
| Typhoon | 25 g/t | 47-48 | 42 |
| Monsoon | 23 g/t | 19-20 | 223 |
| Monsoon | 20 g/t | 45-46 | 234 |
| Monsoon | 9.7 g/t | 47-48 | 267 |
Table 1. High grade gold intercepts on the JV tenements
Southern Gold Limited ABN 30 107 424 519
58 North Terrace Kent Town South Australia 5067 South Australia 5071
PO Box 750 Kent Town
email: [email protected] telephone 08 8132 0044 www:southerngold.com.au
facsimilie 08 8132 0199
These shallow, exploration stage drill results from these prospects are geologically similar to the deep drill intersections of the MI ore zone at Challenger recently released by Dominion. The MI ore zone forms the maiority of the Mining Reserves at Challenger.
Southern Gold believes that Dominion's high grade gold intersections at a number of it's regional prospects have similar structural controls to the Challenger ore zones and have the potential to develop in size beyond the previously interpreted narrow and discontinuous intersections.
An initial assessment of the Dominions drill data by Southern Gold has already identified the thickening of the gold bearing 'envelopes' which suggest the development of high grade plunging gold 'pipes' at Golf Bore (Figure 1).
Southern Gold Limited PO Box 750 email: [email protected] telephone 08 8132 0044 58 North Terrace ABN 30 107 424 519 Kent Town Kent Town www.southerngold.com.au facsimilie 08 8132 0199 South Australia 5067 South Australia 5071
RELEASE code SAU
Summary of Joint Venture Terms
Southern Gold has committed to \$500,000 of expenditure in the next 12 months. On the completion of \$1m expenditure within 24 months, Southern Gold receives a 30% interest. Southern Gold loses any interest in the JV if it does not spend a total \$2 million on the JV by the end of year three.
After expenditure of \$2m total within 3 years, Southern Gold will earn a 51% interest.
If Dominion does not participate at 49%, Southern Gold can earn 80% by the expenditure of a further \$2m in the following 3 years.
The Joint Venture relates only to gold and is subject to the terms and equity in Dominion's other joint venture tenements.
| EL | Holder |
|---|---|
| 2778 | Dominion |
| 2808 | Dominion |
| 3270 | Dominion (excluding adjacent to mine) |
| 3044 | Dominion |
| 3435 | Dominion |
| 2884 | Dominion (90%) / Coombedown (10%) |
| 3262 | Dominion (90%) / Coombedown (10%) |
Tenements (refer Figure 2)
For Further information please contact:
Mr Stephen Biggins Managing Director Phone: +61 (0) 8 8132 0044 Fax: +61 (0) 8 8132 0199
Please visit our updated website at www.southerngold.com.au
The information in this rebort has been compiled by Stephen Biggins (BSc(Hons)Geol, MBA) as a full-time employee of Southern Gold and who is a member of the Australasian Institute of Mining and Metallurgy and is bound by and follows the Institute's codes and recommended practices. As a Competent Person, he has a minimum of 5 years relevant experience in the style of mineralisation and types of activities being reported and has given written consent to the above report in the form and context in which it appears.
Southern Gold Limited ABN 30 107 424 519
58 North Terrace Kent Town South Australia 5067 PO Box 750 Kent Town South Australia 5071 email: [email protected] telephone 08 8132 0044 www:southerngold.com.au
facsimilie 08 8132 0199
RELEASE
code SAU
Southern Gold Limited ABN 30 107 424 519
58 North Terrace Kent Town South Australia 5067
PO Box 750 Kent Town South Australia 5071 email: [email protected] telephone 08 8132 0044 www:southerngold.com.au
facsimilie 08 8132 0199