Sydney, Nov 22, 2005 AEST (ABN Newswire) - Directors of Korab Resources Limited (ASX: KOR) advise that Korab has successfully completed 37-hole (2100-metre) definition drilling program at its Bungarra deposit which forms part of Melrose project in Western Australia.
The program commenced on 1 November 2005 with a traverse of 4 vertical reverse circulation (RC) holes designed to close-off the Bungarra deposit from the north. These holes, numbered 501 to 504, have been drilled to a depth of 70 metres. Two of the holes (numbered 503 and 504) have intersected, what appears to be, an extension of the Bungarra deposit.
Bungarra contains a JORC compliant resource of 1.66 mln tones grading 1.64 g/t gold for a total of 87,000 ounces. Hole 503 intercepts include two metres at 1.96 g/t from 23 metres, one metre at 6.57 g/t from 29 metres, two metres at 11.2 g/t from 39 metres and one metre at 7.4 g/t from 67 metres. Hole 504 intersected one metre at 12.9 g/t from 29 metres.
"This is quite unexpected but positive outcome" commented Andrej K. Karpinski, Executive Chairman of Korab. "Where we thought we had a barren rock, we have hit gold mineralisation. Obviously it is too early to quantify its size, but the find confirms that the area around Bungarra is heavily mineralised and that there are excellent prospects for more gold to be discovered." Mr. Karpinski added.
Following the completion of the initial four holes aimed at closing-off the deposit, Korab continued the program with 22 RC and 5 air core holes drilled at Bungarra. After the conclusion of the Bungarra program on 13 November, the rig was moved to Hurley's prospect, approximately 300 metres north of Bungarra to drill additional 6 RC holes. Korab has received assay results from the first 12 holes and assays which graded higher than 1.5 g/t are listed in the table:
HOLE TARGET NORTH EAST DEPTH(M) GRADE(G/T)503 to close-off Bungarra from north 19750 11920 23 1.99 19750 11920 24 1.92 19750 11920 29 6.57 19750 11920 39 17.90 19750 11920 40 4.45 19750 11920 67 7.40 19750 11920 68 1.54504 to close-off Bungarra from north 19750 11960 1 1.58 19750 11960 29 12.90505 to close-off Bungarra from north 19725 11895 28 2.04511 infill/definition 19700 11925 38 4.67 19700 11925 48 2.67 19700 11925 59 1.55 19700 11925 60 1.93512 infill/definition 19700 11975 12 5.90 19700 11975 34 1.62
UltraTrace Laboratories in Perth are currently processing drill samples from the remaining 25 holes and the release of further assay results is imminent.
DRILLING PROGRAM OBJECTIVES
The drilling program at Bungarra was designed to:
1. close-off Bungarra deposit from the north and south,
2. provide additional data for definition of a higher grade supergene section of the Bungarra deposit suitable for processing at the nearby Bronzewing plant,
3. enable design and optimisation of the open cut pit,
4. provide samples for metallurgical testing aimed at assessing suitability of the lower grade ore for onsite leaching ECONOMICS OF BUNGARRA DEPOSIT Korab intends to develop the Bungarra deposit by processing the ore at a nearby Bronzewing plant owned by View Resources.
Korab announced on 31 August this year that it has reached an in principle agreement with View to use the plant to process the ore from Bungarra and from other deposits within the Melrose project. "This new gold mineralisation intersected to the north of Bungarra enhances the prospectivity of the area and makes development of the other deposits within Melrose project more likely." - said Mr. Karpinski.
Recent increase in the gold price and the simultaneous decline of the Australian dollar means that the economics of Bungarra have substantially improved. During the review of development options for Melrose which was conducted earlier this year, Korab used a gold price of AU$520 an ounce to assess the viability of Bungarra development. Recently, gold has been trading above AU$620 an ounce, rising as high as AU$670 an ounce. "An additional revenue of AU$100 an ounce over and above what we budgeted for makes this development proposition even more attractive" - noted Mr. Karpinski.
KORAB CORPORATE DATA
Shares on issue: 45 mln
Options on issue: none
Listed: 31 August 2005
Trading code: KOR
Key Projects (project name/commodity/location):
Melrose, commodity: Gold, location: WA;
Batchelor, commodities: Uranium, Gold, Magnesium, Zinc, location: NT;
Throssell, commodities: Gold, Uranium, Copper, location WA;
Maitland, commodities: Uranium, Gold, location: WA;
Mt. Elephant, commodities: Gold, Copper, Uranium, location:
WA Darlot East, commodities: Gold, location: WA
PROJECT SETTING
The Melrose Project is located 400km north of Kalgoorlie and 170km north of Leonora and comprises tenements covering 280 square kilometres. Gold mineralization is hosted by Archaean volcanic rocks including a strong felsic component of Wanganoo/Mt Fisher Greenstone Belt This zone is separated from the Yandal Belt (which hosts the large 3.6 million ounce Bronzewing Gold Mine) to the west by a 30 to 40km wide body of Archaean granite. The 2.4 million-ounce Darlot/Centenary Gold Mine is located approximately 70km to the southeast
The project area contains significant gold mineralization in an area that has not yet received the exploration attention of other areas that are closer to established infrastructure. Nevertheless, gold resources of 306,000 ounces have been delineated in three deposits in close proximity to each other.
- The Boundary Deposit contains 4.61 million tonnes at 1.37g/t gold (202,000 ounces)
- The Bungarra Deposit has an estimated 1.66 million tonnes at 1.64g/t gold (87,000 ounces)
- The Stirling deposit contains 0.4 million tonnes at 1.31g/t gold (17,000 ounces).
The current combined resource for the Melrose Project is 6.67 million tonnes at 1.43g/t gold containing 306,000 ounces. The three known gold resources at Melrose are all located within 5km of each other along the Wanganoo antiform fold axis. They lie within the fold core, bounded by prominent BIF ridges that close just north of the Boundary deposit. The antiform plunges to the north-northeast at approximately 40-45 degrees. Rock types within the fold core are dominantly felsic to intermediate meta-volcanics and volcanoclastics. Mafic-ultramafic sills intrude the volcanic pile at all three areas, but these do not appear mineralized. Late stage granodiorite intrusions along the fold axis are common to each deposit and these appear to be a locally favourable host to mineralization.
Much of the Bungarra resource has been interpreted to be within two shallowly dipping supergene bodies over an area of 400m by 180m. It is located approximately 4.6km south east of Boundary on the fold axis). Rock types are similar to Boundary, but at least two separate pyrite rich granodiorite intrusions are recognised; a grey granodiorite and a melanocratic granite. The weathering profile at Bungarra averages between 50m and 60m depth. However, supergene gold horizons within the saprolite are well developed and preserved. Primary mineralization has been intersected in a few deeper RC and diamond holes, but portions of the oxide mineralization are potentially more steeply dipping and reflect primary orientations, rather than supergene processes. Where recorded, quartz-pyrite veins are steeply dipping to the west with individual metre grades of up to 86 g/t gold. They appear to be aligned north-northwest, but this is not conclusive from the drilling to date.
A significant primary gold ore body may exist at Bungarra or beneath adjacent areas of cover but this is yet to be confirmed. Melrose is located in within the Archaean Yilgarn Craton. The project is part of the Wanganoo greenstone belt, a narrow 5-12km wide, northwest trending greenstone terrain that extends from Banjiwarn Station in the south to the Gunbarrel Highway in the north. Melrose lies in the southern portion of the belt and is bounded to the east by the North Banja Batholith and to the west by the Mt Blackburn Batholith. The greenstone stratigraphy is folded about a broad anticlinal axis that passes through the centre of the Melrose tenements striking north northwest and which contains the main gold prospects. Metamorphic grade varies from amphibolite facies along the margins of the belt to Upper Greenschist facies toward the centre.
About Korab Resources Limited
Korab Resources Ltd (ASX:KOR) is an international mining and exploration company with operations in Australia and Europe. Korab's projects include Winchester magnesium carbonate deposit and Geolsec phosphate rock deposit at Batchelor in the Northern Territory of Australia as well as a gold and silver deposit at Bobrikovo in eastern Ukraine. The Company also explores for gold and copper at Ashburton Downs in Western Australia and for various metals and specialty minerals at Batchelor in the Northern Territory. Korab's shares are traded on Australian Securities Exchange (ASX) and on the Berlin Stock Exchange (Berliner Börse) through Equiduct electronic trading platform. More information about Korab's projects can be sourced from Korab's website at www.korab.com.au.
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