Vector Resources Limited (ASX:VEC) Gwendolyn In-situ Gold Resource Increased by 139%

Perth, Oct 17, 2011 AEST (ABN Newswire) - Western Australian focussed resources company Vector Resources Limited (ASX:VEC) ("Vector" or "the Company") is pleased to announce a significant resource up-grade at the Gwendolyn Project in Western Australia on tenement P77/3976.

Data received to date from this year's drilling programs were given to SRK Consulting (SRK) for validation, modelling and analysis.

The resource modelling work has resulted in an outstanding increase to the project's resource.

The historical resource at Gwendolyn was 317,700 tonnes for 33,300 ounces of gold. This new resource upgrade brings the project to 988,700 tonnes for 79,700 ounces of gold, a 139% increase. The resource upgrade consists only of the oxidised zone, from surface to approximately 89 metres in depth. At this stage there is insufficient drill density to include the below oxidisation or fresh rock intercepts in the resource.

SRK also completed resource modelling for the previously treated tails located within the historical pit. The results of this work, increases the indicated resource by 238,000 tonnes for 5,600 ounces.

SKR also reviewed the unclassified material identified between the two inferred resources which represents an area similar in size to the Inferred material. An estimation has been undertaken on the unclassified material resulting in an 'Exploration Target' of between 688,000 t at 2.4 g/t and 1,270,000 t at 2.8 g/t for between 53,000 - 114,000 ounces of contained gold (see page 7 of the attached SRK Resources Project Memo for a detailed explanation).

This year Vector has completed 53 reverse circulation (RC) holes for 5,848 metres of the two programs that total 77 holes for 8,080 metres. With the completion of the remaining holes in the Program of Works (PoW) a total strike length of approximately 950 metres will be tested.

The approximate length of the new northern resource is approximately 340 metres and the southern deposit approximately 100 metres.

Only 6.4% approximately of the tenement has been explored with 93.6% remaining to be explored. From the 40 holes assayed to date, 30 holes hit intercepts of mineralisation giving the drill programs for the project a success ratio of 75% for every hole drilled to date.

Managing Director Glyn Povey said, "The Vector Board and management team were extremely proud of the hard work committed by everyone involved over the past six months on this project and the results of the resource upgrade are inspiring with substantial potential for upside remaining".

The In Situ Resource

SRK was engaged by Vector to carry out validation, resource modelling and analysis of both historical data and new data from current drilling. The in situ Mineral Resource was estimated within a constraining wireframe based on a low cut-off grade envelope of 0.2 g/t. The envelope was generated using Leapfrog(TM) software. The estimation is by Ordinary Kriging, with a top cut of 15g/t applied to the composited data. This work concentrated on the oxide domain starting from the surface to an approximate depth of 89 metres. Currently the drill density below the base of oxidisation is insufficient to meet JORC requirements for resource estimates. Further drilling will address this issue.

From the resource model the indications are that Gwendolyn has high quality ounces within the deposit. By applying a "lower cut-off grade" of 1 g/t Au the resources ounces are only reduced by 500 ounces. The diagrams below represent the new resource and 3 dimensional cross section view.

Pit Tails Resource

The Gwendolyn pit is half filled with tailings. The tailings have been estimated within a wireframe outlining the tailings volume, controlled by the aircore drilling results. The estimation is by Inverse Distance (power 2). The base of the tailings has been derived from the Aircore logs drilled in 2009. The surface elevation of the waste dump has been created from differential GPS measurements. Vector has combined these surfaces with newly acquired differential GPS data to create a new topographic surface. This was combined with the collar elevations from the Phase 1 drilling to create a final topography for resource estimates.

Unclassified Material

As reported by SRK there is a large amount of ground between the two JORC Compliant resource deposits to the north and south that is at this time considered an Exploration Target due to the current drill density. This Exploration Target with a range of 688,000 tonnes at 2.4g/t for 53,000 ounces to 1,270,000 tonnes at 2.8g/t for 114,000 ounces* of contained gold, requires additional drilling to make inferred category or better. From the Phase 1 and 2 drilling completed to-date there were significant high grade intercepts contained within this unclassified material. In particular:

- Hole G014: 10m @ 4.13g/t, including 2m @ 13.94g/t;
- Hole G016: 7m @ 22.88g/t, including 4m @ 36.9g/t which is inclusive of the 1m @ 111.6g/t,
- Hole G017: 5m @ 3.03g/t and 2m @ 12.0g/t; and
- Hole G019: 3m @ 3.38g/t and 3m @ 57.91g/t, including 1m @ 145 g/t and 1m @ 24.31 g/t.

SRK Consultants Sarah Monoury, Peter Williams and Daniel Guibal carried out the resource modelling. Attached is the SRK Report of the resource modelling work completed to date.

Significant Upside

Gwendolyn has significantly increased its resource with encouraging results from the partial completion of the Phase 2 drilling. Further increases are anticipated as results are received.

Other fundamentals are also encouraging and include:

- Additional mineralisation intercepts identified at depth outside the existing resource;
- Mineralisation continues to be discovered in all directions;
- Mineralisation intercepts found from surface to 122 metres;
- The remaining Phase 2 drilling will continue to test the along strike potential;
- Significant unclassified zone yet to be included in resource
- Geology boundaries and oxidisation zone have been identified; and
- Approximately 93.6% of tenement still requires exploration.

For the complete Vector Resources Limited announcement including figures and tables, please view:
http://media.abnnewswire.net/media/en/docs/ASX-VEC-561470.pdf

Contact

Vector Resources Limited P: +61-8-6188-7800 F: +61-8-9481-8772 Email: contact@vectorresources.com.au http://www.vectorresources.com.au