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First JV drilling identifies new gold near SA’s Challenger mine

  The first drilling program by Southern Gold under its JV with Dominion Mining has confirmed previous company drilling and extended the gold mineralisation at Typhoon and Monsoon near Challenger.Shallow aircore drilling intersected both broad and higher grade intervals of gold mineralization such as 12m at 2.2g/t and 3m at 8.1g/t. A number of holes ended in gold mineralization (5gt at 50-51m) and over a much larger area than indicated by prior drilling. This initial drilling success provides encouragement for a number of drilling programs Southern Gold has scheduled on the incompletely tested gold prospects in the highly prospective region of the million ounce Challenger Gold Mine. Southern Gold strongly believes there is potential for more million plus ounce ore bodies in the Archean geology that hosts Challenger in northern South Australia.The new results provide vectors to test for gold bearing shoots with similar dimensions and orientations to the ore shoots at Challenger.Followup drilling is planned to test the depth extensions to the revitalized Typhoon and Monsoon prospects and to undertake drilling of other prospects initially delineated by calcrete geochemistry and shallow drilling in the 1990’s before structural models were established for the Challenger region. 94 air core holes totalling 5,238m were drilled on the Monsoon and Typhoon Prospects during June. Drilling comprised 27 holes at Typhoon and 67 holes at Monsoon. The holes targeted interpreted tight folding that parallels the broad trends seen at the nearby million ounce Challenger gold mine and also extensions to high grade gold hits identified in previous drilling by JV partner Dominion Mining Ltd.Drilling at both prospects identified broad zones containing similar rocks and sulphides as at Challenger, reconfirmed gold mineralisation and extended the volume of known gold zones. Even though some Southern Gold drill holes were collared in the range of 5m to 30 m from previous drilling, these new holes are given high significance because these are on par with the dimensions of a Challenger style M1 shoot.Holes MN17, MN30 and MN31 finished in fresh rock whilst still assaying high gold levels. The gold at the end of these holes is believed by Southern Gold to represent portions of the primary gold mineralisation.Drilling delineated a broader gold ‘plume’ where gold has been remobilised from basement rock and concentrated higher up in the weathering profile. This presents a larger target enabling followup drilling directed toward primary gold targets in the basement. At Monsoon, near some previous gold drill intersections, drilling intersected a zone of gneiss similar to that seen in the Challenger Mine. This included coarse grained quartz rich gneiss showing abundant blue quartz, together with coarse to very coarse garnet, and lesser black biotite. Some of this zone includes trace to several percent sulphides (disseminated or as very fine vein infilling) identified as arsemopyrite and/or pyrrhotite. Apreliminary interpretation indicates the zone follows the same structural trend as that outlined by recent ground magnetics.At Typhoon, the gold distribution from both SAU and DOM drilling appears to be oriented along a northeast trending magnetic feature that extends the potential target.

28 Tuesday August 2007  11:21

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