Kolar Gold Limited
South Kolar Gold Project - Drilling Update
Kolar Gold Limited ("KGL or the "Company"), the Indian focussed gold exploration and development company, announces that it has received promising assay results from the first diamond drilling programme on the Chigargunta Eastern Lodes in the South Kolar licence area (GP 13), India. The lodes targeted with this campaign were the northerly extensions of the Eastern Lodes that have previously been mined in the historic Chigargunta mine. These lodes, named the E2, E3 and E4 lodes, are hosted within the felsic volcanic unit of the Kolar Greenstone Belt known locally as the Champion Gneiss and are a major target of the exploration programme currently being carried out by KGL.
· KGL has now drilled 25 holes for a total of 3,545 metres of the current South Kolar drilling programme.
· These include 6 drill holes for 872 metres completed in Chigargunta Eastern Lodes targeting the E2, E3 and E4 lodes and reported here.
· Gold mineralisation is confirmed to be the northerly extensions of the Eastern Lodes mined in the historic Chigargunta mine.
· Mineralisation includes narrow, high grade intercepts within a broad low grade intersection in KCE 02 through the E4 lode.
· Selected results from the Eastern Lodes include:
o KCE 01 - 0.5m @ 4.90g/t from 41.55m & 1.0m @ 3.36g/t from 43.55m
o KCE 02 - 11.5m @ 1.21g/t from 82.84m incl. 1.5m @ 4.74g/t from 92.84m
o KCE 06 - 2.0m @ 3.04g/t from 14.3m and 3.0m @ 3.1g/t from 28.3m
The drilling programme reported here followed identification of significant chargeability anomalies from the IP survey completed earlier in conjunction with surface mapping (as announced on 7th November 2011). The 6 holes (totalling 872 metres) were independently verified by the Competent Person, Mr Andrew J Vigar of Mining Associates Ltd ("MA") and all work has been conducted under JORC guidelines.
The strike and position of the targeted lodes were found to correlate well with a significant chargeability anomaly on the eastern side of the north south trending felsic volcanics, one of three anomalies identified in our recent IP survey over the Chigargunta block. The western anomaly lies within the mafic units and corresponds to the position of the western lodes and the central anomaly has been found to correlate with the coaxial plane of an antiformal structure. The drilling also confirms that these anomalies extend to a depth greater than 90 metres below surface.
Table 1. Kolar South Project - Chigargunta Eastern Lodes Drill with Results (to date)
no significant mineralisation
* visible gold seen in drill core
From the limited drilling completed to date, promising mineralisation has been encountered in five of the six holes currently drilled. The drill holes are shown at
Drill hole KCE 01 intersected the zone occupied by the E2 and E3 lodes. KCE 02 confirmed a broad zone of mineralisation (18.5 metres) with typical characteristics of the eastern lodes exploited at the Chigargunta mine. KCE 03 confirmed minor mineralisation on the E4 lode. KCE 04 intersected both the E3 and E2 lodes with the samples for the E2 intersection still being processed. KCE 06 targeted the E4 lode and encountered 3 mineralised zones including a narrow intersection from 51.30 metres containing visible gold.
RC Drilling and trenching
KGL is also pleased to announce that it has commissioned a reverse circulation (RC) drill rig and has commenced drilling at the northern end of the Chigargunta block approximately 300m north of the Chigargunta NE deposit.
KGL initially plan to drill approximately 4,000m to test the surface and near surface expressions of the IP anomalies that have been identified at a number of locations in GP 13. This drilling programme will commence from the Chigargunta block and move northwards.
In order to better define the drill targets from the IP chargeability anomalies, an extensive surface trenching mapping and sampling programme is currently underway ahead of the RC drilling campaign. Trenches have been completed so far at the northern end of the Chigargunta block and in the Peddapartikunta and Sanganapalle blocks. Three RC holes have been completed at Chigargunta (results pending) that confirm the geological continuation of mineralised structures seen in the trenching and that IP geophysics will continue to bean important exploration tool in the South Kolar belt.
About Kolar Gold Limited
Kolar Gold Limited is an Indian gold exploration and development company, listed on the AIM market (KGLD), that has an experienced international board and strong local partners. KGL has rights to explore and develop one prospecting licence and 13 further licence applications in the Kolar Gold Belt, an 80 kilometre long Archaean Greenstone Belt, in Southern India. The Kolar Gold Belt is one of the most prospective underdeveloped Archaean Greenstone Belts in the world and is regarded by Mr Andrew J Vigar of Mining Associates Limited, the Competent Person, as comparable to the Archaean Greenstone Belts of South Africa, Canada and Western Australia which have similar geology, structure and style of mineralisation. This project area includes 32 known mineralised prospects and covers 568 square kilometres in the southern states of Andhra Pradesh, Karnataka and Tamil Nadu. KGL commenced exploration on the first Prospecting Licence in South Kolar in February 2011. KGL is also jointly pursuing, with the mine employee unions, the acquisition and revival of the neighbouring historic Kolar Gold Fields which has produced 25 million ounces of gold at 15.9 grams per tonne over 120 years until closure in 2001.
The summary review of geology and drilling results was conducted by Mr Andrew J Vigar who has sufficient experience which is relevant to the Archaean gold style of mineralisation and deposits 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' (Australia) and is a Qualified Person as defined in NI43-101 (Canada). He is a Fellow of The Australasian Institute of Mining and Metallurgy (Melbourne) and a Member of the Society of Economic Geologists (Denver). Mr Vigar is employed by Mining Associates Limited of Hong Kong. Mr Vigar conducted a site visit to the Kolar Gold Projects and adjacent properties from 28 June to 2 July 2010. Mr Vigar does not have any interest (current or past) in any of the assets covered by this report.
For further information please contact:
Kolar Gold Limited
+617 3846 0211
Cenkos Securities plc
Nomad and Joint Broker
Beth McKiernan/Ken Fleming
020 7397 8900/0131 220 6939
Ocean Equities Limited
020 7786 4370
Ed Portman/Lydia Eades
020 7920 3150