7th November 2011
Kolar Gold Limited
Kolar Gold confirms three significant IP anomalies in South Kolar
Kolar Gold Limited ("KGL"), the Indian focused gold exploration and development company,todayannouncesthat, it has completed 40 line km of detailed Induced Polarization ("IP") Surveys to delineate conductive zones favourable for sulphide mineralisation that have potential for associated gold mineralisation. The survey was completed to assist identification of priority targets at South Kolar for follow up trenching and drilling. Diamond drilling of the Eastern lodes at Chigargunta is already underway and reverse circulation (RC) drilling is scheduled to commence in November on the Peddapartikunte, Sanganapalle and Gollapalle blocks which are currently being trenched.
· 40 line km of IP Surveys completed over South Kolar licence
· Chigargunta survey has confirmed three significant anomalies over a strike length of 2 km corresponding to extensions of the Chigargunta western and eastern lodes and the axial plane of an antiformal structure in the centre
· Chigargunta Eastern lodes are currently being diamond drilled. Six holes targeting E2, E3, and E4 lodes have been completed, logged and in laboratory awaiting assay results.
· IP anomalies have been traced north of Chigargunta through Peddarpartikunte and Sanganapalle blocks
· IP Anomalies at Bisanatham block confirm southerly extensions of both Bisanatham and New Bisanatham lode structures
· Surface trenching of anomalies is currently in progress
· RC drilling campaign of approximately 4,000m will commence November at the Peddarpartikunte, Sanganapalle and Gollapalle blocks.
Commenting on the results, Mr. Richard Johnson, Chief Operating Officer of KGL, said: "The IP Survey has rapidly confirmed the continuity of auriferous structures previously mined at the Chigargunta and Old Bisanatham mines at the southern and northern limits of the South Kolar licence area over the full 20km extent of the licence area. This has generated numerous highly prospective targets which require follow up drilling"
The Ground IP Survey, using a state of the art Scintrex IPR-12 receiver, was undertaken by Fugro on behalf of KGL. The IP data was modeled to produce 2D inversion models and slice plans for chargeability and resistivity for different depth intervals down to 90m. A total of 26 profiles were completed at known prospect areas along the 20km South Kolar licence area as part of a wider regional exploration programme including further geochemical and geophysical exploration, trenching and drilling. The IP survey covered six key prospect blocks: Chigargunta in the south, Peddarpartikunte, Sanganapalle, Gollapalle, Kudithanapalle and Bisanatham in the north.
In addition 3 sets of trenches are underway at Chigargunta E3 & E2 lodes; Peddarpartikunte situated 1km north of Chigargunta NE & the Sanganapalle Block.
Of the total IP survey, nine traverses for a total of 15 line km were completed in the Chigargunta block. The Chigargunta block is a large high priority target zone in the South Kolar Prospecting Licence (GP 13) extending approximately 3km north of the Chigargunta mine. The target zone includes the Chigargunta NE deposit which KGL has recently drilled with high-grade gold mineralisation encountered (as announced on 15th August 2011),and which hosts an indicated resource of 13,200oz at 15.1g/t based on historic drilling.
The IP survey models and chargeability distribution slice plans reveal three significant anomalies over a strike of 2 km. To the west a strong anomaly coincides with the western lodes in the mafic rock units. On the eastern side a N-S trending strong chargeability anomaly corresponds with the eastern lodes hosted in the felsic units. There is also a significant anomaly in the centre that follows the axial plane of an antiformal structure and coincides with the Guvalagunta prospect. All these anomalies continue below 90m depth and confirm the northerly extensions of the lodes mined at the Chigargunta mine.
These same anomalies persist at the Sanganapalle Block in both the mafic and felsic contacts and within the felsic units
The eastern lodes in the Chigargunta block are currently being diamond drilled where previous mapping and rock chip sampling has confirmed surface gold mineralisation and where IP geophysics has also confirmed sulphide-bearing structures to extend below a depth of 90m.
An RC drill rig has been mobilised to start an additional drilling campaign in mid-November over the newly defined anomalies between Chigargunta and Bisanatham where surface outcrops are limited by soil cover. Approximately 4,000m of RC drilling is planned to be carried out in these target zones as part of the budgeted drill programme for 2011/12.
Refer "South Kolar target areas" map attached
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
+617 3846 0211
Cenkos Securities plc
Nomad and Joint Broker
Beth McKiernan/Ken Fleming
+44 20 7397 8900/+44 131 220 6939
Ocean Equities Limited
+44 20 7786 4370
Ed Portman/Paul Youens
+44 20 7920 3150
About Kolar Gold Limited
Kolar Gold Ltd (KGL) is an Indian gold exploration and development company, listed on AIM London (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.