Additional high grade gold potential at depth at Imwauna

Compilation and assessment of drill hole results from the Imwauna Project, Normanby Property, Milne Bay Province, Papua New Guinea, has defined two significant targets for high grade mineralisation at depth (50 to 150m) below the drilled mineralisation.

This compilation has been carried out as part of the resource estimate, which is in progress.

Drilled vertical depth of mineralisation (metres below ground surface) varies from 50 to 200m and is open to depth along the entire zone.

Mineralisation is open, or extends beyond the deepest hole along the complete section – in some places with relatively high grade gold, in other places low grade gold.

Gold grades, widths of intersection and number of intersections across the zone are variable with two higher grade gold zones, approximately 300m apart, separated along strike by a lower grade zone.

The central part of the drilled zone appears to be increasing in grade and width with depth. This points to a significant target for future drilling and future addition to resources.

The higher grade mineralisation at the northern end of the drilled zone is still open at depth.

Bob McNeil, CEO and Chairman, said that a system such as the Imwauna System which appears to extend over a wide zone five kilometres in length still requires large numbers of drill holes to determine its ultimate potential.

Drilling will have to continue for a number of years yet to determine the full potential. Although the main gold zone is more or less continuous there are rapid changes in widths and gold grades. In addition multiple intersections, including parallel veins and discordant “splits”, complicate the overall interpretation.

The increasing grades with depth in the central part of the system and the likely further extension to depth of the northern high grade zone are exciting in terms of the possibility of defining more high grade mineralisation.

In addition, the potential for additional gold mineralisation away from the present drilled area based on a few reconnaissance drill holes, geophysics, soil geochemistry, trenching and rock sampling is excellent.

At this point in time we are on track to announce the initial resource estimate, based on the first 140 holes drilled for which assays are available, about mid June, with the independent NI 43-101 being filed on SEDAR before the end of July. Drilling continues with assays for at least a further 10 holes pending.