SouthGobi Energy Resources has discovered an encouraging low sulphidation epithermal gold and silver system on its 90% owned project in Java, Indonesia.

The discovery is within an 8km by 2-3km structural corridor where other occurrences of sinter, silica caps, high level epithermal veins and anomalous levels of gold and silver have recently been recognized.

An initial program of more than 70 trenches has identified numerous high level epithermal veins in an area 520m wide and 200m in length. The veins are open to the south-west and may extend beneath a silica cap and thick soil for an additional 500 metres. Trenching continues to uncover new veins.

SouthGobi CEO Peter Meredith says the exact location of the project is not being disclosed at present for competitive reasons.

The company will shortly begin an initial 3000-metre diamond drill program.

Geologists from SouthGobi and Ivanhoe Mines believe that the nature of gold grades at surface of the exposed epithermal system are highly prospective in this geological environment.

Ivanhoe Mines is SouthGobi's largest shareholder, owning about 87% of the issued and outstanding shares.

www.southgobi.com