Crater Gold Mining has received excellent initial results from diamond drilling at its High Grade Zone (HGZ) project at Crater Mountain. The HGZ project is earmarked to commence gold production subject to the outcome of a mining lease application.

The key outcome of results received to date is that they highlight the very strong correlation with the geology and grades encountered directly 40 metres above in the underground development. Further excellent results are all in the planned mining zone.

Drilling confirms a broad mineralized zone hosting narrow high grade structures over a strike currently of about 60 metres and down dip of about 90 metres.

Crater Gold’s managing director Greg Starr said “We are very encouraged by these ongoing HGZ results because we see strong correlation between results returned in the underground development and the drill holes. This gives us confidence that the high grade structures, although narrow, are so far showing continuity to depth which will facilitate more detailed modelling and mine planning.”

Crater Gold began diamond drilling at the HGZ in early March using an underground drill rig whose primary function is to follow extensions of identified ore structures. The current drilling program incorporates a series of angle holes targeting below the underground workings of the exploration adit. The initial drilling is from the surface and the rig will then move underground to drill from specially prepared drill platforms.

Because it is primarily an underground scout drilling tool, the rig is smaller and lighter than the surface drill rigs previously used by the company, with considerably less depth penetration and smaller core diameter making continuous full core recovery a constant challenge.

The drilling program is designed to confirm immediate strike and dip continuity of narrow high grade structures encountered within a coherent zone in the underground exploration development.

The company continues to progress its Mining Lease Application process in consultation with the PNG Minerals Resources Authority (MRA) and the Department of Environment and Conservation (DEC). The application covers an area of 1.6sqkm and the commencement of mining will all be underground.

The very high grades of coarse free gold mineralization in these structures will support a small, highly selective narrow vein mining operation requiring simple mining infrastructure and recovery of gold by gravity separation without the need for complex processing technology.

Mining will be carried out underground by hand-held mining methods at a monthly rate of about 1000 tonnes.

The HGZ was previously mined at high grades (several ounces per tonne interpreted from the volume of ore extracted and gold produced) at surface and in shallow shafts by local miners, with an estimated 15,000 ounces extracted between 2005 and early 2013.

In preparation for processing and interim bulk sampling a 40 tonnes/day gravity processing plant has been procured and has arrived. Rail tracks and mine cars to handle the rock from underground have also arrived. Both the plant and the rail equipment will be transported to site in the coming weeks.

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