CRATER Gold Mining has intersected very high grade gold in separate narrow mineralized structures underground in the High Grade Zone (HGZ) at Crater Mountain Gold Project. Bonanza grade assays returned from the No 1 East Cross Cut left hand wall include 0.2 metres @ 847 grams/tonne gold, 1.0 metres @ 554 grams/tonne, 0.2 metres @ 525 grams/tonne and 0.2 metres @ 523 grams/tonne.

The focus of exploration is to intersect these narrow mineralized structures and to individually evaluate them with channel sampling with a view to possible future underground mining. The veins of relevant interest are those recording significant grades and which might be extracted using small-scale, highly selective, narrow vein mining techniques. Channel samples of individual structures are taken perpendicular to the structure, representing true width, along the sidewalls of the drive and cross cut development.

Other results include 0.2 metres @ 233 grams/tonne in Main Drive right hand wall, 0.2 metres @ 166 grams/tonne in No 1 East Cross Cut left hand wall, 0.2 metres @ 109 grams/tonne in No 1 East Cross Cut face, 1.0 metres @ 63 grams/tonne in Main Drive right hand wall, 0.2 metres @ 77 grams/tonne in Main Drive face, and 0.2 metres @ 56 grams/tonne in Main Drive right hand wall.

A broad 10-15 metre wide zone of intense brecciation and alteration trending north south has been identified in underground exploration development at HGZ. This zone hosts numerous narrow (up to 30cm wide) auriferous structures of intense clay, limonite, hematite and pyrite alteration with quartz and frequent coarse visible free gold.

Crater Gold mining engineer and PNG country manager Richard Johnson says, “These results are very exciting and provide confirmation of reports of significant quantities of gold being extracted by local artisanal miners from shallow workings. Drive development and bulk sampling are under way.”

An underground diamond drill has been mobilized with drilling expected to begin in December 2013 from a drill platform at the end of the No1 West Cross Cut. A total of 10 diamond drill holes will be drilled from this site in three fans of holes providing potential drill coverage for 120 metres of strike and 100–120 metres of dip extension of the projected mineralized zone. Further diamond drilling will be carried out from additional drill platforms to be established as the Main Drive development progresses to the east.

Following only 2 months of underground development in the HGZ, Crater Gold has generated sufficient geological information to prepare a pre-feasibility study (PFS), a key report in the mining lease application process for HGZ. A mining lease application was expected to be made by the end of 2013.