Kolar Gold Limited Indian Resource Size Increase (1126N)

TIDMKGLD

RNS Number : 1126N

Kolar Gold Limited

21 October 2016

Kolar Gold Limited

("Kolar Gold", "Kolar" or the "Company")

Indian Resource Size Increase

Kolar Gold Limited (LON: KGLD), the AIM-quoted gold exploration and mine development company, is pleased to provide an update on its Indian interests.

Jonnagiri

As previously announced, Geomysore Services (India) Private Limited ("Geomysore"), in which Kolar owns 22.31% equity as at today's date, is in the process of undertaking an Economic Feasibility Study ("EFS") in respect of building a producing open pit gold mine from the East Block at Jonnagiri, for which Geomysore has been granted a 30-year mining licence to mine 365,000 tonnes of gold ore per year.

Whilst drilling and mine planning for the EFS continues at Jonnagiri, Geomysore commissioned Golder Associates Pty Limited ("Golders") to review the drilling programme and estimate the JORC compliant resource at Jonnagiri. Following completion of this review based on the data available as at 30 June 2016, Golders has estimated a JORC compliant resource (the "Resource") of 351,000 ounces (Indicated and Inferred) in aggregate at the East and West (formerly 'Temple Deep') blocks (234,000 ounces and 117,000 ounces respectively), a significant increase from the approximate 150,000 ounces identified at the East Block and announced on 30 March 2016.

Kolar Gold CEO, Cameron Parry, commented: "We are delighted to report that the JORC compliant resource at Jonnagiri has materially increased since earlier this year thanks to the significant improvement at the East block and through the addition of the underground prospect in the West block.

"The EFS is scheduled to be completed before the end of the first quarter next year. Kolar intends to provide an interim update on the EFS drilling results at Jonnagiri over the next couple of months. Upon completion of the EFS drilling programme and pit optimisation study, the size of the JORC resource will be updated further.

"Kolar Gold continues to progress its threefold strategy; build value in Kolar's Indian gold interests, establish fintech applications that can leverage off Kolar's gold focus in India, and, as recently secured in Finland, develop high grade gold assets in a second jurisdiction."

Resource Update Details

The JORC Resource at Jonnagiri has been estimated using a 0.5 g/t cut off for potential open pit activities and a 2 g/t cut off for potential underground activities at the West block. Golders also provided Geomysore with the West Block model to assess the underground viability at lower cut off grades in the context of the Indian cost structure. The summary of the resource estimate is as follows:

 
                                                  Gross (1)               Net attributable 
                                                                               (1) (2) 
----------------  -----------  --------  --------------------------  ------------------------- 
     Deposit         Class      Cut-off   Tonnes     Au     Ounces    Tonnes     Au     Ounces 
                                  (g/t     (Kt)     (g/t)              (Kt)     (g/t) 
                                  Au) 
----------------  -----------  --------  -------  -------  --------  -------  -------  ------- 
 East Block        Indicated      0.5     1,800     1.48    85,000     402      1.48    18,964 
----------------  -----------  --------  -------  -------  --------  -------  -------  ------- 
           Inferred               0.5     3,700     1.26    148,000    825      1.26    33,019 
 ----------------------------  --------  -------  -------  --------  -------  -------  ------- 
           Sub-total              0.5     5,500     1.33    234,000   1,227     1.33    51,983 
 ----------------------------  --------  -------  -------  --------  -------  -------  ------- 
 West Block 
  (Temple) 
  - Open 
  Pit              Indicated      0.5      500      1.05    18,000     112      1.05    4,016 
----------------  -----------  --------  -------  -------  --------  -------  -------  ------- 
           Inferred               0.5      300      1.13     9,000      67      1.13    2,008 
 ----------------------------  --------  -------  -------  --------  -------  -------  ------- 
           Sub-total              0.5      800      1.08    27,000     179      1.08    6,024 
 ----------------------------  --------  -------  -------  --------  -------  -------  ------- 
 Jonnagiri 
  Total 
  - Open 
  Pit              Indicated      0.5     2,300     1.38    103,000    513      1.38    22,979 
----------------  -----------  --------  -------  -------  --------  -------  -------  ------- 
           Inferred               0.5     3,900     1.25    158,000    870      1.25    35,250 
 ----------------------------  --------  -------  -------  --------  -------  -------  ------- 
             Total                0.5     6,200     1.30    261,000   1,383     1.30    58,229 
 ----------------------------  --------  -------  -------  --------  -------  -------  ------- 
 West Block 
  - Underground     Inferred      2.0      800      3.52    90,000     178      3.52    20,079 
----------------  -----------  --------  -------  -------  --------  -------  -------  ------- 
 Jonnagiri 
  Total 
  - Combined         Total         -      7,000     1.55    351,000   1,561     1.55    78,308 
----------------  -----------  --------  -------  -------  --------  -------  -------  ------- 
 
   (1)     Columns may not total exactly due to rounding 

(2) The Net Attributable resource is for illustrative purposes only and calculated by reference to Kolar Gold's equity interest in Geomysore, in compliance with the Note for Mining and Oil and Gas Companies 2009.

The information in this statement which relates Mineral Resource estimation and classification of Mineral Resources is based on information compiled by Mr Andrew Weeks who is a full-time employee of Golder Associates Pty Ltd, and a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Weeks has sufficient relevant experience to the style of mineralisation and type of deposit under consideration and to the activity for which he is undertaking to qualify as a Competent Person as defined in the JORC Code (2012 Edition). Mr Weeks consents to the publishing of Mineral Resources in the form and context in which it appears.

For further information, please visit www.kolar-gold.com or contact:

 
Kolar Gold Limited                        Tel: [phone] 
 Cameron Parry (Chief Executive Officer) 
 Luke Cairns (Executive Director) 
WH Ireland Limited (Nominated Adviser)    Tel: [phone] 
 Tim Feather 
 Ed Allsopp 
Vicarage Capital Limited (Broker)         Tel: [phone] 
 Rupert Williams / Jeremy Woodgate 
Tavistock (Financial PR)                  Tel: [phone] 
 

Emily Fenton

GLOSSARY

 
 "g/t"         grammes per tonne 
 
 "Indicated"   an 'Indicated Mineral Resource' 
                is that part of a mineral resource 
                for which quantity, grade or 
                quality, densities, shape and 
                physical characteristics, can 
                be estimated with a level of 
                confidence sufficient to allow 
                the appropriate application 
                of technical and economic parameters, 
                to support mine planning and 
                evaluation of the economic viability 
                of the deposit. The estimate 
                is based on detailed and reliable 
                exploration and testing information 
                gathered through appropriate 
                techniques from locations such 
                as outcrops, trenches, pits, 
                workings and drill holes that 
                are spaced closely enough for 
                geological and grade continuity 
                to be reasonably assumed 
 
 "Inferred"    an 'Inferred Mineral Resource' 
                is that the part of a mineral 
                resource for which tonnage, 
                grade and mineral content can 
                be estimated with a low level 
                of confidence. It is inferred 
                from geological evidence and 
                assumed but not verified geological 
                or grade continuity. It is based 
                on information gathered through 
                appropriate techniques from 
                locations such as outcrops, 
                trenches, pits, workings and 
                drill holes which may be of 
                limited or uncertain quality 
                and reliability. 
 
 "JORC"        the Australasian Joint Ore Reserves 
                Committee Code 
 
 "kT"          thousands of tonnes 
 
 "resource"    the calculated amount of material 
                in a mineral deposit, based 
                on limited drill information. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

DRLDMMZGVGVGVZM

(END) Dow Jones Newswires

October 21, 2016 02:00 ET (06:00 GMT)