Blackthorn Resources Says Incorrect Drilling Results From Mumbwa JV

Drilling results from the Mumbwa gold joint venture between Blackthorn Resources Ltd. (BTR.AU) and BHP Billiton Ltd. (BHP) were incorrect and overstated the quality of the resource, Blackthorn said Monday.

The company said that results reported to the Australian Securities Exchange Oct. 20, which showed "significant" gold presence in drilling cores, "now appear to be incorrect and ... the actual gold grade is very low".

Blackthorn shares dropped 4.7% on the news, and were down 3 Australian cents to 61.5 cents at 2328 GMT.

The drilling results showed eight meters of ore with 14.09 grams of gold per ton around 1 kilometer below the surface, a level consistent with the better Southern African gold mines.

However, Blackthorn said that despite the results of the first test, a re-testing by the Johannesburg laboratory of assay company SGS S.A. (SGSN.VX) found "very low grade gold".

The company did not say why a re-testing was carried out. However, Blackthorn said SGS failed to inform BHP, the 40% partner in the project, of the discrepancy ahead of its announcement to the ASX.

Both BHP and SGS were investigating the situation, while Blackthorn was auditing all 15 survey holes from the current phase four of its exploration program: "As a precaution, Blackthorn Resources is considering all Phase 4 results to be subject to confirmation," the explorer said.

 
   -By David Fickling, Dow Jones Newswires; [phone]; [e-mail]