News: Excelsior Gold intersects broad gold zones at Kalgoorlie North

Excelsior Gold (ASX:EXG) has delineated further extensions to gold mineralisation at the Parkerville prospect within its Kalgoorlie North Gold Project in Western Australia.

The company has the potential to be a near-term producer with significant exploration upside.

Results included 10 metres at 3.99g/t gold from 36 metres and 27 metres at 1.66g/t gold from 74 metres, and mineralisation remains open down dip and along strike.

A new resource estimation to be undertaken followed by mining studies for addition to the proposed mining schedule which will improve the potential development of a satellite open pit mining operation in the area.

The Parkerville prospect lies within the proposed satellite mining precinct located 2.2 kilometres south of the large Zoroastrian open pit and underground mining area.

This satellite mining area hosts total current Indicated and Inferred mineral resources of 1.05 million tonnes grading 2.21g/t gold for 74,700 ounces of gold and includes resources at Jackorite, Nerrin Nerrin, Big Blow South and Castlereagh.

Notably, all these prospects offer potential for open pit mining.

Open pit Ore Reserves for these deposits, based on the March 2014 Pre-Feasibility Study totalled 277,200 tonnes at 2.49g/t for 22,200 ounces of gold.

The potential open pits are in close proximity, which will lower costs by simplifying scheduling of mining equipment and utilisation of centralised waste and ore stockpiling areas.

Gold mineralisation lies on the same structural trend as the large Excelsior deposit that holds resources of 11 million tonnes 1.28g/t gold for 456,100 ounces just 3.3 kilometres to the north.

During the most recent quarter, Excelsior signed a binding term sheet with Norton Gold Fields, providing a guaranteed gold ore processing allocation at the nearby Paddington Mill.

This includes a minimum allocation of 2.5 million tonnes, at a notional treatment rate of 500,000 tonnes per annum, with options to extend for a total cumulative allocation of up to 5 million tonnes.

The agreement provides a low capital cost pathway to early production and cashflow.