Drilling Commences at Nyanzaga Gold ProjectHigh grade zones at...

Drilling Commences at Nyanzaga Gold Project

High grade zones at Tusker deposit targeted
The Board of Indago Resources is pleased to announce the commencement of drilling at the Nyanzaga Gold Project in Tanzania. The drilling is targeting high grade zones within the larger overall Tusker deposit resource, where concept studies have shown the strong potential for development of a long life, high quality gold project.
The overall indicated and inferred JORC resource at Tusker stands at 123M tonnes @ 1.15g/t gold containing 4.5M ounces of gold (as reported by Sub-Sahara Resources NL in September 2006).
Since acquiring its 49% interest in the Nyanzaga Project Joint Venture in March this year, Indago has been focusing on developing a Concept Study to progress the Project and establishing the in-country operational base necessary to support the ongoing evaluation and exploration programs. A significant work program has been undertaken and is on target to deliver the initial outcomes of the Concept Study by 30 June.
Following success from the current drilling program, Indago intends to move into an accelerated feasibility program at Nyanzaga leading onto the delivery of a full definitive feasibility study and accelerated development of the Project. Completion of the definitive feasibility study will see Indago increase its interest in the Joint Venture to 68%, with Barrick Exploration Africa Ltd (“Barrick”) holding the remaining 32%.
Indago Resources Managing Director George Bauk said that the intensive work program heralded the emergence of Indago as a significant gold company.
“The acquisition of Nyanzaga delivered on our consistently stated intention to acquire an advanced project with strong development potential. As we outlined at the General Meeting in April, the Company is committed to rapidly delivering the initial Concept Study outlined to shareholders by June 30” said Mr Bauk.
The initial drilling program at the Tusker deposit is designed for 5,000 metres of RC drilling and 3,000 metres of diamond drilling with a further 10,000 metres of drilling identified depending on initial results.
As part of the Concept Study, extensive resource re-modelling has been undertaken to allow the definition of separate higher grade envelopes within the larger overall Tusker resource. The revised resource model is currently undergoing final validation review and JORC classification and we anticipate being able to release the results to the market by the end of June.
“Our initial Concept Study is evaluating selective mining options for a higher grade, low cost gold mining operation. Positive preliminary results have been achieved, and we expect to update the market shortly on the potential for a substantial gold operation at Nyanzaga” said Mr Bauk.
Additional Drilling planned for Kilimani prospect
In addition to the Tusker deposit, the nearby Kilimani prospect provides a potential additional ore source for development in conjunction with the Tusker deposit. Kilimani has been previously drilled by Barrick and shown to have significant near surface mineralisation over a drill tested strike length of 650 metres.
Kilimani is located approximately 600 metres from the Tusker deposit and the development of Kilimani would have clear economic synergies with any development at Tusker.
A program has been developed for a second drill rig to commence drilling at Kilimani at the end of June. The initial program for this rig will confirm geological detail of past drilling carried out by Barrick and allow the development of a drilling program to support the definition of a JORC compliant resource model at Kilimani for mine planning purposes.
“Significant synergies between Kilimani and Tusker obviously exist, and we are seeking to rapidly define this potential. The known mineralisation identified by Barrick gives us great encouragement a suitable resource can be defined at Kilimani to allow its co-development with Tusker” said Mr Bauk.
The Company looks forward to continuing to update shareholders on the progress of this exciting Project.
For further information contact:
George Bauk
Paul Downie / Shane Murphy
Managing Director
Indago Resources Limited
T+61 08 6380 3600
FD Third Person
T +61 8 9386 1233
0414 947 129 /0420 945 291
BACKGROUND TO INDAGO RESOURCES
An emerging gold company.
GOLD
•
Indago Resources has a 49% interest in an advanced gold project at the Tusker deposit in the rich Lake Victoria Goldfields of Tanzania in a joint venture with Barrick Exploration Africa Ltd. This interest can be increased to 68% on the finalisation of a positive bankable feasibility study.
•
The deposit contains a resource of 4.54 million ounces estimated in accordance with JORC guidelines as reported by Sub-Sahara Resources NL in September 2006:
Category
Tonnes
Gold g/t
Metal (oz)
Indicated
89,560,000
1.20
3,455,000
Inferred
33,710,000
1.00
1,080,000
TOTAL
123,270,000
1.15
4,540,000
Tusker Global Resource above 0.4 g/t Gold
•
In addition, Indago has exposure to total gold exploration holdings of approximately 870km2 in joint ventures with both Barrick and Resolute Mining Ltd as well as some 100% owned properties.
URANIUM
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A joint venture with Uranium Resources plc in Tanzania:
o
Indago is Manager and has a 60% interest in the St Henri JV over 2,938km2;
o
a 42.5% interest in the Kapinga JV over 9,589km2; and
o
a 45% interest in the Mkwebe JV over 211km2.
•
Indago also holds a 15% interest in the Mdaba-Mkuju JV (Sterling Resources – 85%) in southern Tanzania which covers 15,915km2.
BASE METALS
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An agreement with BHP Billiton to explore for base metals in the West Georgetown region of northern Queensland.
o
Indago has 100% ownership of both the northern and southern tenements with BHP Billiton retaining a claw back provision over the southern tenement (EL14722).
•
A tenement package of 220km2 over the Snowbird Base Metals and Wendy Gold Projects in the Northwest Territories of Canada. BHP Billiton holds a royalty over the Snowbird Project.
•
Ownership of the exploration data relating to the Mid-Continent Nickel project in Minnesota, USA with land positions established over the identified drill targets.
The following Competent Persons statement relates to the 2006 Tusker resource estimate reported by Sub Sahara. Indago Resources is not aware of any further resource estimation released since this work. The information in this report that relates to Mineral Resources is based on a resource estimate compiled by Ms Jillian Irvin, who is a Member of Australian Institute Geoscientists. The work was completed under the supervision of Mr Patrick (Rick) Adams who is a Member of the Australian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Adams is a Director of Cube Consulting. Ms Irvin is a full-time employee of Cube Consulting Pty Ltd. Ms Irvin has sufficient experience which is relevant to gold mineralisation and resource estimation to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Ms Irvin consents to the inclusion in this report of the information, in the form and context in which it appears.