exploration drilling seeks to enlarge gold res

13 May 2008: Brisbane, Australia – Citigold Corporation Limited (Citigold)
(ASX:CTO, DIFX:CTO, FSE:CHP) is pleased to announce an update on its Charters
Towers gold project.
Now that a cash flow base has been established with continuous gold production
from the Charters Towers South (Warrior) mine, Citigold is seeking to expand it’s
existing 10 million ounce resource by drilling additional targets in the goldfield.
One initiative is the planned drilling of a 2,000 metre deep hole, to test for a possible
source of the high grade Charters Towers mineralisation. The hole will also test for
extensions and repetitions of known mineralisation.
This is an unusual exploration hole. The hole, if it hits one or more ore grade gold
intersections, has the potential to substantially increase the current resource if
mineralisation can be proven to persist below the base of the resource estimate at
1,200 metres. This is because the east-west continuity is well proven and the down
plunge extent of the gold reefs is consistent across the known reef areas. This deep
drilling aims to test that the plunge of the reefs at great depth is also consistent.
Recently the Managing Director
and CEO, Mr Mark Lynch,
inspected the third new Atlas
Copco Diamec U8 drill rig after its
arrival at the Company's Charters
Towers mine site. This is the fifth
diamond drill in Citigold’s fleet and
will be used to drill the deep 2,000
metre hole. This will be the first
hole drilled to these depths in the
hard Charters Towers granodiorite
country rock.
The program, the Charters Towers Deeps project, qualified for funding from the
government under round one of the Collaborative Drilling Initiative of the Smart
Mining – Future Prosperity Program, and will see the contribution of $150,000 by the
Queensland Government. The previous deepest hole drilled at Charters Towers was
1,270m deep and intersected the targeted gold reef. However, modern studies, by James Cook University’s Dr Oliver Kreuzer, lead to the conclusion that the gold
bearing structures may extend from 3,000 metres to 5,000 metres depth.
This hole will have three main purposes :-
1. to prove the reefs exists to 2,000 metres,
2. to drill through an area which Citigold’s technical staff believe may be the main
feeder zones for the Charters Towers style of mineralisation, and
3. to drill through a completely different formation (the Columbia Creek Complex)
which is believed has the capabilities to host Charters Towers style
mineralisation, but has never been explored.
The Columbia Creek Complex has similar mechanical properties to the host rocks of
the Charters Towers reefs, which show repeated injections of gold and sulphide
minerals into kilometre-long fissures that were repeatedly reactivated, cracking open
and re-sealing with new mineralisation. It is believed the same fracture pattern
exists in the Columbia Creek rocks and should also be mineralised as they are of
similar age.
The block diagram shows the collar location and hole path of the deep hole,
targeted to cut through several known structures which fed from a common source
area, and then continuing on into an area which may host a source of the
mineralisation.
Most of the known vein systems dip towards the same location, an area to the
northeast of Charters Towers lying within Citigold’s tenement boundaries. The structures are predictable geometrically and good intersections are anticipated on
the known veins. Defining the source will allow better prediction of the high grade
areas for mining, as mineralisation moved away from its source.
At this stage it is expected that mobilisation of the drill rig will commence in late May
and that actual drilling will be underway by the end June.