mineral resource increased to 11.09 moz aueq

Mineral Resource Increased to 11.09 Moz AuEq
Kings Minerals is pleased to announce the results of the gold equivalent mineral resource estimate for the
Cerro del Gallo porphyry gold-silver-copper deposit at San Anton, in Guanajuato State, central Mexico.
Highlights
• Mineral Resource Estimate increased to 11.09 Moz AuEq
• New resource represents a 14% increase in contained metal
• First measured resource defined at 0.41 Moz AuEq
• Indicated resource increased to 3.10 Moz AuEq
• Measured and indicated resource categories increased by 33%
• Increased geological confidence significantly upgrades JORC resource categories
Background
Since the September 2005 resource estimate (9.74 Moz AuEq) the company has drilled a total of 39 RC
and diamond core holes for a total of 9,204 metres to the cut off date of 16th December 2005 for the
current resource estimate.
Global Resource Estimate
The new global upgraded resource estimate, at a 0.3g/t AuEq cut-off grade, for the majority of the drilling
to December 2005 is:
454 Mt @ 0.33g/t Au, 12g/t Ag, 0.10% Cu for 11.09 Moz AuEq
Historically the following resource estimates have been reported at a 0.3g/t AuEq cut-off grade:
September 2005:
415Mt @ 0.30g/t Au, 12g/t Ag, 0.10% Cu for 9.74Moz AuEq
March 2005:
175Mt @ 0.49g/t Au, 17g/t Ag, 0.09% Cu for 5.6 Moz AuEq
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Higher Grade Gold Zone
The current work has delineated a higher grade gold-rich mineral resource containing 3.51 Million
ounces AuEq in the higher Measured and Indicated resource categories using a 0.8g/t AuEq cut-off
grade. Drilling activities since the last mineral resource estimate have concentrated on the broadly defined
higher grade gold zone with the objective of increasing the confidence level of the resource in this area.
This work has resulted in the elevation of 61% of the resource, at a 0.8g/t AuEq cut-off, to the higher
measured and indicated categories.
This Measured and Indicated mineral resource is now of sufficient size to commence ore reserve
estimation and preliminary open pit design.
Using a 0.8g/t AuEq cut-off grade, an arcuate annular higher grade gold-rich zone is defined, as is shown,
below:
Cerro del Gallo Gold Rich Domain
Using 0.8g/t AuEq Cut-off
Resource
Category
Tonnes
millions
Au
g/t
Ag
g/t
Cu
%
AuEq
g/t
AuEq
Moz
Measured 10 0.82 16 0.09 1.29 0.41
Indicated 90 0.49 17 0.13 1.07 3.10
Inferred 65 0.47 15 0.11 0.97 2.02
Total 165 0.50 16 0.12 1.04 5.53
Notes:
1. Block model with grade estimate prepared by Golder Associates Pty Ltd, Brisbane Office, Queensland
2. The resource estimate is based on a total of 24, 635 metres of drilling in 110 drill holes of which 24 holes are
diamond core and 86 holes are reverse circulation face sampled holes. Most of the resource is within 300
metres of the land surface
3. Gold assays by 30 gram fire assay with AAS finish (and gravimetric check), silver and copper assays by
multi-acid digestion with AAS or ICP finish
4. In-situ bulk density of 2.67 t/m3
5. A geological block model with block sizes of 25m x 25m x 12m was constructed. A bulk mining scenario has
been assumed
6. Au, Ag and Cu grades were estimated by ordinary kriging within constrained geological domains using
Vulcan® Version 6.0
7. High grade cuts were applied for each geological domain ranging from 1.0 to 3.0g/t Au, 70 to 100g/t Ag and
0.3 to 1.0% Cu
8. QA/QC checks on sampling and assaying quality are satisfactory
9. Au equivalent has been calculated as AuEq = Au + (Ag/60) + (Cu x 2.3)
The mineral resource estimate is based on a total of 110 diamond core and RC drill holes over an area of
800 x 700m. Despite this extensive drilling program it is noteworthy that:
• The Cerro del Gallo porphyry system still remains open laterally in all directions around the central
felsic intrusion, and also at depth;
• Every hole completed to date has intersected significant, wide zones of porphyry-style gold, silver
and copper mineralisation;
• The gold-rich zone remains open within the annulus, and at depth;
• A “gold skarn” and associated “magnetic low” has been identified within the porphyry alteration
system and its potential remains to be assessed;
• Magnetic and coincident IP anomalies peripheral to the porphyry alteration system need to be
assessed; and
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• Only three deep core hole results were available at the time of this resource study and these have
been included in the new resource estimate.
Gold, silver and copper mineralisation occurs throughout the central felsic intrusion and within a 200+m
wide annulus of strongly silicified tuffaceous rocks surrounding the felsic intrusion. The mineralisation is
zoned concentrically with a strongly anomalous molybdenum core coincident with the felsic intrusion, an
inner gold-rich zone and an outer, discontinuous copper-silver rich zone.
Diamond core and RC drilling is continuing.
Scoping Study
Intermet Engineering Pty Ltd, in Perth Western Australia, has been commissioned to complete a scoping
study for the Cerro del Gallo porphyry gold-silver-copper deposit. Results from this new mineral resource
estimate will be incorporated into the scoping study which is due to be completed at the end of March
2006. Metallurgical testwork is also in progress. Testwork is planned to investigate the comminution,
flotation, cyanidisation and gravity concentration characteristics of the higher grade gold-rich zone. These
results will also be incorporated into the scoping study.
Joint Venture with Goldcorp Inc
Kings Minerals has exercised its rights under the joint venture agreement with Goldcorp Inc (formerly
Wheaton River Minerals Limited) and its subsidiaries to remain at 51% in the San Anton Project. A jointly
owned company will now be formed in Mexico to hold the joint venture interests and this company will be
owned 51% by Kings Minerals and 49% by Goldcorp (through their respective subsidiaries). Subject to
work programmes and budgets proposed in accordance with usual joint venture procedures, the parties
intend to fund their respective percentage interests in the next stage of exploration.
Yours sincerely,
KINGS MINERALS NL
Dudley R Leitch