News: Northern Star Resources in gold discovery near Kalgoorlie

Northern Star Resources Limited (ASX:NST) should trade higher after making another high-grade gold discovery at the Kundana Project on the outskirts of Kalgoorlie, Western Australia.

The first round of drilling at the Millennium target returned results of 15 metres at 6.2gpt, including 4 metres at 14.7gpt; 3.2 metres at 26.6gpt, and 3 metres at 11.2gpt.

Another two holes have intersected the prospective structure with one containing visible gold with assays pending. Further drilling with a surface diamond rig is underway both along strike to the North and down dip from current intersections.

These results are in line with historic drilling intercepts outside of the Centenary mine of 6.3 metres at 17.3gpt and 3.7 metres at 34gpt, amongst others.

The Millennium discovery was made just 200 metres from surface and is located adjacent to the dormant South/Centenary mine, which produced 309,000 ounces until production stopped in 1999.

Millennium has so far been defined over a 500 metre strike and remains open to the North and at depth.

It would be accessible from either the dormant Centenary mine or the North pit located on the opposite side, meaning the capital cost of any development would be reduced.

Millennium has many parallels with the company’s outstanding Pegasus deposit, which lies 3.5 kilometres to the South and also on the K2 structure at Kundana.

Pegasus, which hit first ore in development 3 weeks ago and is due to come into production by the middle of 2015, has a capital cost of $10 million and is expected to initially contribute 50,000 ounces to Northern Star’s annual production.

The low-cost nature of such a deposit is made even more attractive by the fact that this ground is 100 per cent-owned by Northern Star.

The discovery could also lead to further discoveries on Northern Star tenements.