Drilling at La Mascotte Gold Project

Four phases of drilling at La Mascotte

Phase 1 – Confirmatory drilling

KalGold’s first drill program hit shallow oxide gold at La Mascotte where thick zones of near-surface oxide gold mineralisation were punctuated by higher grades. New results in BLRC210001 included:

• 18m at 1.23 g/t Au from 1m, including 2m at 4.95 g/t Au from 15m
• 10m at 1.29 g/t Au from 23m, including 1m at 8.19 g/t Au from 23m
• 10m at 1.16 g/t Au from 52m, including 1m at 6.5 g/t Au from 52m

Importantly, these results confirmed historic 1990s pre-JORC resource drill out results and provided confidence that the historic dataset had merit worthy of follow-up, prompting the second phase of drilling.

Phase 2 – Extension of outcropping and near-surface gold at La Mascotte

The Phase 2 RC drill program significantly extended the footprint of confirmed gold mineralisation at and around La Mascotte. A total of 12 strategically placed RC drill holes intercepted gold mineralisation. Near-surface oxidised gold mineralisation is common, and gold mineralisation was confirmed to outcrop and be open along strike and down dip.

These results, in conjunction with the third phase of drilling, increased the strike length of gold mineralisation to at least 700m, nearly triple the pre-JORC 1990s resource estimate with a 250m strike length. On the northern side of La Mascotte, intercepts included:

Gold mineralisation also continues to the south of La Mascotte with results showing broad zones containing higher grade intercepts, including:

Additionally, a limited number of shallow diamond drill holes were completed. The aim of this part of the program was to provide structural information regarding controls on the extent of mineralisation and was aimed at interpreted structures around the periphery of La Mascotte rather than the main mineralised zone. Valuable structural information was retrieved that included the association of particular alteration styles with mineralisation, and also confirmation that a particular generation of shallow, west-dipping quartz veins and associated alteration zones host gold mineralisation. Importantly, evidence was retrieved of a series of lineations possibly indicating a westerly to north-westerly plunge to mineralisation. This concept will be tested with planned RC drilling.

Phase 3 – further extension and new discoveries

The third phase of drilling confirmed the 700m strike length of La Mascotte through further extension of programs after Phase 2. The program confirmed a distinct north-northwest striking trend with gold mineralisation open in every direction.

Concepts learned from La Mascotte were applied to a number of targets generated in its vicinity. Several shallow discoveries are very promising and require follow-up, and may well represent satellite gold mineralisation to the La Mascotte gold system.

Phase 4

A total of four RC holes for 880m (BLRC220088, 89, 91 & 92) were drilled during the Phase 4 drill program at La Mascotte. The program was designed to test the down-plunge extent of gold mineralisation from historic high-grade mineralisation. The holes effectively provide a north-south fence of some 80m strike coverage across an area of the projected down plunge mineralised zone.

Results from the program showed that the host intermediate volcanics and volcaniclastics contain increasing disseminated sulphide (pyrite) content at depth in all holes, up to 5% by volume. This is commonly associated with silica-sericite-chlorite-K-feldspar ± magnetite alteration, typical of gold mineralisation throughout the Taurus and Bulong goldfields, as well as elsewhere throughout the Eastern Goldfields. Across the La Mascotte prospect, these zones typically correspond to broad sub-grade mineralised zones with strongly mineralised intercepts hosted within these envelopes.

Highlights of KalGold’s RC drilling results from the La Mascotte Phase 4 program include:

The northern two holes (BLRC220088-89) showed improved grades through target zones at drilled depths of greater than 160m. While intercepts were narrow at 1–2 g/t Au, they are hosted within broad, sub-grade mineralised zones that increases to the north. This is consistent with the observations regarding alteration detailed above and are an encouraging sign supporting a northwest plunge to the gold mineralisation.

The results of the new drilling have helped constrain mineralisation and refine target definition for extensions to La Mascotte.

• The Primary Plunge Target extends to the northwest. The results of this program suggest that this drilling has clipped its southern limits.
• The Secondary Plunge Target is south of the deep high-grade zone and defines a distinct trend within the deeper high-grade zone. High grade intercepts are open to the south, and this trend extends into an area undrilled due to deviations in historic drill hole traces and earlier-stage historic drilling of insufficient depth.
• The Depth Repeat Target is located directly below the shallow and the deep high-grade zones and assumes cyclical repetition of mineralisation continuing to depth.

Each of these targets are being assessed for future drill testing. This will, to a significant degree, likely be informed by the final outcomes of the JORC (2012) Resource Estimate results and constituent 3D modelling.