Phoenix Gold has intercepted gold mineralization below the current Resource at its Castle Hill Project in Western Australia’s Goldfields, the state’s largest gold discovery since Tropicana in a maiden diamond drilling campaign.

Results indicate mineralization continues at depth and remains open in all directions, with new drilling expected to substantially increase the current Resource well beyond 1 million gold ounces.

Phoenix is well advanced on a Conceptual Mining Study, based on the existing Resource and including a standalone processing plant at Castle Hill which is scheduled for delivery in the December 2012 quarter along with a Resource update.

Highlights from the drilling program include 33 meters at 3.2 grams per tonne gold from 189 meters; 12 meters at 6.2 gram per tonne gold from 109 meters; 39 meters at 1.65 gram per tonne gold from 159 meters; 13 meters at 4.5 gram per tonne gold from 172 meters; 21 meters at 1.83 gram per tonne gold from 128 meters and 18 meters at 1.9 gram per tonne gold from 125 meters.

The current Castle Hill Resource stands at 21.71 million tonnes at 1.5 gram per tonne gold for just over 1 million ounces and only extends to a depth of 85 meters below surface. Significant results from the recent 13 hole, 3,167 meter diamond drilling program are over twice that depth.

Mr Jon Price MD of Phoenix Gold said that “Castle Hill continues to demonstrate its multimillion ounce potential and we are just starting to see that potential at depth with the first diamond drilling program. Not only have the results delivered significant mineralization well below the current Resource envelope, analysis of the drill core is confirming our geological understanding of the controls on mineralization.”

Mr Jon said that “We look forward to releasing a full geological summary of the Castle Hill project in coming weeks aimed at demonstrating how robust the project is and why we believe the project is emerging as the latest large scale gold system in the Western Australian Goldfields.”

Source - Proactive Investors

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