SOUTHERN GOLD LIMITED - ASX: SAU

The data on Australian Shares.com is intended as a guide only and is compiled from information in the public domain. Data on this website should not be used to make an investment or trading decision.

Description

Welcome to Southern Gold Limited, a gold focused resources business with advanced exploration assets within Australia and Cambodia. Southern Gold’s business is being built on the exploration and development of a substantial portfolio of gold and base metal projects in world-class mining provinces, in parallel with the generation and acquisition of new opportunities and resources projects.

Challenger Area Gold JV with Dominion

2006 to 2009 - Exploration Programs Have Earned 51% Gold Rights

In 2006 Southern Gold entered into the JV with Dominion Mining to “find the next Challenger” on Dominion’s exploration licences in the northwest Gawler Craton, South Australia. Challenger is currently one of Australia’ most profitable gold mines. By the end of October 2009 Southern Gold had spent over the $2 million threshold to have earned 51% of the gold rights on seven exploration licences that cover approximately 5000 km2. Exploration Activities completed include:

• 131 line kilometres of surface geophysical surveys
• 215 air core (AC) drillholes
• 44 reverse circulation (RC) drillholes
• 1 diamond cored drillhole, and
• over 2300 surface geochemical (calcrete) samples.

2009 RC AND DIAMOND DRILLING PROGRAM

• Tested Golf Bore on the Challenger Area JV project.
• 13 RC drillholes for 2026 metres drilled.
• A single diamond drillhole of 136.3 metres (47.65m RC pre-collar and 88.65m of NQ) was completed
• This program aimed at delineating and extending down plunge positions of gold mineralised shoots.
• Technical success in confirming the presence of gold in the interpreted down plunge components of the shoot positions. Significant intercepts were returned for several broad intervals. The higher order intercepts include:
• 33m at 1.10 g/t gold from 38m (including 9m at 2.26 g/t from 61m) in GBRC394
• 27m at 1.15 g/t gold from 89m (including 12m at 2.07 g/t from 98m) in GBRC395
• 17m at 1.00 g/t gold from 118m (including 4m at 2.06 g/t from 123m) in GBRC393
• 19m at 1.01 g/t gold from 47m (including 7m at 2.28 g/t from 52m) in GBRC393
• 18m at 1.39 g/t gold from 72m (including 11m at 2.05 g/t from 78m) in GBRC393
• 19m at 1.04 g/t gold from 112m (including 6m at 2.00 g/t from 117m) in GBRC387

Significant intercepts were returned for several broad intervals which had previously only been partially reported. Two significant intercepts were previously unknown (GB319) or grossly under sampled (GB308). These intercepts include:

• 20m at 1.88 g/t gold from 54m (including 3m at 9.64 g/t from 59m) in GB319
• 26m at 1.03 g/t gold from 44m (including 8m at 2.35 g/t from 52m) in GB308
• 9m at 1.39 g/t gold from 42m (including 1m at 10.05 g/t from 49m) in GB311
• 27m at 3.43 g/t gold from 71m (including 6m at 10.09 g/t from 87m) in GB311
• 39m at 2.35 g/t gold from 39m (including 7m at 11.15 g/t from 54m) in GB320

Golf Bore Gold Resource (Challenger Area)

The area generating the Golf Bore estimate covers about 1.1 kilometres of lateral strike with the 102,600 ounce Inferred Resource grading 1 gram per tonne (g/t) contained within about 3.2 million tonnes of mineralised material. The Resource is summarised in Table 1 below.

Golf Bore Gold Deposit Inferred Mineral Resource Estimate (0.5g/t Gold Cut-off)

Inferred Mineral Resource
Type Tonnes Gold Gold
T g/t Ounces
Oxide 806,000 1.2 31,300
Fresh 2,430,000 0.9 71,300
Total 3,236,000 1.0 102,600

Significant potential exists to increase the size of the Resource within the immediate area at Golf Bore as the deposit is open to the northeast and at depth down dip. However, the complex folded nature of the shear zones requires close-spaced drilling to best define the overall extent of each mineralised vein. The currently defined Resource at Golf Bore is expected to be insufficient to sustain a standalone mining operation, but may have economic potential in the future as a satellite deposit or as part of a larger operation if other mineable deposits are discovered in the vicinity. Resource Estimation Parameters are fully disclosed in the Southern Gold ASX release of the 24th February 2010.

Grenfell Goldfield Project - New South Wales

The wholly-held Grenfell project is seeking new gold resources near the historic hardrock mines that are now encroached by the Grenfell township. The primary targets are hardrock sources in the headwaters to alluvial leads that were mined to the southeast of the township for a significant amount of the historic Grenfell field production of 300,000 ounces of gold.

Remapping and reinterpretation of the mine data, regional stream sediment and aeromagnetic data has developed new targets and priorities within a revised structural framework. Reconnaissance geophysics and drilling located prospective altered volcanics with initial indications of gold mineralisation. Further work is planned to vector into the gold targets along extensive untested trends with soil geochemistry and shallow drilling.

Eurow-Vychan Project

Southern Gold Limited’s 100% owned Eurow project (within EL6653) covers a major intrusive and mineralization centre with substantial base metals and gold potential in the Parkes district of the Lachlan Fold Belt of New South Wales.

The recent drilling has extended the known massive sulphide mineralisation to a vertical depth of 240m. Drilling at the Eurow prospect has intercepted a stratabound zone of massive and vein-breccia sulphide mineralisation with >2% Cu over a strike distance of 280 m Sub-intervals of 0.4-1 m grade up to 10% Cu.

The Eurow project is centered on the historic Eurow-Vychan copper-gold mine that has depth and strike potential for a large sulphide system. Records indicate that approximately 50 tonnes of hand-picked ore (1899-1903) yielded on average 4.4 g/tonne Au, 81 g/tonne Ag and approximately 14% Cu (from enriched supergene ore). Underground mining was to a depth of 46m. Relatively shallow drilling around the mine area by previous workers intercepted sulphides and encouraging gold and base metal grades to a vertical depth of around 80 m.

Bulong Project

Southern Gold is continuing to focus on the rapidly developing picture of its Cannon gold discovery within the company’s Bulong South Project, centred approximately 30 km south east of Kalgoorlie in Western Australia.

Southern Gold’s drilling has already discovered gold at Monument, Pinner and Homerton prospects as well as nickel sulphides at the Euston Prospect, but the high grades of near surface gold mineralisation has led to the prioritising the understanding of the gold lodes at Cannon.

The Cannon Prospect is the first of several gold occurrences in the central mining lease (M25/333) and the greater Bulong South Project to be drill tested in detail. Southern Gold has conducted four RC drilling programs targeting the Cannon Prospect since the discovery of the George’s Reward – Cannon mineralisation in 2008. RC drilling from December 2009 at the Cannon Prospect has produced Southern Gold's best drill intersection of 15m at 9.55 grams per tonne gold from 138m drill depth in hole BSRC078. This intersection was a further 100m southwest along strike from the nearest prior intersection (BSRC010 43m @ 3.4g/t gold - a hole drilled in the tenement boundary area).

The last two campaigns from February and June 2010 have yielded excellent gold grades in both the near-surface lodes under the Cannon gold-in-soil anomaly and in the deeper lodes of Cannon-George’s Reward. Results from the fourth RC drilling campaign at the Cannon Prospect now confirm the prospect as a new gold discovery from surface. Extensional drilling traverses between the Cannon gold in soil anomaly and the Cannon – George’s Reward lodes have returned 26m @4.07 g/t gold from 82m, including 8m @7.04 g/t gold from 83 metres and 6m @6.39 g/t gold from 99m in BSRC108.

Approaching the Cannon – George’s Reward lodes drilling returned 16m @3.24 g/t gold from 83 metres including 9m @5.33 g/t gold from 86 metres in BSRC103, and 32m @2.14 g/t gold from 128 metres including 11m @4.09 g/t gold from 140m in BSRC104.

Interpretation of recently acquired 'SAM' geophysics data suggests that the gold mineralisation at Cannon lies within a larger southwesterly trending structure that connects to the Pinner Prospect and potentially further southwest to the Homerton and Monument Prospects. It is also interpreted that a cross-cutting set of northwesterly structures, that parallel the Monument trend, may improve the grades of the gold mineralisation along the southwest structure.

On the 24th March 2010 Northern Mining announced an "Inferred resource estimate 375,000 tonnes @ 1.89g/t au for 22,850 oz au. Mineralisation close to surface, open at depth and long strike." for Georges Reward. The Cannon Prospect is contiguous with Georges Reward.

Srae Pok Project (SAU 100%)

The Srae Pok EL straddles the boundary between the Mondul Kiri and Ratanak Kiri Provinces of eastern Cambodia and covers an area of 259 sq.km’s. The recently returned aeromagnetic images indicate a highly prospective geological setting for the Srae Pok EL. The geological setting, with large intrusive bodies, is very similar to that currently yielding significant Au and base metal anomalies on the Kratie South Project. The scale of the identified intrusive bodies and their hornfels halos provide an excellent target for significant primary IRG and low-sulphidation epithermal targets. In April 2009 Southern Gold collected approximately 1250 soil samples, giving the tenement its first ever soils exploration coverage. Low order gold anomalism was detected near the margin of the central granite and in the vicinity of existing small production artisinal mining.

Romdul Project (SAU 100%)

The Romdul EL covers an area of 180 sq. km’s, and is also located in the Kratie Province of Eastern Cambodia. The project consists of at least three dioritic bodies intruding into Khorat Basin Sediments, which in the Romdul EL are dominated by siltstones, with lesser sandstones and limestones recognised. Epithermal textures of some quartz, along with the presence of stibnite suggest some veins formed in the epithermal environment, highlighting the potential for high grade epithermal gold mineralisation. The epithermal environment and carbonates in the host stratigraphy also suggest the possibility of Carlin style carbonate replacement mineralisation.

SGC is using an Intrusive Related Gold (IRG) and base metals model for exploration. Therefore the intrusives and associated hornfels alteration halos are SGC primary target areas. The recent aeromagnetic survey has identified 2 previously unknown magnetic intrusive bodies within the Romdul EL. The 1st VD Aeromagnetic Image below clearly shows three magnetic intrusive bodies. These intrusives as well as small areas of artisanal workings were targeted with soil sampling programs totalling 2030 samples.

Anchor Prospect Status - March 2009

Anchor Prospect is located within an interpreted 10km x 10km cluster of dioritic intrusives prospective for intrusive related epithermal gold vein systems and polymetallic gold skarns. Gold mineralisation at Anchor Prospect and the nearby Snoul Prospect are associated with quartz/sulphide veins hosted in silicified metasediments and intrusive diorites. To follow on from encouraging trenching and RC drilling in the 2008/2009 dry season, extensive drilling and trenching is being conducted at Anchor during the 2009-2010 field season. Southern Gold has scheduled an exploration program comprising 2,300m of trenching and a total of 2,000m of core drilling at Anchor for the 2010 field season, including the just completed 714m Phase-1 campaign. This seasons results included a drill intersection of 1m @ 9.09 g/t gold and up to 307 g/t silver – in the first of seven new holes. The 24-hole Phase-2 drill schedule is expected to commence in April. Both drill phases are designed to target the source of significant gold trench and Reverse Circulation drilling intercepts previously detected at the Anchor Prospect.

Phnum Khnack

Phnum Khnack tenement is located immediately adjacent to the Snoul tenement. During the December 2009 quarter all of a planned 965 soil samples on the Snoul tenement were collected and the first 417 samples of a planned 1,122 soils were collected on the Phnum Khnach tenement. Soils sampling will be completed on the Phnum Khnach tenement commencing in February 2010.

KRATIE NORTH JOGMEC JOINT VENTURE

Exploration on three of Southern Gold’s seven tenements in Cambodia, is being fully funded by the Japanese Government-backed JOGMEC pursuant to a Joint Venture agreement whereby JOGMEC can fully fund exploration activity to a total of US$4.5 (~A$7) million over 3 years to earn a 51% interest in these tenements – Phnum Khtong (Kratie North Project), and two adjoining blocks, Preak Khlong and O’Kthung (Kratie South Project), all to the northeast of Phnom Penh.

KRATIE SOUTH PROJECT JOGMEC JOINT VENTURE

Exploration on three of Southern Gold’s seven tenements in Cambodia, is being fully funded by the Japanese Government-backed JOGMEC pursuant to a Joint Venture agreement whereby JOGMEC can fully fund exploration activity to a total of US$4.5 (~A$7) million over 3 years to earn a 51% interest in these tenements – Phnum Khtong (Kratie North Project), and two adjoining blocks, Preak Khlong and O’Kthung (Kratie South Project), all to the northeast of Phnom Penh.

Mine For

gold, copper, uranium, nickel, lead, silver, zinc

Location of operation(s)

Cambodia, Western Australia, New South Wales, South Australia

Address

47 Tynte St
NORTH ADELAIDE, SA, AUSTRALIA

Phone

08 8368 8888

Email

Website

http://www.southerngold.com.au

Last Updated

13/12/2011