WESTGOLD RESOURCES LIMITED - ASX: WGR

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Description

Westgold Resources Limited (ASX: WGR) is an emerging Australian gold company focused on the Rover Project, 75km south-west of Tennant Creek in the Northern Territory, which includes the high-grade Rover 1 (Au-Cu) deposit, the Explorer 108 (Pb-Zn-Ag) deposit and numerous copper-gold targets.

The Company has recently established a 1Moz AuEq resource at the Rover 1 Prospect, with substantial drilling underway in 2010 to increase this resource. The Company has an extensive land package (13,000 km2) in this highly prospective and under explored region. Additional advanced prospects include, Explorer 108 (Lead-Zinc-Silver deposit) and Explorer 142 (Gold-Copper prospect) and numerous other untested geophysical targets. Westgold is the first in 25 years to obtain access to conduct exploration at these highly mineralised prospects.

In addition to its exploration projects, Westgold hold a significant stake (20.13%) in Aragon Resources Limited which has an extensive portfolio of gold, uranium and nickel tenements located in Western Australia, including the 2Moz Central Murchison Gold Project.

Rover Introduction

Westgold’s Rover Project represents a new mineral field containing typical high-grade iron oxide copper-gold (“IOCG”) and polymetallic base & precious metal styles of mineralisation. The field is south-west of Tennant Creek and considered to be either an extension or mirror of the nearby Tennant Creek gold field which has been a prolific producer from IOCG ore systems. The project represents a unique opportunity for the Company to control the vast majority of land within a new undeveloped mineral field. Westgold’s mining tenure (including applications) is in excess of 11,000 sq km which includes 3 advanced base metals and gold prospects and a large number of untested geophysical targets.

At the three advanced prospects significant high-grade mineralisation had previously been discovered in the 1970’s by drilling geophysical targets, namely Explorer 108 (Zn-Pb-Ag±Au-Cu), Explorer 142 (Cu-Au) and Rover 1 (Cu-Au). The Rover mineral field is one of the least-explored regions of Australia for Iron Oxide Copper Gold (IOCG) and Polymetallic base & precious metal deposits.

Rover 1 (Au-Cu) Deposit

Rover 1 is a major gold and copper rich ironstone system. The existing resource comprises 5.3Mt @ 6.3 g/t AuEqf or a total of 1Moz gold equivalent ounces with a high grade core of 2.4Mt @ 9.3 g/t AuEq for a total of 728,799 gold equivalent ounces was announced in February 2010.

The Rover 1 project was originally identified using an airborne aeromagnetic survey. The magnetic anomaly is an elongate bullseye feature with a long axis of approximately 900m. Previous drilling by Peko identified several high grade gold intercepts and variable copper, cobalt and bismuth mineralisation in the 1970’s but this was not followed up until Westgold obtained access to the prospect in December 2007.

Importantly, the Rover 1 deposit resembles many of the past and exceptional gold mines of the Tennant Creek Goldfield located to the immediate north. The Tennant Creek Goldfield ranks as one of Australia’s top gold mining regions and the mines are well known for their exceptional high grade nature (7-56 g/t Au) and association with extensive copper, cobalt and bismuth.

Explorer 142 (Cu-Au-Bi-Co) Prospects

The Explorer 142 prospect shows very strong similarities to Cu – Au mineralisation seen in many Tennant Creek orebodies, particularly the Warrego Mine. The Warrego Mine was the largest mine in Tennant Creek with over 1.5 million ounces of gold and 175,000 tonnes of copper produced. Historical drilling in the 1970’s intersected encouraging copper and gold mineralization in two holes approximately 120m apart and included the following results:

* 27m @ 1.22% Cu,
* 8m @ 3.99% Cu and 13m @ 0.91% Cu

The 2006 Westgold drilling initially aim to test continuity of mineralisation, thickness and grade between the two earlier intersections with the first hole NR142D001 intersecting:

* 20 m @ 3.1% Cu and 0.24 g/t Au

The best copper mineralisation is intimately associated with a zone of intense magnetite – chlorite alteration along the northern margin of the ironstone body. The second hole NR142D002 targeted the ironstone body approximately 50m vertically above the initial Westgold hole and encountered 19 m @ 0.54% Cu and 0.05 g/t Au, in a hematite dominated ironstone indicating that the tenor of the mineralisation is strongly controlled by the magnetite portions of the ironstone system. In late 2006, a hole targeted the magnetic ironstone body approximately 140m below the mineralised and magnetite dominant zone and intersected a strongly hematite rich zone with only weak sulphide development. The best intersection from this hole was 1m at 1.4% Cu and 0.2g/t Au. Company is planning to undertake a number of down hole geophysical surveys prior to further drilling in late 2007 or early 2008. The surveys will be used to identify major off hole magnetic targets.

Explorer 108 (Zn-Pb-Ag-Au-Cu) Prospects

At Explorer 108, results from the 2006 and 2007 drilling programmes provide strong evidence of a very large hydrothermal system with significant high-grade Zinc (“Zn”), Lead (“Pb”), Silver (“Ag”) ± Copper (“Cu”) and Gold (“Au”) mineralisation.

The results of recent drilling have defined an extensive area of polymetallic base and precious metal mineralisation to an area of at least 350 metres north-south by 200 metres east-west and remains open to the north and south but is partially closed off to the east and west by an un-mineralised felsic porphyry unit. The mineralisation is also still open at depth. The mineralisation is hosted in a 200 to 300 metre thick hydrothermal alteration zone consisting of brecciated carbonates (dolomite) and sheared acid volcanics. Zinc is generally the dominant metal through out the system, where the zinc to lead ratio averages 2 to 1.

The mineralisation consists of broad (100m+) intervals grading 2 to 5% combined Zn and Pb, but importantly contains a number of high-grade lenses containing grades of 7 to 15% combined Zn and Pb. The most significant of these high-grade lenses occurs at the contact of an upper dolomite sequence and the underlying acid volcanics. This basal dolomite contact reveals a shallow easterly dip and has been traced laterally over the northern two thirds of the known alteration system. The high-grade lenses typically are 30 to 60 metres thick with average grades of 7% - 10% combined Zn and Pb. Further, they generally contain a high-grade core of 5 to 20m thickness grading 12 to 15% combined Zn and Pb.

A second style of high-grade Zn + Pb mineralisation occurs below the high-grade lense at the base of the dolomite and within a sequence of sheared acid volcanic.. These volcanic hosted zones typically occur within steeply dipping shear zones which range in thickness from several metres up to 30 metres with average grades from 7% to 15% combined Zn and Pb.

In addition, copper mineralisation has been intersected in drilling above and below the zinc and lead mineralisation in a number of holes suggesting the Explorer 108 mineralisation may be part of a larger and zoned polymetallic ore system.

River Project Regional Exploration

In addition to the three advanced prospects the Rover Project tenure contains numerous untested geophysical targets which could represent additional IOCG or base metals prospects. As the regional tenure is granted these targets will be assessed using more detail geophysical methods and those with signatures similar to the known mineralisation will be progressively drill tested. The Company believes there is excellent potential within its tenure to discover additional high-grade mineralised prospects.

McArthur Project Area

The Joint Venture covers 14 tenements held by Westgold (100%), via its subsidiary company Castile Resources Pty Ltd. The project area is located in the southern portion of the McArthur Basin which hosts one of the world’s largest zinc-lead deposits, the McArthur River (Zinc-Lead) Mine. This “world class” deposit with stated mineral resources of 157 Mt @ 11.3% Zn, 4.9% Pb and 49 g/t Ag (from Xstrata Annual Report, 2006) is the scale of target MMG and Westgold seek to discover in this highly prospective but relatively poorly explored region.

Mine For

copper, gold, lead, zinc, silver, cobalt, bismuth

Location of operation(s)

Northern Territory

Australian Basins

McArthur

Address

Level 3, 123 Adelaide Terrace
EAST PERTH, WA, AUSTRALIA

Phone

(08) 9326 5700

Email

Website

http://www.westgold.com.au

Last Updated

2/5/2011