TIDMKGLD
Kolar Gold Limited
30 May 2012
30 May 2012
Kolar Gold Ltd
Update Letter to Shareholders
Kolar Gold Limited (AIM: KGLD) ("Kolar Gold" or "the Company")
the Indian gold exploration and mine development company, is
pleased to provide an update letter to shareholders on its projects
in India and corporate developments to date.
AIM Code : KGLD Operational highlights:
At: 29 May 2012 * 8,000m of South Kolar drilling programme now
Shares in Issue: 100,1m completed;
Joined AIM: 17 June 2011
* Encouraging results encountered at two prospects with
Directors: historic resources, Mallappakonda ((61,527oz @
Harvinder Hungin, Non-Exe. 2.48g/t Au) and Chigargunta NE (13,182oz @ 15.1g/t
Chairman Au), validating and expanding known areas of
Nick Spencer, CEO mineralisation;
Richard Johnson, COO
Shiv Khemka, NED
Stephen Coe, NED * Modelling is under way in preparation for a resource
Stephen Oke, NED upgrade and follow up drilling programme;
Senior Management:
Chris Clowes, General * 40 line IP survey completed over South Kolar licence
Manager (GP13) area with large anomalies identified for drill
Charles Furness, CFO testing;
Shamim Ishaq, Chief Exe.
of Development
Phillip Dingle, Mining * Chigargunta Eastern lodes confirmed as being
& Technical Adviser northerly extensions to the lodes mined in the
historic Chigargunta Mine;
For further Information
please contact:
* Trenching and detailed mapping programme is in
Kolar Gold Limited progress in the South Kolar licence area;
Nick Spencer / Chris
Clowes
+617 3846 0211 * Extensive data generated at the South Kolar deposits
and prospects. Interpretation of integrated datasets
Nominated Adviser / Joint underway to provide a full 3D structural assessment
Broker: of the area, mineralisation control trends and the
Singer Capital Markets next round of drill targets.
Limited
James Maxwell / Jenny
Wyllie
+44 (0)20 3205 7500 Corporate highlights:
* The approval process for further licences in North
Joint Broker: and East Kolar is progressing and in final stages
Ocean Equities Limited with the Government;
Will Slack
+44 (0) 20 7786 4370
* Solid progress with the Government and recent
Public Relations: agreement in the Supreme Court to proceed with the
Tavistock Communications sale and revival of the BGML asset by tender process;
Edward Portman / Lydia
Eades
+44 (0)20 7920 3150 * The company continues to pursue consolidation of
additional quality gold projects and M&A
Investor Relations: opportunities in order to become the leading gold
Churchgate Partnters company in india;
Sumir Bhadwaj / John
Nelson
+44(0)207 193 3651 * Appointment of Singer Capital Markets as Nomad
adviser and joint broker;
* Cash deposits of GBP9.0m at the end of March 2012
Dear Shareholder,
Your company was admitted to AIM almost a year ago and over that
time significant progress has been made both operationally and in
respect of corporate activities. We want to ensure that
shareholders are fully aware of the large gold opportunity that is
unfolding in India, the progress being made on the ground, the
challenges facing us, as well as the considerable rewards that
management is striving to deliver for the Company.
Therefore, I am writing to you in the first of a proposed
bi-annual letter on progress at Kolar Gold with an aim to keep
shareholders informed of the Company's activities. In addition, we
wish to reiterate our near term milestones and value steps. I
encourage you also to visit our website.
Operational Activity
Your company has made good progress this year having mobilised
two rigs for drilling targets in the South Kolar block and
conducted 40 km of Induced Polarisation ("IP") surveying. Our
attention for the rest of this calendar year will be focussed on
the continued exploration over South Kolar PL (GP13), to upgrade
the resource at Mallappakonda and prioritise new drill targets for
the next 160 hole drill programme proposed at South Kolar.
Exploration work in the form of a two rig drill programme over
North Kolar PL (GP2) is expected to commence later this year as
soon as the pending license application is granted.
Drilling Programme at South Kolar Project (GP13)
Diamond drilling commenced in February 2011 in the South Kolar
Licence area and to date 8,000m of both Reverse Circulation (RC)
and diamond drilling has been completed on our target prospects.
Drilling has principally targeted known zones of mineralisation and
extensions of auriferous lodes previously mined at the Chigargunta
mine in the south and the Bisanatham mine in the north of the
licence area.
Drilling at NE Chigargunta, the Chigargunta Eastern lodes and
the Mallappakonda deposit has validated historical drilling results
and has provided valuable fresh geological data on the host rocks
and structural controls to mineralisation.
Highlight Results include:
North East Chigargunta:
-- KCN-02: 4.74m at 24.7g/t gold from 79.74m to 84.48m
-- KCN-05: 0.50m at 160.2 g/t gold from 117.14m to 118.89m
-- KCN-05: 3.65m at 4.6g/t gold from 20.54m to 24.19m (HW
lode)
-- KCN-05: 2.60m at 6.0g/t gold from 134.04m to 136.64m (FW
lode)
-- KCN-10: 1.00m at 12.1g/t gold from 45.65m to 46.65m
-- KCN-14: 1.10m at 16.4g/t gold from 45.29m to 46.39m
North Chigargunta Eastern Lodes:
-- KCE 01: 0.5m @ 4.90g/t from 41.55m & 1.0m @ 3.36g/t from
43.55m
-- KCE 02: 11.5m @ 1.21g/t from 82.84m incl. 1.5m @ 4.74g/t from
92.84m
-- KCE 06: 2.0m @ 3.04g/t from 14.3m and 3.0m @ 3.1g/t from
28.3m
Mallapakonda:
-- KMK 02: 21.5m @ 5.5g/t from 98m
-- KMK 03: 19m @ 2.7g/t from 121.5m
Induced Polarisation at South Kolar Project (GP13)
To assist identification of new priority targets at South Kolar,
we undertook 40 line km of detailed IP surveys in November 2011.
The IP survey confirmed the continuity of auriferous structures
previously mined at the Chigargunta and Old Bisanatham mines. A
number of significant anomalies also exist along the north-south
trend of the greenstone belt indicating a number of good target
areas for drilling.
Additional Exploration at South Kolar Project (GP13)
Over the last year, the Company has generated a large database
of information comprising ASTER imaging, close spaced ground
magnetics, IP surveys, mapping, RC and diamond drilling. This data
is presently being combined with further detailed mapping and soil
geochemistry and reinterpreted in order to assist identification of
larger structural anomalies and likely mineralisation trends.
We also propose to resource drill from underground at the
Mallapakonda deposit from two existing adits.
2012 Operational Plan
The operational plan for the remainder of 2012 is to:
- complete, integrate and re-interpret the detailed mapping and geophysics structural interpretation of South Kolar to determine location of new drill targets;
- commence new 160 drill hole programme at South Kolar PL (GP13);
- complete a resource upgrade at Mallappakonda;
- commence underground drilling at Mallappakonda deposit;
- secure North Kolar PL (GP2) and start work programme; and
- continue expansion of geological team.
Corporate Activity
Acquisition of Remaining Kolar Gold Projects
We continue to work closely with GMSI and SUN Mining to progress
the North and East Kolar tenement approvals which are in the final
stages with the Federal Government.
BGML Acquisition / Indian Mining Regime
The Company continues to make progress with the Government of
India and is encouraged with the recent agreement in the Supreme
Court to proceed with the sale and revival of the BGML mine by
tender process. We now await the court order to ratify this process
and the issue of the sale tender documents which have been drafted
by Ernst & Young as advisors to the government.
India Gold Consolidation
The Company continues to review and investigate quality gold
projects in India in order to build our position as a leading
Indian gold exploration and development company. The board believes
that acquiring significant resource ounces through sensible M&A
opportunities is an attractive strategic move to establish our
solid first mover advantage and increase valuation.
Funding / Fundraising Activity
As announced in our half yearly results in March, the Company
has GBP9.0mn cash deposits. The bulk of these funds have been
earmarked as consideration for the exercise of the options over the
remaining tenements (GBP4.7m) and undertaking the Group's
exploration activities (GBP3.2m) on these tenements during
2012.
Management Miletones for 2012
- Mallapakonda resource update, H1
- Results of detailed mapping of South Kolar, early H2
- Commencement of new drill programme at South Kolar PL (GP13), early H2
- BGML court order to proceed with tender, H2
- North Kolar PL (GP2) granted, H2
- Pursue acquisition of additional gold opportunities in India, H2
Management in London
Management plan to visit London again between June 18-21 to
update shareholders on corporate and operational developments. We
will also present at the Proactive Investor Forum in London on the
20th June.
An updated presentation will be put onto our website as of
tomorrow [31 May 2012] for your reference.
We hope this update has helped inform you on some of our
achievements to date and our immediate plans to realise the
significant gold opportunity that exists for us in India.
Best Regards,
Nicholas Spencer
Chief Executive Officer
Kolar Gold Limited
A copy of this letter is available on the Company's website at
www.kolargold.com.au
About Kolar Gold Limited:
Kolar Gold is an Indian gold exploration and development
company, listed on the AIM market (Ticker: KGLD) that has an
experienced international board and strong local partners.
KGL has rights to explore and develop one prospecting licence
and 13 further licence applications in the
Kolar Gold Belt, an 80 kilometre long Archaean
Greenstone Belt, in Southern India. The Kolar Gold Belt is one
of the most prospective underdeveloped
Archaean Greenstone Belts in the world and is regarded by the
Competent Person Mr Andrew J Vigar of Mining Associates Limited, as
comparable to the Archaean Greenstone Belts of South Africa, Canada
and Western Australia which have similar geology, structure and
style of mineralisation. This project area includes 32 known
mineralised prospects and covers 568 square kilometres in the
southern states of Andhra Pradesh, Karnataka and Tamil Nadu. KGL
commenced exploration on the first Prospecting Licence in South
Kolar in February 2011.
KGL is also jointly pursuing, with the mine employee unions, the
acquisition and revival of the neighbouring historic Kolar Gold
Fields which has produced 25 million ounces of gold at 15.9 grams
per tonne over 120 years until closure in 2001. The Federal cabinet
has approved the sale and revival of the mine and the case is
presently in the Supreme Court for approval.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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