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Kula Gold Ltd (ASX:KGD) has seen its share price rise by 40% after it reported grades of nearly 18 grams per tonne of gold based on channel sampling of old dumps from the Mt Palmer gold mine in Western Australia.
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Grades of up to 17.9g/t were found – with an average grade of 1.7g/t across 146 samples – at the gold mine, which is now being progressed through a joint venture between Aurumin and Kula Gold. The latter is seeking to earn up to 80%.
Based on these results, Kula is pushing for detailed sampling to be rolled out across all old mine dumps, plus for volumes to be weighed to assess their gold content.
Considering the presence of exceptionally high grades but also variance across the samples, the company is looking at the possibility of nuggety gold, which would mean a simple production style involving low-cost extraction.
Managing director Ric Dawson said the strong price of gold was another factor making this result something to explore further.
“Channel sampling of old mine dumps on the property has shown very nice grades across 146 assays averaging 1.7g/t gold and up to 17.9g/t gold so we are moving this quickly to detailed sampling and extending the programme across all old mine dumps as well as surveying volumes and conducting metallurgical test work for potential low-cost gravity extraction,” he said.
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“With gold over US$3,000 per oz, we are looking to all early production options as well as drilling the multitude of high-grade gold targets on the Mt Palmer Gold Belt with the rig commencing drilling tomorrow.”
Kula Gold shares closed at 0.7 cents today after a strong 40% rise.
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