High grade intercepts buoys New Guinea Gold

Vancouver – Grade control drilling by New Guinea Gold (NGG-V, NGUGF-O) at its Sinivit project in East New Britain province, Papua New Guinea cut a number of shallow, high-grade gold intervals giving the aspiring precious metals producer a market lift.

A 59-hole reverse circulation drill program was conducted on the stripped Southern oxide pit area, along 6-metre spaced section lines, over about 100 metres of strike along the zone being prepared for open pit mining.

Drill results include hole SGC 0029 that intersected 18 metres of 22.6 grams gold per tonne including a 2-metre interval of 60.6 grams gold.

“These results are quite exciting and much higher than earlier resource definition drilling, commented company CEO Bob McNeil. New results represent the best drill results encountered at Sinivit and all are near surface. There appears to be several times the amount of gold present in the new holes than in the original resource drill holes.

New Guinea Gold expects to commence initial gold production from Sinivit by late-April. It will mine the oxide cap of the quartz telluride copper-gold system that hosts an indicated resource of 713,000 tonnes grading 5.7 grams gold plus a further 340,000 inferred tonnes at 3.2 grams gold.

The company is implementing a vat leach circuit at the operation and expects gold production to ramp-up to the 35,000 oz. per year level. Initial cash costs are estimated at around the US$120 per oz. level.

“The high-grade oxide gold mineralization confirmed by the drilling will be accessed during the start-up of open pit mining at the southern oxide zone, allowing early treatment of high-grade gold mineralization,” continued McNeil.

Although production will be limited from the small deposit, New Guinea Gold looks to define additional resource concurrent with its mining operation and notes mineralization is open to depth.

The company has all permits in place and has endeavoured to maintain good community relations. Support for mining in the area is reported as good, which bodes well for the junior avoiding the pitfalls other companies have faced in the past in other parts of the country.

New Guinea Gold has a 92% interest in Sinivit and holds interest in a number of other projects throughout Papua New Guinea.

In late-2006, New Guinea Gold and Vangold Resources (VAN-V, VNGRF-O) also tabled plans to reorganize the joint holdings of a number of its Papua New Guinea mineral projects into two new separate public companies allowing shareholders to better realize the value of the non-core assets. New Guinea Gold will retain its Sinivit, Imwauna-Normanby and Weioko-Sehulea projects.

Following the Sinivit high-grade drill results, shares of New Guinea Gold gained 17% closing up 8 at 56 apiece on very strong volume. The company posts a $61-million market capitalization based on its 109-million shares outstanding and has a 52-week trading range of 28-to-65.