Southwestern aims drills at Boka 7 as pre-feasibility study begins

Vancouver Now that a pre-feasibility study has been awarded to engineering firm Ausenco, Southwestern Resources (SWG-T) will turn its attention to delineation drilling at Boka 7, one of two advanced targets at the Boka gold project in China’s Yunnan Province.

The pre-feasibility study will be carried out concurrently with the drilling program at Boka 7, which has been previously tested with 11 holes irregularly spaced at roughly 200-metre intervals over a strike length of about 1 km.

Step-out drilling will also continue at Boka 1 (North and South), which hosts the bulk of existing resources at the gold project.

Boka 7 and Boka 1 (North and South) collectively host indicated resources totaling 10.4 million tonnes grading 2.88 grams gold per tonne, or just under 1 million oz. gold. The zones also host additional inferred resources of 45.8 million tonnes at 2.75 grams gold, or about 4 million contained oz., based on an 0.5-gram cutoff grade. High-grade gold values were cut to 31 grams.

Resources at Boka 7 are classed as inferred only, and stand at 14.5 million tonnes at 2.75 grams. Of the 11 holes drilled to date at Boka 7, ten intersected significant widths and grades of mineralization, suggesting good continuity. Highlights include: 107.3 metres of 2.4 grams; 89.2 metres of 3.1 grams; and 62.55 metres of 2.8 grams, which includes 9.6 metres of 31.6 grams gold.

Southwestern is aiming to develop a mine capable of producing at least 200,000 oz. gold annually at cash costs of about US$143 per oz. at Boka. A preliminary scoping study released earlier this year indicated that open-pit production could continue for at least 10 years, at an average strip ratio of 6.7 to 1 waste-to-ore, with potential for underground production thereafter.

The company expects to release upgraded resource estimates by the third quarter of this year. The pre-feasibility study is scheduled for completion by year-end 2006. The company notes that Ausenco has considerable experience in mine design and development in China.