Southwestern hits high grade at Boka 1 South

Vancouver — Southwestern Resources (SWG-T, SWGGF-O) says it is on track to deliver a prefeasibility study for its Boka gold project in southwestern China after releasing new drill results from the property.

These latest results are from three drill holes, which aim to expand the Boka 1 South deposit. Highlights include hole B07-234, which returned 15 grams gold per tonne over 30.4 metres.

The company said this intersection included a higher-grade zone of 6 metres grading 52.7 grams per tonne, but cautioned that true widths are not known at this time.

On Feb. 21, the day the drill results were released, Southwestern shares rose 83 to $8.03 on the Toronto Stock Exchange.

“We are excited to see continued expansion of the Boka 1 South gold deposit and especially the presence of high-grade material,” said Southwestern CEO John Paterson.

There are currently five diamond drill rigs operating at Boka 1 South, which, the company said, remains open to the north and southeast.

Covering 157 sq. km, the Boka project is a joint venture between Southwestern (90%) and Team 209 of the Yunnan Nuclear Industry of Yunnan Province, which retains a 10% carried interest.

An engineering report by Hatch of Mississauga, Ont., describes Boka as a significant gold discovery situated in a relatively accessible region of Yunnan province, about 110 km north of the provincial capital Kunming.

The topography in the immediate exploration area is rugged with deeply incised valleys and creeks, cutting across the general north-south trend of the mineralized zones that come close to outcropping along the scarp slope of the plateau, Hatch said in its report.

About four years ago, Southwestern recognized the property’s potential following an evaluation of shallow underground workings over a strike length of about 5 km.

The Boka 1 deposit is now estimated to host 31.2 million measured and indicated tonnes, grading 3.05 grams gold per tonne (just over 3 million contained oz.), a 215% increase over the mid-2005 estimate conducted by Hatch.

About one-third of that resource is in Boka 1 South.

Southwestern said the Boka project is in the prefeasibility stage and a draft of the prefeasibility study is on track for delivery to the company by the end of the second quarter.

According to Hatch, the terrain around the property will pose challenges for development of a surface mine and the location of the large infrastructure required to support a high-rate processing operation.

Capital costs for mine processing and associated site infrastructure can be expected to fall into the range of US$139 million to US$235 million for a 6,500 tonne-per-day operation, Hatch said in its report.

Separately, Southwestern is also exploring for precious metals on a 79-sq. km concession known as the Pacapausa project in southern Peru.

A 2,000-metre exploration drilling program recently got under way on the Pacapausa property, which is underlain by several northeast-southwest trending low sulphidation epithermal veins and breccia-stockwork zones.

Pacapausa is subject to an option agreement with Minera Oro Vega, a Peruvian subsidiary of International Minerals (imz-t), under which Oro Vega has the option to earn a 70% stake in the Pacapausa project.

To earn the interest, it must meet certain working commitments, complete a feasibility study, and finance the project to production.