Announcement

Quarterly Activities Report - December 2017

31 January 2018

Quarterly Activities Report

31 December 2017 – Key Points

  • Cash injection: $1.5 million received post quarter end (equivalent of 3c per share) after an agreement was secured with Westgold Resources Ltd on the underground development at Cannon Mine, Kalgoorlie, WA;
  • Cash flow to continue: the agreement with Westgold includes future cash payments based on gold production starting at $160/oz but potentially scaling to as high as $210/oz;
  • High grade gold and silver assays returned from underground channel samples and drilling on the Moonlight and Surprise Veins at Weolyu, South Korea, confirm the presence of a significant mineralised epithermal system.Cannon Gold Mine – Kalgoorlie, Western Australia
  • A new JORC Resource estimate was completed with total Indicated and Inferred Resource of 142kt @ 5.2g/t Au for 23.6koz gold (see pages 2-3).
  • An agreement with Westgold Resources Ltd on the development of the underground at Cannon was announced.Westgold has a 5 year right-to-mine within a defined area in exchange for the payment of $1.5 million cash and future production payments to Southern Gold.

Mine Development – Gubong, South Korea: Bluebird Merchant Ventures

  • Physical access to the Gubong mine has been achieved and preliminary assessment works have now commenced.
  • Preliminary analysis of historical data, including mine plans and drilling results, indicates Gubong is a significantly mineralised system at kilometer scale and open at depth in essentially all directions.

Exploration – Glandore, Western Australia

  • Best intercept of 7m @ 10.16g/t Au from 24m in RC drill hole GLAC015 with 88% of drill holes returning >1g/t Au at Doughnut Jimmy.

Exploration – Weolyu, South Korea

  • Best results of 0.92m @ 13.6g/t Au and 447 g/t Ag from drilling and 0.7m @ 17.7 g/t Au and 469 g/t Ag from underground channel sampling.
  • Significant lateral and depth extents remaining untested with high grade confirmed in Summit, Moonlight and Surprise vein systems.

Corporate

Cash position at quarter end was $3.1 million with the $1.5 million payment from Westgold taking the company’s pro-forma cash position to $4.6 million.


To read the full report please download the pdf document.