RED Mountain Mining last week started a stage 2 underground drilling program at the Zhongqu project in Gansu Province. The follows the stage 1 program which intersected significant gold mineralization including 31 metres @ 4.61 grams/tonne gold and 14.3 metres @ 4.50 grams/tonne. 1

The stage 2 program aims to provide Red Mountain with a better understanding of the orientation and tonnage potential of the high-grade structures at Zhongqu.

Results from the initial underground drilling confirm that the project is capable of hosting mine grade mineralization amenable to modern underground mining methods. ASX-listed Red Mountain, which has an agreement to acquire 51% of the project, drilled 17 holes for 2352 metres at the Xinqu operating gold mine, one of three main exploration targets areas within the project.

The best results are 31 metres from 95 metres @ 4.61 grams/tonne gold including 4 metres from 95 metres @ 9.51 grams/tonne and 8 metres from 118 metres @ 10.07 grams/tonne; 14.3 metres from 107.5 metres @ 4.50 grams/tonne including 6 metres from 107.5 metres @ 7.14 grams/tonne and 3 metres from 116 metres @ 6.27 grams/tonne; 8 metres from 48 metres @ 7.65 grams/tonne; and 4 metres from 22 metres @ 5.71 grams/tonne. Other results include 7 metres from 40 metres @ 5.7 grams/tonne, 6 metres from 37 metres @ 4.21 grams/tonne, 9 metres from 183.5 metres @ 5.59 grams/tonne and 4.5 metres from 120 metres @ 6.33 grams/tonne.

Drilling began from the deepest working 6 Level of the Xinqu mine which has been mining hematitic brecciated ore at or near a granodiorite‐limestone contact. Drilling encountered mineralization in 13 of 17 holes with intercepts encountering the same style of mineralization as seen in the Xinqu mine as well as another style of mineralization located in hematitic, often brecciated and carbonated, structures within the limestone unit.

Red Mountain’s chief executive officer Andrew Richards says, “We are encouraged by the width and tenor of the gold ore system as it confirms the project is capable of hosting mine grade mineralization amenable to modern mechanized underground mining methods. These results will contribute to the estimation of an initial resource model by Red Mountain Mining.

“The deepest intersection was approximately 200 metres vertically below the 6 Level and only 400 metres below surface. This is considered shallow by Australian standards and easily accessed by a decline.”

As part of its original due diligence process, Red Mountain also assayed the surface run of mine stockpile comprising about 40,000 tonnes of ore. Sampling across the surface averaged 8.58 grams/tonne from 30 composite samples.

www.redmm.com.au

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