NEWS RELEASE
6 July 2007 ASX: DIO
DIORO INCREASES RESOURCE BY 95% AT FROG’S LEG GOLD PROJECT
HIGHLIGHTS:
• Dioro confirms measured and indicated resource increases by 95% to 723,000 ounces of gold
• At midday today the portal development at Frog’s Leg commences.
• Drilling program continues at Frog’s Leg with an updated feasibility study expected for September
Dioro Exploration NL (“Dioro” or the “Company”), with joint venture partner La Mancha Resources Australia Pty Ltd (“La Mancha”), confirmed today that the Measured and Indicated (“M&I”) resource has increased by more than 95 per cent at the Frog’s Leg gold project, located near Kalgoorlie, in Western Australia.
After incorporating recent excellent drilling results the Frog’s Leg measured and indicated resource now stands at 723,000 ounces of gold, compared to 369,000 ounces of gold released to the market in March 2007. The total resource, including measured, indicated and inferred resources is now 933,000 ounces of gold.
The JV partners will commence portal development at the underground gold mine today after forming the view the Frog’s Leg deposit was economically robust enough to justify the recommencement of operations. It is anticipated the operation will be producing gold by early 2008.
The Frog’s Leg project is located 25km west of Kalgoorlie, in the eastern goldfields region of Western Australia, and represents the southern part of the six million ounce endowed Kundana gold field.
Dioro hold 49 per cent of the Frog’s Leg deposit, with the remaining 51 per cent held by La Mancha Resources Australia Pty Ltd, a subsidiary of La Mancha Resources Inc, a Toronto listed company.
Dioro Exploration Managing Director, Mr Rhod Grivas, said he was delighted at the significant resource upgrade at the Frog’s Leg gold project, which demonstrates the outstanding potential of the project.
“Both Dioro and La Mancha are very excited by the prospect of converting an excellent, robust resource into a very profitable underground mine, while at the same time continuing to grow the known resources at the project,” Mr Grivas said.
“Frog’s Leg is moving from being a very good project to a great mine.”
“We are very excited with the massive resource upgrade and are confident that the sharp increase in resource will have a significant impact on the profitability of the project”.
“The opening of the portal today at the project is also another significant milestone in our progress towards production at Frog’s Legs – and whilst mine development has commenced, we are continuing to get very encouraging results from our exploration program, which demonstrates the potential for further resource upgrades in the future.”
Tonnes
Grade
Ounces
Measured
972,000
7.1
222,000
Indicated
2,249,000
6.9
501,000
Total Measured & Indicated
3,221,000
7.0
723,000
Inferred
1,136,000
5.7
209,000
This increase in resources can essentially be attributed to two factors:
(a) the conversion of inferred resources to the M&I category due to the infill drilling that has taken place since October 2006; and
(b) the complete re-evaluation and interpretation of the Frog’s Leg Lodes during this same period.
This M&I resource primarily reflects the success of the continued drilling of the Frog’s Leg deposits since October, with the conversion of the large Inferred areas of the Fog and Mist ore bodies to the Indicated status. This drilling alone converted an additional 210,000oz in the northern extents of the Frog’s Leg Deposit. The drilling program comprised 20 holes, designed to give optimum coverage within previously sparsely drilled areas at the northern end of the Fog and Mist ore bodies.
In addition, a complete review of the geological information from all previous drilling has led to a new interpretation and modeling of the resource. The primary outcome of this systematic approach is the extension and widening of the three main ore bodies, “Mist” “Rocket” and “Fog”, as shown on the attached long section presented in appendix I. The new modeling approach, compared to the previous reported resource, now shows a decrease in the average grade and a large increase in the tonnes. The primary reason is that the modeled lodes reflect what will actually be extracted during mining. These lodes reflect the true geological mineralisation styles occurring at Frog’s Leg.
This updated resource calculation incorporates the results of all new holes completed between October 2006 and May 2007 that had not been included in the December 2006 calculation. Reported resource figures have been calculated using a Au cut off grade of 3.5g/t, consistent with the resource estimates reported from the previous resource update of December 2006.
NEXT STEPS
Significant results have been obtained since the beginning of the drilling program in October 2006 and drilling is now scheduled to continue for the rest of the year. The program for 2007 comprises 20,000m of diamond drilling at a forecast cost of approximately $5 million ($2.5 million attributable to Dioro). At the end of June, 24 holes had been completed for 10,500m at a cost of approximately $2.6M. Drilling planned for the remainder of the year will target the Rocket orebody and the area between Rocket and Mist.
The Frog’s Leg Feasibility Study is expected to be completed in September 2007. The previously completed positive pre-feasibility studies and the significant increase in resource observed since then, have justified the preliminary stages of portal development inaugurated this morning. The preliminary development work to be completed between now and September will not be impacted by the revised mine design but will avoid the delay of mine operations scheduled to start in the first half of 2008.
Editors Notes:
About Frog’s Legs
Dioro is a diversified minerals exploration company that has exposure to gold, uranium, nickel and copper through projects in located in Western Australia. The Company’s principal asset is the 49% interest in the Frog’s Leg project located 25km west of Kalgoorlie.
The company successfully opened the portal at the underground goldmine today which demonstrates the company’s progress towards gold production in early 2008.
The JV partners have recruited an experienced operations team and have purchased key underground mining equipment prior to completion of a bankable feasibility study, which will reduce the lead time for securing underground mining equipment to ensure that mining will proceed on time and budget. The JV partners have also acquired a second hand Altlas Copco M2D jumbo and are currently servicing and rebuilding the equipment.
Dioro has also acquired a 100% interest in a large gold and nickel package of tenements (Penfold Project) located adjacent to the Frog’s Leg project, between Kalgoorlie, Coolgardie and Kambalda. Gold exploration commenced late in 2006, with 14,575 metres of drilling completed.
Dioro also operates the Kunderong uranium project (741km²) which is pegged over 50km length of the Breshnahan unconformity that is prospective for unconformity style uranium mineralization, located near Newman in Western Australia.
QUALITY CONTROL
The drilling program was carried out by, and under the supervision of Martin Bennett Bsc. Hons. (Geol.), MSc. (ODG), M.AIG, Exploration Manager of La Mancha Australia. The program was conducted to industry best practice standards. Samples utilized for the resource update comprise half NQ2 diamond drill core sampled on a one-metre basis. No niche sampling took place. Samples were assayed at Genalysis Laboratories in Perth, using a 400g LeachWell cyanide leach, followed by solvent extraction and flame AAS.
The laboratory utilized a series of sample blanks, standards and check assays. In addition, La Mancha Australia routinely conducts check assaying programs utilizing alternative laboratories.
The Frog’s Leg geological re-interpretation was completed by La Mancha Australia staff, the block model, including the building of the wireframes for the model, resource estimation and classification was undertaken Trevor Eddie Bsc. (Geol.) MAusIMM, Chief Geologist, also of La Mancha Australia. The geostatistical work was carried out by David Williams Bsc.(Geol.) (Hons) MAusIMM Senior Resource Geologist of CSA Australia (a group of Geological and Management consultants). The updated resource review and estimation conform to the requirements of NI43-101 and the CIM Best Practices for Estimation of Mineral Resources and JORC Code.
ENDS
For further information please contact:
Rhod Grivas, Managing Director David Tasker/ John Williams
Dioro Exploration Professional Public Relations
Ph: +61 8 9389 8799 Ph: +61 8 9388 0944
The information in this report that relates to Mineral Resources is based on data provided by La Mancha Australia Pty Ltd and supervised by Mr Trevor Eddie MAusIMM an employee of La Mancha Australia Pty Ltd. Mr Eddie has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Eddie consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.