Australian miner finds high grade gold in Batangas

MANILA, Philippines - Australian miner Red Mountain Mining Limited yesterday announced that a second high grade gold system was found within the Lobo gold prospect within the Batangas gold project it acquired from Mindoro Resources Limited.

In a statement, Red Mountain said the first hole of a planned 10-hole diamond drilling program at the West Drift epithermal lode structure at the Lobo prospect, has returned an intersection of 8.60 meters (m) at 2.53 grams per ton of gold (g/t Au) from 136.6m depth downhole including 0.85m at 5.59g/t Au and 1.0m at 4.62g/t Au.

The Lobo prospect, located west of the Archangel gold prospect, also includes the South West Breccia high grade resource.

The new intersection is from Hole LB66 and is part of an initial drilling program conducted by Red Mountain at West Drift to target high grade gold mineralization below the old Lobo copper mine.

“If successful this program has the potential to increase the known Lobo gold resources significantly as the West Drift target area is at least four times larger than the existing South West Breccia resource area immediately to its south,” said Red Mountain Executive Chairman and Acting CEO, Neil Warburton.

In late October, Mindoro Resources announced the completion of the sale of its 100 percent direct and indirect assets in its Batangas gold project (which includes the Lobo property) and its 75 percent direct and indirect interest in the Tapian San Francisco copper-gold project located in Surigao to Red Mountain Mining.

As consideration for the sale, Red Mountain has issued Mindoro with 100 million fully paid ordinary shares, with full voting rights, to be held in escrow for 12 months, together with 50 million performance shares.

The Red Mountain shares issued to Mindoro are valued at around A$10 million. Mindoro Resources now holds a 55.8 percent interest in Red Mountain on an undiluted basis.