African Barrick Gold locates high grades from extension drilling

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LONDON (ShareCast) - - High-grades located at depth at Reef 1 West
- Potential for major expansion of Bulyanhulu
- Positive initial results from Kenyan JVs

African Barrick Gold (LSE: ABG.L - news) provided encouraging news from its new drilling programme at its Bulyanhulu underground mine in Tanzania, with high grades found at depth.

Drilling at a possible western extension to its Reef 1 section of the mine showed high-grade intersections of between 8.4g and 11.7g per tonne at least 1,200 metres down.

ABG said these holes were "potentially significant" in demonstrating that reserve-grade gold mineralisation and average reef widths continued west of the mine, which it believed will open the potential for a significant expansion of the footprint of Bulyanhulu.

Surface drilling programmes began in the third-quarter 2013 at Bulyanhulu, which has proven and probable gold reserves of 10.6m ounces, in order to test the potential 400-1,200m Western extension of the Reef 1 gold system.

Tests involving a new plunge zone and plunge extensions of the Main Zone to vertical depths of 1.0-2.5km have also been carried out.

The FTSE 250 group plans 15,000 metres of further drilling in 2014 at Reef 1.

At the East Deeps section of Bulyanhulu underground drilling to establish an extension to Reef 2 has proved the continuity of gold mineralisation, but the company said it will need confirmation from the three further holes planned in the coming months.

ABG also provided an update at its West Kenya and Advance Gold (CDNX: AAX.V - news) joint ventures in Kenya that indicated positive initial results. Further drilling is planned for the current quarter to calculate potential drilling targets.

Broker Investec (LSE: INVP.L - news) said it thought these were "encouraging exploration results coming through from the company that should in time contribute to extending mine life at Bulyanhulu".

Shares in ABG were up 1.2% to 191.9p at 09:55 on Wednesday.

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