TWO ZONES of surface mineralsation have been confirmed at Kula Gold’s Watou prospect following its completion of 1,379 metres of infill trenches.
The mineralisation found demonstrated strike continuity with associated ore grade gold assays, Kula said in its March quarterly report.
The company reported a third zone striking NS partially delineated in the south where indicative widths ranged from eight to 23 metres with attendant higher gold grades.
Kula said further trenching was required to confirm strike continuity of this latter quartz vein zone towards the north and south, with this work expected to be completed in the next quarter.
3D modelling of the 2014 Helimag data magnetic was completed for the Kulumadau resource area and identified a number of new targets for expansion of the known mineralisation, Kula said.
A surface mapping program has since commenced to improve the understanding of local structures and geology to improve target rankings.
Kula said it expects drill ready resource growth targets will be generated on completion of this work.
During the quarter, the company met with representatives from the PNG Treasury and the Mineral Resources Development Company to discuss the state equity agreement structure and the process of formalising the agreement, with an additional meeting held with Woodlark Island landowners.
As a result, the PNG Government agreed to acquire a five per cent participating interest in the project by payment of this proportion of the sunk costs incurred.
Kula said the PNG Government will also contribute 5% of future development costs and 5% interest will be given by the state of PNG to the mine lease landowners and Milne Bay Provincial Government.
Kula had about $1.48 million cash at bank as at 31 March 2015.