The results of the first phase of a drilling campaign at the Bauhinia Creek deposit at Aim-listed Shanta Gold’s New Luika gold mine (NLGM) in Tanzania, identify positive intersections below the existing reserves that indicate that the existing underground decline may be continued and mine life extended.

Moreover, high-grade mineralisation remains open at depth.

The drilling campaign was conducted during the second quarter of this year.

Bauhinia Creek is one of three active sources of ore currently being mined at NLGM.

The objective of the drilling programme at NLGM is to upgrade the mine’s mineral resources.

Results from the drilling are as follows: hole CSD115 intersected 7.33 m grading 6.24 g/t gold; hole CSD116 intersected 2.03 m grading 4.77 g/t gold; hole CSD117 intersected 3.68 m grading 6.57 g/t gold; and CSD115 is situated about 35 m to the east of the historical hole CSD055 which intersected 8 m grading 8.52 g/t gold.

The new intersections and the previous drill hole CSD055 are all outside the existing mineral reserves and demonstrate the potential for continued high-grade reserve and resource growth.

“A very modest and low-cost drilling programme has returned highly encouraging results that point to life-of-mine (LoM) extension at depth at Bauhinia Creek,” Shanta CEO Eric Zurrin commented in a statement on Tuesday.

He indicated that a mine life extension would require only minimal capital expenditure, limited predominantly to underground development to access new ore.

“Positive indications point to the existing underground decline being pushed down by at least three levels and new ounces added to our mine plan. I look forward to confirming our expectation after the results of the Phase 2 drilling.”

The Phase 2 drilling programme will start shortly, with three holes planned totalling about 400 m.

The results of Phases 1 and 2 will be combined and analysed, with an updated mineral resource estimate and LoM extension to be published in July.