LONDON (ShareCast) - (Sharecast News) - Brazil-focussed gold mining and development company Serabi Gold updated the market on ongoing drilling from the Sao Chico project on Friday, where brownfield diamond drilling had further demonstrated the potential of extensions to the main mineralised corridor on the Julia lode.
The AIM-traded firm said the drilling had also shown the existence of a series of parallel mineralised structures that should be accessible using existing mine infrastructure.

It said surface drilling on the Julia Vein in zone 3 intersected "significant" shallow mineralisation including 4.3 metres at 8.52 grams of gold per tonne, including 0.8 metres at 31.08 grams per tonne, as well as 2.55 metres at 14.29 grams per tonne, including 0.5 metres at 66.70 grams per tonne, and 0.8 metres at 11.85 grams per tonne to 100 metres below surface.

Drilling on the Julia Vein in zone 4, meanwhile, intersected 0.6 metres at 3.46 grams of gold per tonne, indicating shallow mineralisation continued from zone 3 into zone 4, as a western extension of the shallow mineralisation across a dacite dyke intrusion.

Julia Vein underground drilling intersected 3.3 metres at 12.02 grams per tonne, indicating a potential deeper mineralised shoot developing below 200 metres vertical depth on Zone 3.

Remodelling and interpretation of historic data identified a parallel structure about 70 metres to the south of the Main Vein, containing several small but "very high-grade" shoots.

Named 'Gabi', recent underground drilling to confirm the vein target returned results including 0.55 metres at 18.24 grams of gold per tonne.

Drill testing of an induced polarisation geophysical anomaly 100 metres north of the Main Vein and adjacent to the decline ramp intersected 1.95 metres at 3.63 grams of gold per tonne, including 0.7 metres at 8.88 grams per tonne on the Lagoa Intermediate target.

"These recent drill results on the Julia Vein to the west of the mine, and the previously overlooked historical drilling into the Gabi Vein, to the south of the mine are very encouraging," said chief executive officer Mike Hodgson.

"These are satellites that are close to surface, therefore are easy to develop and require minimal capital development to access them.

"Our initial understanding of the Julia Vein was that the mineralisation had been truncated to the west by dacitic intrusions, and the vein was limited to what we called zones 1 and 2."

Hodgson said the company had now drilled to the west of the area, and found the continuation of the intrusive structures, with good vein widths and grades.

"All these intersections lie in the zone 3 block, immediately west of the current mine limit. Zone 3 is itself bounded to the west by another dacite dyke, but we have now intersected the further continuation of Julia west of this dyke and with further drilling hope to see a repetition of zone 3 in zone 4.

"Recent drilling has also led us to review some historic Sao Chico drilling results and core with encouraging results, notably the identification of the Gabi Vein."

Located 70 metres south of the Main Vein, Mike Hodgson said it was intersected with early Sao Chico drill holes that were targeting the Main Vein.

"As is often the case, the Gabi structure, being narrower and not the primary target, was overlooked at the time.

"Re-interpretation and a good deal of re-logging and sampling is building a very interesting and encouraging prospect that justifies further development of the Gabi Vein."

At 0824 BST, shares in Serabi Gold were up 0.02% at 62.01p.

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