Intermin Resources Ltd (ASX:IRC) has intersected results including 40 metres at 1.06 g/t gold at the Peyes Farm prospect within the 100% owned Teal gold project near Kalgoorlie.

The results are significant as they will potentially form a key part of Intermin";s production pipeline beyond the Teal Stage 1 open pit gold mine which is nearing development.

Results were received from 58 holes out of the 73 hole program with remaining results expected in the next 3-4 weeks.

5,000 metres of follow up drilling is planned for September.

Jon Price, managing director, commented: 'We are only just starting to uncover the broader potential of our 100% owned tenure south of the Teal deposit and at depth.

'Teal Stage 1 will be a great start but I can see Intermin active in this area for many years to come as we unlock this potential.”


Drill result details

The program comprised 73 holes for 5,761 metres and included aircore and reverse circulation drilling.

Best results from the Peyes Farm prospect include:

- 40 metres at 1.06 g/t gold from 20 metres including 8 metres at 4.40 g/t gold;
- 20 metres at 1.10 g/t gold from 20 metres including 4 metres at 4.02 g/t gold;
- 4 metres at 3.35 g/t gold from 36 metres; and
- 4 metres at 5.25 g/t gold from 76 metres.

Results from the remaining 15 holes are expected in 3-4 weeks.


Background

Intermin has a number of quality gold assets in the world class gold mining region surrounding Kalgoorlie in Western Australia.

The company";s flagship projects are the 100% owned Menzies and Teal projects which host significant mineralisation and have the potential to be mined via open cut and underground methods.

The Teal Stage 1 open pit gold mine within the Teal project represents a near term opportunity for gold production.


Teal Stage 1

The recently completed feasibility study indicates Teal Stage 1 to be a technically strong and financially viable small open pit gold project capable of producing 17,723 ounces of gold over 9 months.

The project is forecast to generate $10.1 million of free cash flow and would have a low $4.5 million capital development cost.

Intermin recently executing a binding letter agreement for ore treatment with Paddington Gold Pty Ltd, a wholly-owned subsidiary of Norton Gold Fields Ltd.

The deal enables an accelerated mining schedule at a reduced capital cost for Teal Stage 1, which is located 12 kilometres from Kalgoorlie-Boulder in the goldfields of Western Australia.

The ore will be delivered by Norton";s haulage contractor at cost using their existing private haul road 2 kilometres to Teal";s east.

This avoids the building of a rail crossing and highway intersection that would be required to deliver ore to the other mills.

Capex savings will be circa $750,000, and with lower haulage costs, this improves the overall project economics.


Production pipeline potential

Intermin has identified a number of shallow oxide and primary mineralisation targets to build a production pipeline past Teal Stage 1.

Scoping study and feasibility work has commenced on a number of projects with the aim of continuous mining and cash flow.

This pipeline includes:

- Teal Stage 2 / Peyes Farm: Extension drilling completed and historic resource at Peyes Farm being followed up;
- Goongarrie: Resource update and mine optimisation underway;
- Pericles deposit (Menzies Gold Project): Current resource of 0.53 million tonnes at 2.49 g/t for 42,500 ounces of gold with open cut oxide followed by underground mining; and
- Teal deeps resource: Expansion drilling into the primary mineralisation at depth to commence in the December quarter.


Analysis

The drill results are encouraging as they lie 600 metres south along strike from the Teal gold mine with mineralisation open in all directions.

Both the Teal and Peyes Farm prospects are demonstrating significant potential for both oxide free milling ore beyond Teal Stage 1 and higher grade primary sulphide mineralisation at depth.

Mine optimisation and metallurgical studies on the sulphide hosted primary mineralisation at Teal have now commenced.

As the Teal gold project is located in the infrastructure rich area of Kalgoorlie, it has a number of ore processing options.

Intermin remains leveraged to exploration upside in the short term with drill results pending and a 5,000 metre follow-up program planned for September.

The stock is trading up 140% year to date ahead of a decision to mine Teal Stage 1 this quarter.

Intermin holds $2.7 million in cash, $3 million in liquid investments and no debt.

Directors and associates hold over 45% of the issued share capital.

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.