Gold project adds lustre

The Katanning Gold Project's pace of development is set to accelerate after Ausgold Limited announced it was extending drilling and exploration at the site.

The program represents the first phase of Ausgold's exploration plan for the project, 40km east of Katanning.

The company has identified a number of high-priority targets through a data review and consolidation assisted by comprehensive geological modelling and estimation work, with the hope of increasing the mine's resource estimation to 600,000 ounces.

The announcement comes two months after a scoping study found the site had the potential to generate significant cash flow at a relatively low risk.

A spokesman said this exploration and resource development program was consistent with Ausgold's strategy of pursuing discovery and resource growth.

"Ausgold is fortunate to hold extensive geochemical, geophysical and geological datasets," he said.

"The recognition of regional structural controls on the location of mineralisation and the comprehensive data review that has taken place of the past months has identified the unlocked potential for new discoveries and resource growth at the KGP."

Priority targets will be assessed with geophysical interpretation, geological modelling, surface sampling and drilling.

Three-dimensional mineralisation modelling has identified opportunities that could add new ounces of gold in a short time with further drilling, particularly at the White Dam and Jackson sites.

The project was delayed in 2014 because of a disagreement on access and compensation between Ausgold and the landowner of the mining licence.

The mine is expected to be a boost to the Katanning community, with the potential to employ between 30 and 200 workers.