Chile – Drill Results from District Exploration

Chile – Drill Results from District Exploration

Kingsgate Consolidated (ASX:KCN) (“Kingsgate” or the “Company) is pleased to provide an update on exploration activities at its 100% owned Nueva Esperanza Precious Metals Project in Chile.

(“Nueva”) Nueva is a feasibility stage development project with a resource base of approximately 1.9 million ounces gold equivalent¹. Kingsgate is moving forward with feasibility and permitting activities in 2017 and in parallel is pursuing a systematic exploration program covering the highly prospective 45km² alteration footprint (See Figure 1).

Two emerging exploration targets of interest are Huantajaya and Carachitas, both of which highlight the potential for gold discoveries outside the existing resource envelopes.

Huantajaya Target: This target is located approximately 600 metres southwest of the Chimberos Gold deposit (See Figure 2).

Three diamond drill holes totalling 525.5 metres were completed in January 2017 testing the depth projection of outcropping zones of mineralised breccias. All three holes intercepted the targeted silicified and oxidised breccia at depth with the following intercepts:

• Hole KDD-1 intercepted 24.0 metres grading 1.81 g/t Au and 86.24 g/t Ag or 3.25 g/tAuEq60² from 101 metres;
• Hole KDD-2 intercepted 11.0 metres grading 2.07 g/t Au and 57.03 g/t Ag or 3.02 g/tAuEq60 from 153 metres; and,
• Hole KDD-3 intercepted 3.0 metres grading 3.33 g/t Au and 31.48 g/t Ag or 3.85 g/tAuEq60 from 146 metres.

Carachitas Target: Carachitas is located approximately 2.3 kilometres southeast of the Arqueros deposit (See Figure 3). The target footprint was significantly expanded in late 2016 by the innovative property-wide bedrock Air-Blast drilling campaign (~800 holes property-wide) undertaken by Kingsgate. This campaign returned a highly anomalous bedrock sample of 8.83 g/t Au and 27.90 g/t Ag located some 450 metres west of earlier scout-drilling.

Ten shallow RC holes totalling 1,062.10 metres have now been completed between the anomalous Air-Blast sample and the earlier scout RC drilling. Results for the first, westernmost RC hole (KRC-23) have been received, and the highlights of which are noted below:

• Hole KRC-23 returned 10 metres grading 6.66 g/t Au and 31.81 g/t Ag or 7.13 g/tAuEq60 from 12 metres. (The interval is oxidised)

Carachitas was historically highlighted by limited RC scout-drilling in 2015, which returned an intercept of 38 metres grading 2.30 g/t Au and 22.0 g/t Ag (Hole ECCR-02) from a depth of 14 metres. (See ASX:KCN released titled “New Gold Discovery at Nueva Esperanza Project, Chile” dated 15 December 2015)

Results from the remaining nine RC holes are pending. Once all results have been received additional holes will be planned for the area.

General Exploration:

Kingsgate has planned for a budget of ~US$5 million for exploration at Nueva during 2017.

Since mid-2016, the experienced Chile exploration team has stepped back from the three defined deposits that are the foundation for feasibility and focused on broader property-wide exploration. All historical exploration data in Kingsgate’s possession has now been systematically compiled into one GIS database which is driving on-going drill-target generation.

The geological models being applied have evolved, with added exploration focus around the margins of large and barren dacitic flow-domes that occur in the district and elsewhere in the northern Maricunga. Exploration has now been prioritised around the peripheries of the numerous dacitic domes on the property, in particular in areas that present strong hydrothermal alteration and accompanying anomalous geochemistry.

Geophysical Survey: A combined IP/Resistivity survey was conducted in January 2017 over the core of the Nueva property. Approximately 40 line kilometres were surveyed along 9 east-west lines spaced at 500 metres.

The survey has highlighted a number of highly resistive features, consistent with silicic alteration, some of which remain untested by drilling to date.

Maricunga Generative Program: Strategically, Kingsgate is building its portfolio in Chile. Kingsgate has six licence areas under application located to the northeast of Nueva in the highly prospective Maricunga Belt, and has separate to Nueva, a regional prospecting programme that started in early January 2017.

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Greg Foulis

Chief Executive Officer
Kingsgate Consolidated Limited