Woulfe Mining (WOF.V) - drilling at Muguk

Comment by Objective Capital , Aug 31, 2011
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Woulfe Mining Corp, which continues to fast-track its flagship Sangdong tungsten-molybdenum project in South Korea, has turned its attention to exploration, evaluation and potential development of its Muguk gold project, also in South Korea.

In July, Woulfe commenced drilling one deep hole into the Three Brothers vein at Muguk. The test recently passed the 400-metre mark and is expected to encounter mineralisation at approximately 735 metres. The objective of the test is to confirm the down-dip extension of the mineralisation below the historic workings, and to substantiate the grades that were reported in the lower levels.

Woulfe contracted Melbourne-based AMC Consultants to prepare a three-dimensional model of Muguk. This work is now complete and AMC is currently updating the extensive database covering the deposit. This work will lead to the preparation of a NI 43-101-compliant mineral resource at Muguk.

Objective's view:

Although a formal mineral resource does not yet exist, historic information prepared in the mid-1990s shows Muguk to contain 1.42 million tonnes of mineralisation, averaging 13.5 grams of gold and 72.8 grams of silver per tonne, or approximately 615,000 ounces of gold and 3.3 million ounces of silver, based on a cut-off of 10 grams of gold per tonne. It must be noted that the historic Muguk mine operated for three years after that estimate had been prepared.

Nevertheless, the data show that Muguk has the potential for rapid development into a producing precious metals mine, should Woulfe continue to encounter deeper mineralisation at worthwhile grades. We would view the preparation of a NI 43-101-compliant mineral resource as an important next step in this regard, especially if buoyed by positive results during the deep drilling programme. In the interim, we continue to value Woulfe with a nominal credit for the Muguk project.