Well-funded (ASX: KGL) has launched an aggressive 20,000 metre diamond and reverse circulation drilling program at the wholly-owned Jervois Copper-Silver-Gold Project in the Northern Territory of Australia.



KGL is targeting a significant increase to the resource as part of the current Pre-Feasibility Study.



A Scoping Study completed in 2012 demonstrated that even a modest increase in the size of the resource and throughput significantly improved the project’s NPV and cash flow.



Jervois currently has Indicated and Inferred Resources of 13.5 million tonnes at 1.3% copper and 25.8g/t silver, for 170,415 tonnes copper and 11.6 million silver at a 0.5% copper cutoff.



There is also 69,000 gold ounces, 26,000 tonnes of lead and 22,000 tonnes of zinc.



The upcoming drilling program will also be more cost-effective for KGL, with another benefit the rapid turn-around in assays.



Simon Milroy, managing director, commented: “We are certainly seeing the benefit of operating during this downturn with increased availability and reduced cost of equipment and services.



"Where last year it could be 2 months before we would see any results from the lab this year the turnaround is likely to be 2 weeks.”



In addition to realising the exploration potential adjacent to the existing resource as identified by H&S Consulting in their most recent resource update the drilling program will also test a number of exploration targets within the Jervois tenements.





Analysis



KGL holds a very-strong cash position of around $11 million following the sale of the Andash project in Kyrgyzstan, and with the company trading at $0.096 this provides a market cap. of just $13 million.



Therefore the enterprise value of KGL is around just $2 million, with the company now leveraged to exploration success at Jervois - which already hosts Indicated and Inferred Resources.

With the onset of drilling, Proactive Investors would expect to see greater exploration newsflow and share price growth.

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