Commences Drilling at Mt Leyshon (2336G)

TIDMLRL

RNS Number : 2336G

Leyshon Resources Limited

27 June 2012

LEYSHON RESOURCES LIMITED

27 June 2012

COMMENCES DRILLING AT MT LEYSHON

Leyshon Resources Limited (AIM/ASX:LRL) ("the Company") is pleased to announce that it has commenced a drill and test work programme on a large stockpile of ball mill scats at its wholly owned Mt Leyshon Gold Project in Queensland.

The programme is designed to follow up a number of previous studies which have shown, that depending on the treatment route selected, between 100,000 and 175,000 ounces of gold can be recovered through the retreatment of the highly mineralized material.

The material was stockpiled at a time when gold prices averaged around US$300 per ounce and the most recent of the previous studies was based on a gold price of US$780 per ounce.

The current programme is expected to show that at current gold prices in excess of US$1,500 per ounce, retreatment of the stockpile will generate a strong operating surplus.

Mt Leyshon Gold Project

During the previous quarter management completed a detailed review of the project. It operated from 1987 to 2002 as an open pit gold mine producing over 2.5 million ounces

of gold and 2.3 million ounces of silver and paid over $300 million in dividends to its shareholders.

The site has been significantly rehabilitated. A Closure and Rehabilitation Plan was submitted during the quarter to the Department of Environment and Resource Management (DERM). Newmont is performing the rehabilitation on behalf of the Company.

Newmont is one of the Company's largest shareholders and has a world class reputation for social responsibility. It became the first gold company to be admitted to the Dow Jones Sustainability

World Index in 2007 and has remained there for the past four years.

The stockpile comprises approximately 12-15 million tonnes of highly mineralised ball mill scats. One option provided for in the closure plan is for the scats to be reprocessed. A study in 2007 concluded that treatment of the scats could produce approximately 100,000 ounces of gold and at a gold price of US$780

per ounce would generate an operating surplus of $25 million before capital.

Management has also conducted a review of the status of exploration of the 25 km2 mining licence at the time of the mine's closure in 2002. The results show that although extensive work was done there

was no follow up on some very interesting results due to the prevailing gold price of around

US$300 per ounce.

As a possible complement to the scats retreatment, management has identified and previously reported three targets based on previous results that are worthy of follow up and one potentially large untested

cross cutting structure.

The Company has received a number of approaches from parties wishing to further test these targets with a

view to developing additional economic resources at the project.

Management is mindful that any redevelopment will need take into account the Closure and Rehabilitation

Plan and the requirements of DERM.

Cash Reserves

The Company has approximately A$50.7 million in cash, and is due A$0.8 million in term deposit

interest for a total of A$51.5 million (GPB 33.0 million).

This is equivalent to A$ 21 cents per share (13.6 pence per share).

For further information please contact:

Leyshon Resources Limited

Paul Atherley - Managing Director

Tel: +86 137 1800 1914 patherley@leyshonresources.com

Seymour Pierce

Jonathan Wright (Nominated adviser)

Richard Redmayne (Corporate broking)

Tel: +44 (0)207 107 8000

Background

http://www.leyshonresources.com

Leyshon was on the ground in 2003 when China opened its mining sector to foreign investment. It hasbeen fully engaged in China since then and has its main operating office located in Beijing.

China's latest Five Year Plan emphasizes the planned urbanisation of a large number of Central China's rural population into second and third tier cities lifting the urbanization rate by 4% to 51.5% of

the overall population.

This will result in significant increases in infrastructure spending andpower consumption. The Company is planning to invest in high quality energy assets in China to meet this growing demand.

Managing Director Paul Atherley is an Executive Committee member of the China Britain Business Council and serves on a number of European Union Chamber Working Groups including Energy, Environment, Carbon and Government Affairs.

COMPETENT PERSON'S STATEMENT

Comments relating to the exploration results and targets have been compiled by Mr Henry Tebar who is a member of the Australian Institute of Geoscientists. Mr Tebar was engaged as Exploration Manager at Leyshon Resources Limited at the time of compilation of thiswork and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.'

Mr Tebar consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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