Mandalay Resources has unveiled drilling results from its Cerro Bayo silver-gold mine in Chile, which has shown additional mineralisation.

The company said some of the extensions found are expected to contribute to its year end resource update.

Mandalay drilled 22,777m of diamond core in 99 holes between January and August 2013.

The company’s geologists logged and sampled the diamond core in the project, which cost around $3m.

Mandalay CEO Brad Mills said infill and extention drilling at Cerro Bayo continues to delineate additional mineralisation along the veins the company is currently mining or plan to mine in the near future.

"In addition, we have begun drilling wide-spaced long horizontal holes from underground platforms to test the strike lengths (500m each) of Fabiola, Yasna, and Coyita veins under Laguna Verde," Mills said.

"Should these holes prove successful, we anticipate infill drilling and/or underground development to extend Mineral Resources on these veins during 2014."

Mills noted that the company’s new target drill testing has confirmed one target, the Carola vein, with potentially economic grades and widths.

"At the Antimonio and Esperanza targets, while initial drilling failed to generate intersections of both mineable grade and width, we have identified possible vectors toward potentially more prospective parts of the systems," Mills said.