Reconnaissance reverse circulation drilling of a previously undrilled geochemical anomaly returned 11m at 31.34 grams per tonne gold from 68m, using a 0.5gpt cut-off, including 4m at 80.05gpt, using a 40gpt cut-off.
The gold mineralisation is present as a zone of significant quartz veining with fine grained disseminated stibnite and pyrite.
The true widths, strike and dip of the intercept are not yet known and will require further drilling.
"To have a lengthy intercept of high-grade gold at the start of our first reconnaissance drill program at the Reedy Creek goldfield is very exciting for our seasoned technical team," Fosterville South chief operating officer Rex Motton said.
"As we see it, the Providence project has excellent potential for various high-grade gold deposits.
"Our results from drilling into recently developed geochemical anomalies at Reedy Creek is excellent early evidence of the potential of the Providence project."
The current drill program comprises 25 holes for about 2250m.
The project historically produced 39,233 ounces of gold at 26.9gpt gold but has not been subject to any modern exploration.
Fosterville South is active in Victoria and is also drilling its Golden Mountain, Lauriston and Beechworth projects.
The company, which listed in Toronto last year, is backed by Eric Sprott and Ross Beaty.
Shares in Fosterville South jumped 19% overnight in Toronto to C$1.13, valuing the company at $77 million.