De Grey Mining delivers more high-grade gold in the Pilbara
Special report: De Grey Mining continues to prove that the high-grade gold opportunities are far from exhausted in the highly prospective Pilbara region of Western Australia.
The latest drilling has delivered high grades of between 5.13 grams per tonne (g/t) and 51.2g/t from two lodes below the proposed “Withnell” open pit at the Pilbara gold project.
Anything over 5g/t is considered high grade.
De Grey’s (ASX:DEG) share price rallied over 11 per cent to an intra-day high of 15c on the back of the news.
“Grade is King — and the Withnell underground lodes immediately beneath the proposed open pit are an important component of our near-term resource growth strategy,” technical director Andy Beckwith said.
“The scale of target and the significantly higher grade mineralisation has the potential to drive a significant step-change in the overall mining economics.”
The project, 60km south of Port Hedland in Western Australia, hosts over 200km of mineralised shear zones within the over 1500 sq km landholding.
In October, De Grey increased total gold resources to 1.4 million ounces on the back of an aggressive and highly successful exploration program. All deposits remain open.
And so far, only about 10 per cent of the shear zones have received detailed shallow reverse circulation and diamond drilling to depths of 100 to 150m.
De Grey is now planning to undertake step-out drilling in November to further test the 400m by 800m Withnell target.
The company has set itself an exploration goal of an additional 2.6 to 3.5 million tonnes at 4 to 6.5g/t for 330,000 to 720,000 ounces of gold.
The underground potential at the two largest gold deposits, Withnell and Wingina, is considered high in terms of additional tonnes, grade and resource ounces.
De Grey says the economic impact of a high-grade underground mine being added to the proposed open pit mining strategy is substantial in terms of potential for increased revenues, mine life and annual production rates.
The Pilbara project has a large pipeline of attractive targets and De Grey is ramping up exploration in its drive to expand the current resource.
The pipeline of targets includes over 40 identified and as yet untested soil anomalies along the highly prospective regional scale shear zones and the newly discovered conglomerate-gold style of mineralisation.
Conglomerate gold refers to nuggets hosted in rock containing rounded grey quartz pebbles and other minerals. The world’s most productive gold region, South Africa’s Witwatersrand Basin, is famous for its similar geological formation.
Conglomerate gold became a hot topic after Artemis Resources (ASX:ARV) and its Canadian partner Novo Resources uncovered what was described as “watermelon seed nuggets” south of Karratha at their Purdy’s Reward project mid-last year.
De Grey followed up Novo’s Purdy’s Reward discovery with its own nugget discoveries at Loudens Patch, Jarret Well and Steel Well.
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