De Grey disappointed in Blue Moon, but still hopeful of a gold lode
De Grey Mining has dug up some disappointing results from its Blue Moon prospect as initial drilling only found narrow veins with minor alteration.
The shares closed down 8 per cent on Friday at 11.5c.
It said overall only three intercepts were made at the Pilbara site, of 4 metres at 0.17 grams per tonne (g/t) of gold, 4 metres at 0.14g/t and 4 metres at 0.11 g/t.
There has been a renaissance in the gold space in Western Australia ever since Canada’s Novo Resources and its Australian partner Artemis Resources began finding ‘watermelon seed’ sized nuggets at their Purdy’s Reward project in the Pilbara in July.
“De Grey, whilst disappointed with the initial results, remains confident the source of the numerous surface nuggets at Blue Moon and other zones will be discovered with ongoing programs,” the company told investors (ASX:DEG).
The drilling program started at Blue Moon during December, targeting the greatest concentration of reported nuggets by the tenement owner. De Grey drilled a total of 2000 metres across 24 holes, lying along a 1km strike discovered by the owners of the tenement in October.
“The drilling encountered only minor quartz veining with limited surrounding alteration,” the company said.
“Although this initial drilling campaign has not intersected the gold nugget source, the company remains confident the source is reasonably close due to the quantity, size and fragile nature of gold crystals associated with quartz veining at surface.
It believes the source is covered by a 1-5 metre veneer of sands and may be further along strike than where the nuggets were found.
Resampling drilling results from a program late last year at the Toweranna prospect indicate strong mineralisation further along strike and deeper than the existing 0.43 million tonne (Mt) at 2.9g/t gold for 40,700oz resource.