De Grey set for ‘substantial resource increase’ with more high grade gold at Toweranna
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Special Report: De Grey Mining(ASX:DEG) still hasn’t hit the end of the high-grade gold within its large patch of land in the Pilbara.
Recent drilling has delivered multiple new high-grade hits including up to 61.7 grams per tonne (g/t) at the Toweranna deposit.
The new results include 15m at 5.11g/t, 8m at 14.12g/t, 6m at 4.87g/t, 3m at 6.29g/t, 2m at 8.67g/t and 3m at 4.57g/t.
Drilling also delivered other significant intercepts of 8m at 16.37g/t from 228m, including 2m at 61.7g/t, as well as 11m at 5.21g/t from just 25m, including 2m at 18.55g/t.
Anything above 5g/t is generally considered high-grade, though at the current strong gold price even 2g/t has the potential to be very profitable for Aussie miners.
“The new drilling results clearly suggest a substantial resource increase can be expected,” technical director Andy Beckwith said.
“The stacked gold mineralisation has now been confirmed to extend throughout the entire 250m diameter granite body and to at least 200m depth and remains open at depth.”
Beckwith said the high-grade nature of the gold bearing quartz veins was especially encouraging.
“We expect the large volume of new assays that have been received will support a significant increase in the upper high-grade gold cut in the resource estimate, which may result in an increase in overall grade in addition to increased ounces,” he said.
“Importantly, many of the gold lodes remain open below the latest reverse circulation drilling and historical diamond drilling shows lodes occur to at least 425m depth.”
De Grey has now completed the most recent RC drilling program, having drilled 10,126m across 42 holes.
A resource update is expected to be released in the September quarter once the rest of the drilling results have been received.
The current deposit at Toweranna may only be the tip of the iceberg.
De Grey is currently completing the pre-feasibility study for the broader Pilbara project, and is aiming to prove up resources to 2 million ounces by the end of 2019 – the bulk of the new ounces may come from Toweranna.
“If we can get a 4-5-year mine life out of an open pit at Toweranna as a base load, that could make a huge change to the overall project economics,” Beckwith said.
Drilling at Toweranna previously revealed a new style of mineralisationfor the project similarto several major gold mines around the world.
One of those big mines is Gold Fields’ 8-million-ounce Wallaby deposit, which produces over 250,000 ounces each year, and another Dacian Gold’s (ASX:DCN) nearby 1.6-million-ounce Jupiter deposit, both in Western Australia.
This style of mineralisation also underpins the Lamaque and Sigma gold deposits in Quebec, Canada, which have both produced over 4.5 million ounces each.