De Grey unleashes giant 6.8Moz gold resource for Hemi
De Grey has propelled its Hemi discovery straight into Tier 1 territory with the release of a maiden 6.8 million ounce gold resource for the deposit in WA’s Pilbara region.
Adding interest, 41% – or 2.8Moz – of the much-awaited resource is in the higher confidence indicated category, which has sufficient information on geology and grade continuity to support mine planning.
It also takes the global resources at De Grey Mining’s (ASX:DEG) Mallina gold project up from an already respectable 2.2Moz to 9Moz, of which 3.8Moz is in the measured and indicated categories.
That this giant resource was found at an average cost of $8.50/oz, well below the industry average of about $20/oz, in a short 15-month time frame just serves to highlight the magnitude of the company’s achievement.
There is also room for the already major deposit to get bigger as there is still plenty of potential to grow the Hemi and global Mallina resources along strike and at depth.
On top of all this potential, Hemi also features thick ore zones and high ounces per vertical metre ranging from 2,500oz/Vm at Aquila to 9,000oz/Vm – particularly in the shallow portions of each deposit – that greatly simplifies how they can be mined.
Technical director Andy Beckwith says Hemi is an exceptional discovery that is “redefining the gold potential of the Pilbara” while managing director Glenn Jardine noted that it has exceeded the company’s initial expectations.
“We are committed to increasing the resource base with ongoing drilling programs,” Jardine added.
“Project studies, including metallurgy, geotechnical, mining, environmental, infrastructure and hydrogeology are continuing in parallel with the exploration drilling.
“These studies aim to provide information to define the development and production opportunities this scale of resource brings.
“The company expects to be able to provide production potential for Hemi and the overall Mallina Gold Project to shareholders in the September quarter 2021 through the completion of a scoping study.”
Beckwith added that with 12 rigs currently focused on expanding Hemi as well as testing numerous targets within De Grey’s 150km long land package, he had no doubt that the company would be drilling and finding additional resources for many years to come.
The Hemi deposit is located in the central portion of the company’s Mallina gold project, which comprises a package of contiguous landholdings covering over 1,500sqkm about 60km south of Port Hedland.
Port Hedland’s position as Australia’s largest export port for iron ore also means the Mallina project is in close proximity to a large mining service industry and major infrastructure network, including major highways, international airport, power station and port facilities.
Hemi itself was first discovered in November 2019 and consists of the Brolga, Aquila, Crow, Falcon, Diucon and Eagle deposits.
The 6.8Moz resource estimate is based on 688 reverse circulation holes totalling 134,166m and 169 diamond holes totalling 69,061m, or a total of about 203,228m of drilling.
Its potential to grow is highlighted by the fact that drilling used for the resource estimate represents just about half of the over 400,000m of drilling that has been completed to date.
And the company is still drilling.
All six deposits remain open at depth and along strike with the extension and infill drilling aimed at further improving the Hemi resource.
Drilling over the next 12 months will also look to improve the company’s coverage of the Greater Hemi area for new discoveries.
This article was developed in collaboration with De Grey Mining, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.