Special Report: De Grey Mining (ASX:DEG) continues to develop the resource at its Pilbara-based gold project – and the current deposit at Toweranna may only be the tip of the iceberg.

Most recently, the gold explorer’s efforts have been focused on its Toweranna deposit, where positive early results were the catalyst for additional drilling.

The company has now completed reverse circulation drilling down to 200 metres, after testing indicated that mineralisation extended to further depths. Results from the latest drilling program are due back later this month.

“We’re getting mineralisation all the way down to 200m, but that resource has the capacity to grow to an exploration target of 400,000+ ounces,” Technical director Andy Beckwith told Stockhead.

He expect results will establish a more robust data which could form the basis of a potential open-pit mine operation.

“Because it’s growing so rapidly, it will become one of our baseload pits,” he said.

De Grey is currently completing the pre-feasibillity 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.

“Game changer”

In addition, De Grey had some positive news for the market this week concerning its ore sorting test work.

The company showed it successfully separated the mineralised quartz veins from the barren granite at Toweranna.

Ore sorting on-site and only hauling the gold bearing quartz veins back to the processing plant potentially means big savings on haulage and processing costs. In addition, it should help improve the gold grade into the plant.

“With ore sorting you can also pick up all smaller quartz veins which don’t get put in the initial resource because they’re too narrow, so we expect it’ll actually give us extra ounces,” Beckwith explained.

The big one

While it looks like Toweranna will now form a much larger basis of De Grey’s resources in the Pilbara, there’s still a possibility that it may prove to be huge. As in, Lamaque/Sigma-level huge (the Quebec-based mine which produced nine million ounces).

“The Toweranna deposit is a different style of mineralisation that we’ve never seen in the Pilbara before,” Beckwith said.

“It’s a granite body, not a shear zone like all the other mineralisation.” That’s the same as Lamaque, or the world-class Wallaby gold deposit in Laverton, WA.

“When you look at the diagrams, they’re not that dissimilar, and our drilling program is only in its infancy.”

“Are we basically drilling the tip of the iceberg? At the very worst we’ve got a good-looking pit, and in time as we drill deeper, I believe we’ll be able to go underground as well. We’re getting the right grades,” Beckwith said.



This story was developed in collaboration with De Grey Mining, a Stockhead advertiser at the time of publishing.
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