Golden era beckons for PNX at Hayes Creek
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Special Report: PNX Metals has indicated it could be producing gold from its Hayes Creek Project in the Northern Territory in just over 12 months as it swings focus onto proving up a heap leach operation based around the Fountain Head deposit.
PNX (ASX: PNX) has previously alluded to plans to develop a heap leach operation at Fountain Head to generate early cashflow and potentially enhance the overall economics of the Hayes Creek Project, which also comprises the Mount Bonnie and Iron Blow zinc-gold-silver deposits.
On Thursday the company made clear that it would be prioritising the heap leach strategy by accelerating studies and development plans. Meanwhile, the completion of the definitive feasibility study (DFS) into development of the zinc-gold-silver resources would be deferred.
“After careful and comprehensive consideration of all options, the Board has resolved to focus on establishing a gold heap leach operation at Fountain Head with the expectation it will provide valuable early cashflow and aid in the development of the broader Hayes Creek project,” PNX managing director James Fox said.
“The strategy makes sense given the strength of the Australian dollar gold price, and will position the company to make best use of its growing resource base.”
Subject to securing the necessary approvals and funding, Fox believed mining activities could start at Fountain Head late next year and PNX could be producing gold by the first half of 2021.
The company has started an 8000m reverse circulation and diamond drilling program at Fountain Head aimed at increasing geological confidence in the Fountain Head resource, which currently stands at 2.58 million tonnes grading 1.7 grams of gold per tonne for 138,000 ounces.
The program will focus on the western part of the deposit, where mining is expected to begin, and will also provide drill core for additional geotechnical and metallurgical testwork.
Sixteen RC holes were drilled at Fountain Head during the December quarter, with numerous mineralised intercepts confirming the continuity of high grade mineralisation at depth and along strike of the existing resource.
PNX, which finished the September quarter with $5.3 million in cash, said funds earmarked for the Hayes Creek DFS would be reallocated to accelerating activities at Fountain Head and that cash flow from the heap leach operation could ultimately fund completion of the DFS.
Fountain Head could also become a regional processing hub for mineral deposits in the Pine Creek region that are considered “stranded” due to their modest grades and distance from existing infrastructure.