Heap of faith in PNX’s Fountain Head plan
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Special Report: PNX Metals’ plan to develop a heap leach gold operation to monetise its rapidly growing gold resource base and help fund a larger mine development at its Hayes Creek zinc-gold-silver project in the Pine Creek region of the Northern Territory is starting to gather serious momentum.
PNX (ASX: PNX) has already defined a resource of 2.58 million tonnes at 1.7 grams of gold per tonne for 138,000 ounces at Fountain Head, one of three deposits that make up the Hayes Creek project and the proposed source of ore for the heap leach operation.
On Thursday the company announced that recent drilling at Fountain Head had returned several high-grade intercepts, confirming the continuity of gold mineralisation at depth and along strike, directly adjacent to the current resource envelope.
Among the best results were 3m at 25.94 g/t gold from a depth of 117m, 4m at 5.39 g/t from 82m and 3m at 5.25 g/t from 110m.
PNX managing director James Fox said that the success of the drilling program had provided justification to continue with exploration and confidence that further testing could result in significant resource growth.
The company is currently assessing heap leaching as a low cost, scalable option for generating early cashflow from Hayes Creek and expects to publish a rapid development strategy early next year.
“This could provide an opportunity to enhance the overall Hayes Creek economics and extend the project mine life,” Fox said.
Results from initial leaching testwork on ore samples from Fountain Head in early November returned excellent gold recoveries of 88.9 – 97.0%, along with low cyanide and lime consumption rates, indicating metallurgical performance in line with other global gold heap leach projects and providing further encouragement for the strategy.
PNX envisages cashflow from the heap leach operation helping to offset at least some of the cost of developing the Mt Bonnie and Iron Blow zinc and precious metals sulphide deposits at Hayes Creek, and generating funds to continue with regional exploration over its highly prospective exploration ground.
The next round of drilling at Fountain Head is expected to commence in December.
Shares in PNX gained 0.1c to 0.7c on Thursday, capitalising the company at around $17 million.