Here’s another reason De Grey looks like it has a big, multi-million-ounce mine in the Pilbara
Special Report: More thick and high-grade gold hits at De Grey Mining’s Toweranna deposit further proves it likely has a very big, multi-million-ounce project on its hands.
The news was well received by investors, who pushed the company’s (ASX:DEG) share price up over 14 per cent to 10.5c on Monday morning.
The latest round of drilling has delivered a best bulk intersection of 136m at 2 grams per tonne (g/t), including 26m at 3.07g/t and 29m at 4.38g/t, from 94m.
It has also returned shallow high-grade hits of 4m at 15.26g/t, including 1m at 58.9g/t from 79m, above 100m as well as deeper high-grade intercepts of 29m at 4.38g/t, including 1m at 41.9g/t and 2m at 29.9g/t, from 201m.
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.
This is good news for De Grey’s as it targets 2 million ounces at its Pilbara project, which already has a hefty 1.4-million-ounce resource.
Technical director Andy Beckwith says the new drilling has revealed a new style of mineralisation that underpins several major gold mines around the world.
“Importantly, the new drilling shows Toweranna has multiple stacked lodes across the entire intrusion, strong mineralisation extending at depth and remains open,” he said.
“This is a new style of mineralisation for the Pilbara and when you consider similar style deposits elsewhere around the world validates the potential for large scale and multi-million-ounce resources.”
The new mineralisation is similar to Gold Fields’ 8-million-ounce Wallaby deposit, which produces over 250,000 ounces each year, and 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.
These large multi-million-ounce gold deposits tend to occur in clusters, providing longer term upside for the discovery of additional Toweranna-style targets within De Grey’s big landholding.
Numerous strong gold zones were intersected below and east of the existing resource model that are expected to support material resource extensions at Toweranna. The cross sections published today in DEG’s announcement provide more detail on this as well as the area where drilling will next recommence.
“The potential to extend resources from 200 to 400m depth will be our next focus,” Beckwith said.
“The bonanza high-grade nature of some of the individual veins is also particularly encouraging as it suggests selective or bulk underground mining methods may be possible.”
De Grey is assessing a number of other early stage exploration targets including to the south-west of Mt Berghaus.
The company’s Pilbara gold project, located 60km south of Port Hedland in Western Australia, hosts over 200km of mineralised shear zones within the its vast 1500 sq km landholding.