De Grey Mining Limited (ASX: DEG) has announced a highly positive update from the drilling at its Mallina Gold Project in WA.
The company has reported a Total Mineral Resource of 37.44Mt @ 1.8g/t Au (2.2Moz) at Mallina project, which is inclusive of all drilling to 31 December 2019.
This includes M & I (49%) – 18.95Mt @ 1.7g/t Au (1.1Moz); Inferred (51%) – 18.49Mt @ 1.9g/t Au (1.1Moz); Oxide (30%) – 13.56Mt @ 1.5g/t Au (0.64Moz); Free Milling (29%) – 11.03Mt @ 1.8g/t Au (0.62Moz); and Sulphide (41%) – 12.83Mt @ 2.2g/t (Au) (0.90Moz).
De Grey said that there was a 29% increase in contained gold ounces compared to the July 2019 Total Gold Mineral Resource (JORC 2012), with a consistent average gold grade at 1.8g/t.
The company reported a 40% increase in Withnell Total resources to 7.49Mt @ 2.5g/t for 599,900oz, while the Withnell Underground resources increased by 9% to 2.50Mt @ 3.9g/t for 317,100oz.
DEG reported a 47% increase in Toweranna desposit, to 7.35Mt @ 2.2g/t for 524,100oz, while the Mallina prospect increased by 91% to 6.76Mt @ 1.4g/t for 307,400oz.
The company noted that the Hemi prospect is not included in this new resource upgrade and provides substantial resource upside.
Mallina gold project
De Grey’s Mallina Gold Project is located approx. 60km south of Port Hedland in the Mallina Province of Western Australia.
The project hosts numerous large deposits, of which significant gold deposits include Withnell, Mallina, and Toweranna. Other prospects include Hemi, Antwerp, and Scooby prospect.
Withnell is the largest gold resource at Mallina, and hosts a combined open pit and underground resource of gold. Hemi prospect comprises of the initial discovery Section A, as well as Section B, Section C, and Section D.
Resource upgrade at Mallina
The company has now announced a resource upgrade for Mallina. The resource upgrade includes the updated resource models for Withnell open pit, Withnell Underground, Toweranna open pit depth extensions and Toweranna underground, together with significant and shallow extensions to the Mallina resource.
The company said that the new resources are based on all drilling completed at each deposit up to the end of 31 December 2019.
DEG noted that the resources at Mt Berghaus, Wingina, Amanda, Camel, Roe, Dromedary, and Calvert remain unchanged and will be updated after further drilling is completed at each deposit.
Significant resource changes
DEG reported that significant resource changes occurred at Mallina project.
The company said that the overall ounces increased by 29%, while the overall grade remained unchanged @ 1.8g/t.
Withnell Open Pit and Underground models
The company reported that the Withnell Open Pit resource now comprises 4.99Mt @ 1.8g/t for 282,900 oz with 84% in the Measured and Indicated categories.
DEG said that the Withnell Underground model comprises 2.50Mt @ 3.9g/t for 317,062100oz. Mineralisation remains open and further drilling is expected to improve resource categories with most of these resources in the Inferred category, reflecting the exploratory drilling for extensions both along strike and at depth.
Toweranna Open Pit model
The company reported that the Toweranna Open Pit resource comprises 6.79Mt @ 2.1g/t for 459,600oz with 64% in the Indicated category. The open pit resource includes all new drilling to 31 December 2019 and extends from surface to 300m vertical depth.
The company said that the multiple stacked lodes remain open along strike and particularly at depth. Mineralisation is now shown to 600m vertical depth.
Toweranna Underground
DEG said that the Toweranna Underground resource (all Inferred) comprises 0.56Mt @ 3.6g/t for 64,500oz. The underground resource includes all new drilling to 31 December 2019 and has been reported below 220mRL (300m vertical)
Mallina Open Pit model
De Grey reported that the Mallina Open Pit resource comprises 6.76Mt @ 1.4g/t for 307,400 oz with 20% in the Indicated category. The open pit resource includes all new drilling to 31 December 2019 and extends from surface to 150m depth.
Exploration focus for 2019-2020
DEG reported that the drilling programs at Mallina and Withnell were completed in mid-December 2019. Thereafter the initial assay results from the discovery holes along the Scooby to Antwerp Trend were released.
The highlights included Hemi – 43m@ 3.7 g/t Au from 36m; and 25m @ 2.7 g/t from 32m; Scooby – 14m @ 3.5 g/t from 37m; and Antwerp – 6m @ 10.7 g/t from 4m; and 4m@ 21.7 g/t from 32m.
Updates and next steps
The Company said that on the recommencement of drilling in early 2020, it had immediately followed up with further aircore drilling at the Hemi prospect, with initial results demonstrating significant high grade and thick mineralisation, but is yet to follow up at either Scooby or Antwerp.
DEG reported that it is continuing to carry out RC and diamond drilling to scope out the extent of this major discovery and anticipates defining an initial Inferred Resource to 400m depth.
The Company said that it has two Diamond rigs and one RC rig on site and has offered staff extended rosters to assist the rigs to keep drilling as it continues to define this discovery.
DEG announced that additional drilling is currently being planned to further test the deposit for resource extensions and deeper targeting of the higher-grade gold zones. The company said that mining studies are also continuing to allow detailed evaluation of the deposits.
Management comments
Andy Beckwith, Technical Director of De Grey said: “We are very pleased to have achieved 2.2M ounces based on all drilling to the end of 2019. Importantly, we have maintained the high average grade of 1.8g/t, all deposits commence from surface making them readily amenable to open pit mining and all remain open.
Our new Hemi discovery is shaping up as a game changer and is not included in this resource statement. The thickness of mineralisation at Hemi is an order of magnitude larger than our existing deposits which provides an exciting opportunity to significantly grow our resources.
As we have repeatedly stated, our next corporate goal is to achieve +3M ounces and we strongly believe this will be eclipsed by the end 2020.
Substantial increases in the project economics are anticipated with the inclusion of the Hemi deposit. Accordingly, the economic studies will be updated once the scale and resources are defined at Hemi.
Ongoing feasibility activities including detailed metallurgical test work and long lead items such as environmental, infrastructure and water studies will continue during the Hemi resource drilling.
At Hemi, drilling is continuing with two diamond and one RC rig into the foreseeable future. The next Hemi results are scheduled for early next week.”