Ora Banda Mining Limited (ASX: OBM) has announced a highly encouraging update on its Davyhurst Gold Project in WA.
The company reported that it has completed the Callion open pit Mineral Resource upgrade. Callion deposit is a key part of the Davyhurst project.
OBM announced that Callion Mineral Resource increased by 114% to 269 Kt @ 3.5 g/t Au for 30,000 oz Au. The company said that further resource growth is expected with work ongoing on underground resource model.
Ora Banda said that detailed open pit mine design for Callion is now in progress.
Davyhurst project
The Davyhurst project is located 120 km north-west of Kalgoorlie in Western Australia. The Davyhurst area contains both historical open cut and underground mining operation and hosts some of the largest deposits within the project area. Considerable potential remains for the discovery of new gold deposits as well as extensions to existing resources.
Significant deposits within the Davyhurst project include Golden Eagle, Lights of Israel, Makai shoot, Waihi, Callion, Federal Flag, Salmon Gums, Walhalla, Walhalla North, Mt Banjo, and Macedon.
Callion deposit
The Callion deposit is one of five priority mining targets at the Davyhurst Project and is located 13km south-west from the Davyhurst processing plant. Within the Callion local area the outcrop position of the Ida Fault is equivocal and best regarded as a corridor of related structures with an axis central to the Callion trend.
The deposit was mined underground by Western Mining Corporation between 1934-1959. Additional underground and open pit mining were undertaken by the Callion JV in the late 1980s, prior to a second round of open pit mining by Croesus in 2004-2005.
The existing Callion open pit is approximately 650m long and approximately 40m deep, with the underground workings extending off the southern end of the pit to a vertical depth of 220m below surface.
Total recorded historical production for the open pit is 135Kt @ 4.1g/t for 17.6koz, with the underground mine producing 146Kt @ 15.8g/t for 74Koz for total production of 280Kt @ 10.2 g/t for 91,650 ounces of contained gold.
Resource update
OBM had recently completed resource definition drilling, both extensional and infill, aimed to increase the geological understanding and provide additional drill support for a robust Mineral Resource Estimate (MRE). Following this, the resource update was done.
144% increase in Callion gold resources
Oro Banda announced that the upgraded Mineral Resource at the Callion Project has increased by 114% to 269 Kt @ 3.5 g/t for 30,000 ounces of contained gold up from 169 Kt @ 2.6 g/t Au for 14,000 ounces of contained gold.
This includes an Indicated Resource of 241 Kt at a substantially higher grade of 3.7 g/t Au for 28,700 ounces of contained gold.
OBM said that the Callion open pit Mineral Resource estimate was derived following additional drilling and the application of various constraints including modifying factors.
This includes a gold price of A$2,4001 per ounce, a lower block cut-off grade of 0.5 g/t Au and a physically constrained area within an optimum A$2,400 per ounce open pit shell that extends to a depth of 85 metres. The previous Mineral Resource Estimate (MRE) was undertaken in 2008 by Monarch Gold.
Underground MRE pending
Ora Banda said that the Callion underground Mineral Resource estimate currently remains under development.
The company noted that the updated Callion open pit Mineral Resource and the underground mineral resource under development follows the successful completion of a 66-drill hole program for 10,445 metres including 42 RC drill hole (5,773 metres) and 24 Diamond drill holes (4,672 metres).
Updates and next steps
The company announced that the detailed mine design work aimed at defining an open pit Mining Reserve is in progress.
OBM said that metallurgical and geotechnical studies are ongoing. The company reported that new metallurgical holes from Callion have been drilled and are currently being tested. Results are pending. Ora Banda said that new geotechnical holes at Callion have been drilled with results currently being reviewed by external geotechnical consultants.
OBM said that next steps would entail further data evaluation and geological assessment of drilling conducted at the Callion deposit, and geological and resource modelling targeting underground potential at Callion.
Management statements
Ora Banda Managing Director David Quinlivan said: “We were initially drawn to Callion due to its relatively high grades and impressive production history.
The Callion Mineral Resource is the final resource to be evaluated as part of the Company’s reserve definition program for the Definitive Feasibility Study (DFS) and delivery of this study remains on schedule.”