Alliance Resources (ASX: AGS) has debuted a maiden resource for its 75.1%-owned Weednanna gold deposit at its Wilcherry project in South Australia.
The maiden resource now sits at 1.097 million tonnes at 5.1 grams per tonne gold for 181,000 ounces of the metal.
According to Alliance, the new resources poses “outstanding economic potential” for the project, with 83% of the estimate within 120m of surface.
“The delivery of a maiden mineral resource is a significant milestone for the company and confirms Weednanna as a quality gold deposit with outstanding economic potential,” Alliance managing director Steve Johnston said.
“This is the first step towards establishing the Wilcherry project area as an emerging gold producing district in South Australia,” Mr Johnston added.
The gold shoots contributing to the resource are open at depth or down plunge.
Additionally, Alliance believes there are zones within the top 100m of the mineral resource area that haven’t been drilled and could host new gold shoots based on historic drill data.
As well as calculating a resource, open pit optimisation studies were completed on the deposit and generated a combined mining and processing cost estimate of $34.50 per tonne.
The above pit shell contained gold resource is 78,000oz, with Alliance calculating the gold would sell for about $2,000/oz.
Wilcherry gold project
Tyranna Resources (ASX: TYX) holds the other 24.99% stake in the project which is about 40km north of Kimba and encompasses 1,200 square kilometres.
Alliance has been gradually upping its ownership in Wilcherry by sole funding exploration and spent $3 million during the 2018 financial year. During the 2019 financial year, Alliance plans to spend $3.2 million on exploration, which will boost its interest to 83.6%.
Recent drill results from Weednanna included 9m at 25.1g/t gold from 7m, with a 4m interval comprising 53.9g/t gold from 10m.
Other notable drill assays were 7m at 21.2g/t gold from 125m; 48m at 2g/t gold from 54m, with two higher grade intervals of 7m at 5.4g/t gold and 2m at 16g/t gold; and 49m at 6.3g/t gold from 45m.
The project also hosts about 25km of underexplored strike near Weednanna.
By midday, Alliance’s share price had rocketed more than 17% to reach $0.115.