Ausmex Mining Group (ASX: AMG) has struck bonanza gold while drilling at the Golden Mile target, which is part of the company’s 80%-owned Mt Freda Complex in Cloncurry, Queensland.
The company is currently fast-tracking a resource definition drilling program at the complex with six RC and diamond rigs on site.
Via the fast-tracked campaign, Ausmex hopes to firm up JORC resources over the Mt Freda Complex, including Even Star and Golden Mile targets.
Ausmex plans to develop a shallow, high-grade, bulk mining operation across these anomalies.
Highlight assays from phase two drilling at Ausmex were 7m at 10.5 grams per tonne gold from 23m, including 4m at 17.8g/t gold; 5m at 9g/t gold from 27m, including 2m at 21.7g/t gold; and 5m at 8g/t gold from 25m, including 12g/t gold.
The Golden Mile anomaly hosts eight historic gold mines over a combined strike length of 8km and across a 2km wide zone.
These mines have been dormant since 1939, with the Falcon mine producing at an average of 40.7g/t gold and Shamrock at 90g/t gold, according to Queensland Mines Department’s historic records.
Under the current program at Golden Mile, Ausmex will complete drilling at Shamrock, Falcon, Comstock and Mt Sheelite in the current quarter.
Ausmex is the first company to undertake modern exploration at the site since the historic mines ceased operating.
In addition to drilling Golden Mile, Ausmex hopes to take advantage of the prevailing high gold prices that are over A$2,000 per ounce and is drilling beneath the historic open cut pit at Mt Freda, with a view to restart mining at the pit.
The historic Mt Freda mine was operated between 1986 and 1989 and produced an average gold grade of 4g/t.
It was shut down when gold prices plunged to US$260/oz.
Round Oak Minerals Pty Ltd owns the remaining 20% interest in the project and under the joint venture, Ausmex has the option to process its ore from Golden Mile at Round Oak’s processing plant in Cloncurry.
In early morning trade, Ausmex’s share price lifted 17% to reach a high of $0.135, before shedding the gains and dropping to $0.107.