De Grey Mining intercepts bonanza gold grades at Toweranna deposit

De Grey Mining ASX DEG Toweranna gold drilling results
De Grey Mining has hit bonanza gold grades at its Toweranna deposit in excess of 20g/t.

Pilbara explorer De Grey Mining (ASX: DEG) has intersected numerous strong gold zones which may help support a material resource extension at the company’s Toweranna deposit within its Pilbara gold project.

Emerging from a trading halt today, the company released a batch of new reverse circulation drilling results from Toweranna, with drilling targeting lateral and depth extensions to the existing shallow mineral resource.

The positive results include significant lateral extensions to the existing shallow resource and numerous new lodes at depth, between 100m and 200m below surface.

Encouragingly, many of the new lodes show individual veins with bonanza gold grades in excess of 20 grams per tonne gold, including 1m at 58.9g/t; 1m at 20.3g/t; 1m at 51.7g/t; 2m at 22.15g/t; and 1m at 22.9g/t.

Shallow high-grade gold intersections above 100m were 4m at 15.26g/t from 79m, including 1m at 58.9g/t; and 4m at 11.39g/t from 94m, including 2m at 22.15g/t.

The best bulk intersection was 136m at 2g/t gold from 94m, including 26m at 3.07g/t and 29m at 4.38g/t.

De Grey is confident the very high grades will provide added support for potential underground mining at the Toweranna deposit at depths beyond open pit mining.

De Grey technical director Andy Beckwith said the company was very pleased with the new drill results.

“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 similar style deposits elsewhere around the world validates the potential for large scale and multi-million-ounce resources.”

Resource extension

To date, 2,888m of the planned 5,400m resource extension drilling program has been completed.

Encouraged by the high-grade gold hits, De Grey said its next focus would be on the potential to extend resources from a 200m depth to 400m.

Currently, the existing shallow Toweranna resource stands at 2.01 million tonnes at 2.2g/t gold for 143,900oz.

De Grey said the existing resource occurred mostly along the western and southern portions of the granitoid plug and is constrained by the limit of drilling down to approximately 100m depth.

“These new drilling results further supports one of De Grey’s key priorities in seeking to significantly grow the Pilbara gold project resource inventory with the stated target of two million ounces by the end of 2019,” the company said.

In addition to completing RC drilling, Dey Grey is planning a diamond drill program to test and extend the mineralisation at Toweranna to to at least 400m.

The company’s Pilbara gold project is located only 75km from Port Hedland in Western Australia and covers 1,480sq km.

Shareholders applauded today’s news, with De Grey’s shares jumping 14.1% in afternoon trade to $0.105.

Filip is the founder of Small Caps and provides analysis on the global economy, geopolitical matters, commodities and equities. He also has many years experience as a professional share market investor and trader.