Pilbara gold explorer De Grey Mining (ASX: DEG) has gained more ground in the region after inking a binding option to acquire 70% of the Blue Moon tenement, which has given up more than 1500 ounces of gold to shallow prospecting in recent months.
Small scale and shallow prospecting at Blue Moon has produced 1500 ounces of gold, with De Grey Mining operations manager Andy Beckwith describing one specimen as the “richest and most spectacular gold veining and nuggets” he has seen in his entire career.
As well as the large quartz vein samples, gold nuggets have been recovered in soil and gravel.
Under the Blue Moon acquisition terms, De Grey Mining will pay the vendor A$125,000 in cash and 600,000 company shares. De Grey Mining will then fund exploration at the project over two years and may elect to acquire 70% of the tenement’s shallow mineral rights for $500,000.
De Grey Mining holds 1,800 square kilometres of tenements in the Pilbara region with numerous gold targets. In late September, the company reported a 20% increase to its total gold resources to 1.2 million ounces.
A scoping study into developing the tenements including accessing a 1 million tonne purpose-built processing plant has verified the project’s economic viability. Using the scoping study results, De Grey Mining will initially investigate gold targets within 50km trucking distance of the proposed plant to reduce costs.
Gold targets include a few different mineralisation styles including shear zone, stacked quartz vein and conglomerate.
Exploration over these targets will involve further evaluation of historical data, geological mapping, reverse circulation and diamond drilling, as well as metallurgical analysis.
Pilbara gold rush
De Grey Mining has been swept up in the gold rush that’s overtaken the Pilbara region in recent months.
The gold rush has focussed on the conglomerate-style gold that has been likened to the world-renowned Witwatersrand mineralisation in South Africa.
The South African Witwatersrand mineralisation has produced 1.5 billion ounces of gold and is believed the world’s largest deposit.
Less than a month ago, De Grey Mining reported it had discovered 91 gold nuggets at its Loudens Patch target in the Pilbara.
Since then, the company’s stock has shot up more than 238% from $0.06 in early September to $0.23 in mid-afternoon trade today.