In a milestone announcement, De Grey Mining (ASX: DEG) said drilling had confirmed a resource of 2.2 million ounces of gold at its Mallina project 60km from Port Hedland in Western Australia.
This follows a day after the release of the latest results from drilling in November and December that the company said confirmed shallow extensions with new lodes being defined at Mallina.
The intersections reported yesterday included 5m at 4.1g/t, 4m at 4.8g/t, and 30m at 1.4g/t.
Meanwhile, today’s resource statement confirms a consistent average gold grade of 1.8 grams per tonne.
The Mallina resource now holds 1.1Moz in the measured and indicated category, and another 1.1Moz in the inferred category.
Of the total, 30% consists of oxide ore, 29% free milling ore, and 41% sulphide ore.
Overall ounces have increased 29% since the previous resource statement (1.7Moz) and the overall grade has not changed.
The Mallina project covers 1,200 sq km.
Recent discovery Hemi to be “game changer”
Technical director Andy Beckwith said it was pleasing that that the average grade had been maintained and that all deposits commence from surface, making them “readily” amenable to open pit mining, with mineralisation also remaining open.
The new Hemi discovery, not included in the new resource statement, was described as being a game changer.
“The thickness of mineralisation at Hemi is an order of magnitude larger than our existing deposits which provides an exciting opportunity to significantly to grow our resources,” Mr Beckwith said.
Once Hemi is included in the resource he expects a substantial increase in the project’s economics.
Hemi has become the primary focus for De Grey in 2020 and more results are expected to be released next week.
The Hemi discovery was first reported last December. Last month De Grey said the gold footprint at Hemi exceeded 340m of strike, 300m wide and 200m deep.
Another historic gold mine coming back to life
Mallina was the location of one of the early gold mines in Western Australia.
The Mallina Gold Mining Company, based in Glasgow, was floated in 1893 with a capital of £100,000. Its life was short-lived.
De Grey’s success at Mallina underlines one of the main trends affecting gold development now.
As new discoveries become harder to find, more and more historic mines and deposits are being evaluated for brownfield exploration and development.