De Grey Mining upgrades Pilbara gold resource, starts drilling White Quartz Hill

De Grey Mining ASX DEG upgrades Pilbara gold resource drilling White Quartz Hill Prospect
De Grey Mining has commenced a 1600m RC drilling program at the Farno McMahon JV tenement.

Gold explorer De Grey Mining (ASX: DEG) has announced a 15% upgrade to the total mineral resource of its flagship Pilbara gold project, located about 60km south of Port Hedland in Western Australia’s north.

The company today reported the resource now standing at 27.25 million tonnes grading at 1.6 grams per tonne of gold for 1.39 million ounces.

This new estimate been updated to JORC 2012 code and includes all drilling up to the end of July 2018.

It comprises a 44% increase in indicated resources to 491,800oz and a 25% rise in combined measured and indicated mineral resources to 739,200oz.

The updated gold deposits include Toweranna, which saw a 254% increase in overall mineral resources to 143,900oz, and Mt Berghaus, which was boosted by 29% to 181,000oz, as well as Mallina, Camel, Amanda and Roe.

According to De Grey, the overall net 25% increase in measured and indicated resources was a “highly positive outcome”, as it would provide for higher conversion of mineral resources to open pit ore reserves as part of the Pilbara project’s open pit pre-feasibility study, currently underway.

“Most importantly, the majority of the new resources, including increases in the measured and indicated categories, fall within the top 100m from surface,” the company stated.

According to De Grey, this points to the potential to improve mine life, scale and project economics.

Farno McMahon JV drilling

In a second announcement today, the company said a 1600m reverse circulation (RC) drilling program has begun on the Farno McMahon joint venture area, situated further south west of the Pilbara project.

De Grey has the option to earn a 75% stake in an exploration tenement held by Farno McMahon Pty Ltd (which was taken over by Toronto-listed Novo Resources two weeks ago) via $4 million of expenditure over four years.

This joint venture area contains two initial exploration targets – White Quartz Hill and Clarke.

De Grey today announced that a nine-hole/900m RC drilling campaign had commenced on the White Quartz Hill prospect, designed to test a large north-south trending series of outcropping quartz veins which been historic prospector activity.

A seven-hole/700m drilling program is expected to follow at the Clarke prospect, where previous sampling had defined a strong soil anomaly and significant high-grade rock chip assay results along the outcropping quartz veins, grading as high as 28.3 grams per tonne of gold.

Both drilling programs are expected to be completed within this month.

Geological mapping of various prospects has also been planned, De Grey reported.

Other Pilbara exploration

Meanwhile, the company has ongoing exploration programs in other areas of its Pilbara gold project.

Earlier this week, De Grey announced it has commenced conglomerate gold bulk sampling at Loudens Patch. The company plans to initially undertake trenching and detailed bulk sampling in the Louden West area, where previous metal detecting has discovered more than 200 nuggets.

The excavator is then expected to move to the Jarret Well and Steel Well prospects, where substantially thicker conglomerate units have been discovered.

The company is anticipating initial results from this program during October.

In addition, De Grey has confirmed high-grade intercepts from a recent infill diamond drilling program targeting underground lodes below the Withnell proposed open pit.

On Monday, the company reported drilling results from the first nine holes of the campaign. Highlights included a 4.85m intersection grading at 8.46g/t gold from 158m (including 0.35m at 70.4g/t gold from 159m) at the first lode, and 7.97m at 7.48g/t gold from 137m (including 2.5m at 14.52g/t gold from 138m) at the second lode.

De Grey is still awaiting assays for a further six diamond holes.

Shares in the company rose 3.13% to $0.165 following today’s announcements by midday trade.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.