De Grey Mining’s emerging Mallina gold complex in the WA Pilbara, just southeast of Port Hedland, has just seen another significant upgrade in its indicated and inferred gold resources.
DeGrey told the ASX on Tuesday in its second reserves estimate, that the Hemi area at its Mallina gold project is now Australia’s largest undeveloped open pit gold deposit.
Investors liked the pugrade and sent the shares up more than 4.6% to $1.13.
De Grey said the Mallina gold project has a mineral resource estimated 251 million tonnes at 1.3 grams of gold to the tonne for 10.6 million ounces of gold.
Of that figure 5 million tonnes (5%) at 1.7 grams to the tonne are classed as measured, 153 million tonnes at 1.3 grams to the tonne are indicated (62%) and a further 93 million tonnes (36%) are inferred – also with a grade of 1.3 grams to the tonne.
The total resource at Mallina has increased from 9 million in the initial estimate issued in June, 2021, with the resource at the key Hemi discoveries rising 25% to 8.5 million ounces, up from 6.8 million ounces in 2021’s first estimate.
The Mallina figure includes a measured and indicated figure of 6.9 million ounces, with Hemi (the key discovery area so far) contributing 5.8 million ounces, up from 2.1 million last year.
Hemi is estimated to have 213 million tonnes of ore at 1.2 grams to the tonne gold, of which 62% are indicated (139 million tonnes at 1.2 grams to the tonne) the rest inferred (74 million tonnes at 1.1 grams to the tonne).
The Hemi gold deposit is located centrally within De Grey’s 1,500-kilometre Mallina Gold Project and immediately southwest of Port Hedland in the northern Pilbara region of Western Australia.
Hemi has a number of discrete deposits – the largest is Brolga with 2.4 million ounces. Diucon has 1.6 million, Falcon, 1.4 million, Crow with 1.2 million and Eagle and Aquila have an estimated 900,000 ounces each.
De Grey said the overall, increase in this report came from higher tyonnages at Diucon and Eagle deposits at Hemi. That saw Hemi’s indicated reserve rise to 5.8 million ounces from 3.8 million a year ago.
Another regional deposit, Toweranna has 524,100 ounces of gold.
Separate deposits at Wingina (500,000 ounces) and Withnell (1.6 million ounces) were not increased in the latest estimate from their 2021 figures.
In yesterday’s presentation, De Grey said “all deposits remain open with resource extensional drilling at depth and along strike underway.”
“Exploration drilling continues to test for discoveries within the Greater Hemi corridor and regional target areas with 10 rigs operating,“ the company said.
De Grey CEO Glenn Jardine said in Tuesday’s statement to the ASX:
“The MRE update at Hemi provides an improved platform for the upcoming PFS (Pre-Feasbility Study) and resultant Reserve and Production Target. The PFS, targeted for completion in the September Quarter 2022, aims to increase overall gold production, mine life and annual gold production rate relative to the October 2021 Scoping Study of 4.3Moz over 10 years.
“Project studies, including metallurgy, geotechnical, mining, environmental, infrastructure and hydrogeology have continued in parallel with the resource extension and definition drilling. These studies will be incorporated into the PFS. The increase in Indicated resources and completion of the PFS are expected to provide a strong basis for project development and financing.
“The Hemi footprint is approximately 3.5km east-west and 2.0km north-south. There is significant resource extension and discovery potential in areas adjacent to the existing footprint and at depth. Aircore and RC drilling is underway in the Greater Hemi area to test for, near surface mineralised intrusives The Company sees further growth to resources beyond the current 2022 MRE and upcoming PFS Production Target.”
De Grey Technical Director Andy Beckwith commented:
“The Reverse Cycle (RC) and diamond drilling over the last 12 months has delivered on three key aspects:
- Extending the open pit mining potential, particularly Diucon and Eagle
- Infill drilling to convert Inferred to Indicated Resources to approximately 370m depth.
- Geotechnical and metallurgy drilling to enable the PFS economic study to advance.
“The upgrade to 5.8Moz of Indicated Resources from the total of 8.5Moz since Hemi’s discovery in early 2020 now provides an increased baseline for the on-going PFS. Further resource upside is expected as drilling continues to show extensions at depth that have not been included in the resource update due to the April cutoff date.
“The exploration focus over the next 12 months and beyond will now pivot back to resource growth through along strike and down dip extensions at Hemi and the high priority untested targets within the Greater Hemi region and large regional tenement package.”