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473,000oz A YEAR: Hemi emerges as one of the world’s largest potential new gold mines in landmark scoping study

Special Report: De Grey Mining is on track to deliver potentially Australia’s largest new gold mine since AngloGold’s Tropicana almost … Read More
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This article was originally published by Stockhead

De Grey Mining is on track to deliver potentially Australia’s largest new gold mine since AngloGold’s Tropicana almost a decade ago at its world class Hemi discovery in WA’s North West.

A scoping study on De Grey Mining’s (ASX:DEG) 9Moz Mallina gold project, which contains the intrusive Hemi gold deposit and its 6.8Moz resource, shows it would produce an incredible 473,000oz of gold a year for the first five years of operation and 427,000ozpa over its initial 10 year mine life for almost 4.3Moz.

The exciting thing is that this Study presents an initial evaluation of the Mallina Gold Project, with the Company having identified clear opportunities for improvement. The Production rate and mine life are expected to grow with continued resource definition and extensional exploration programs, with the Company pointing to recent announcements at Diucon and Eagle and ongoing exploration activities in Greater Hemi and Regionally.

Pic: De Grey Mining

In terms of scale that would place Mallina among the five largest gold mines in Australia, and make it one of the most impressive new gold operations anywhere in the world.

Mallina would be the third largest gold mine under development anywhere by production, and one of the least capital intensive over 200,000ozpa.

It would significantly outstrip the ~300,000ozpa run rate of its closest comparison in recent times, Gold Road Resources’ Gruyere discovery, which like Hemi opened up a new gold province in regional WA.

With those sorts of numbers in the foreground, De Grey has understandably pressed the button immediately on a pre-feasibility study to be delivered in the second half of 2022.

The study estimates that the mine and ~10Mtpa processing plant would cost around $893 million to develop, with De Grey potentially becoming one of Australia’s lowest cost gold miners, producing at all in sustaining costs of $1,111/oz over its first five years to approximately $1,224/oz over the life of the project.

The fact Hemi has been built from discovery into one of the world’s most promising new gold mines in such a short time is remarkable.

It has been a little over 18 months since De Grey, then a junior explorer, announced Hemi was emerging as a ‘major gold discovery’ in February last year.

It has since become a $1 billion company as it outlined a 192Mt @ 1.1g/t Au for 6.8Moz at Hemi amid a broader regional resource of 9Moz.

But feed grades would be higher, with the scoping study modelling the mine delivering 1.6g/t to a ~10Mtpa processing plant over its first five years and 1.4g/t over a 10-year period.

De Grey Mining
Pic: De Grey Mining

Financial metrics attractive to say the least

To illustrate the scale of opportunity sitting in De Grey’s hands, the initial project study estimates it to generate some $3.9 billion in pre-tax undiscounted free cashflow, or $2.9b when taxes are taken into account.

It has a modelled NPV before tax of $2.8b and post-tax of $2b, with an internal rate of return of 60% and 49%, respectively, underlining its Tier-1 status.

The initial outlay on developing the mine at Mallina would be paid back in just 1.8 years post tax, or 1.5 years pre-tax.

De Grey says these already impressive production rates and financial metrics will continue to be optimised with further resource growth and studies ahead of the mine’s development.

“The scoping study provides an initial evaluation of the project’s physical and financial metrics, following the discovery of Hemi in February 2020 and the definition of Hemi’s maiden Mineral Resource Estimate of 6.8 million ounces in June 2021,” De Grey managing director and CEO Glenn Jardine said.

“The results of the initial evaluation of the project are compelling and confirm its status as a Tier 1 gold asset.

“The company sees further improvements and optimisation of the project with ongoing resource extension and definition drilling and exploration success.

“This could increase production rates and/or the mine life of the project. For example, the production metrics for Diucon and Eagle incorporated into the study do not include the recently announced mineralised extensions along strike, in width and at depth.”

More upside to come

And there remains even more upside for De Grey at Hemi.

Around 78.1% of the resources used over the first five years in the scoping study are JORC indicated, with around 70.2% of the resources incorporated into its 10-year evaluation period are indicated.

Testwork shows around 93% recoveries based on conventional processing methods like comminution, flotation, oxidation via either pressure of oxidation, Albion or biological oxidation and carbon in leach.

That will be optimised in further studies – 800,000oz in the study pit shell also remains outside the scoping study’s 10-year evaluation period.

De Grey Mining
Pit designs for the Hemi orebodies. Pic: De Grey Mining

Around 90% of that resource remains inferred so more drilling will be completed to upgrade it ahead of the PFS, while resource extension drilling is ongoing at the growing Diucon and Eagle deposits as well as targets across the Greater Hemi package.

Jardine said the study outcomes justify the Mallina Gold project as commercially viable, committing to the PFS.

“The six existing zones at Hemi provide the company with the flexibility to sequence production according to gold grade, gold endowment per vertical metre, mining advance rate and the strip ratio of each zone,” he said.

“The Hemi deposits comprise approximately 80% of the production over the 10-year study evaluation period.

“Metallurgical testwork has demonstrated that consistently high gold recoveries can be achieved across the different zones at Hemi using the robust flowsheet developed during the study.

“Each of the three potential sulphide oxidation processes (pressure oxidation, biological oxidation and Albion) have delivered excellent gold recoveries and will be carried forward into future studies. Further testwork and trade-off studies will optimise capital cost, operating costs, recoveries and operability to enable the company to select the preferred sulphide oxidation route for the future operation.

“The study provides justification that the Mallina Gold Project is commercially viable and accordingly the board has approved progression of the project to a PFS.

“The PFS will immediately commence in parallel with ongoing resource extension and definition drilling, exploration activities and further metallurgical testwork. The results of the PFS are expected to be provided in the second half of calendar year 2022.”

 


 

 

This article was developed in collaboration with De Grey Mining, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post 473,000oz A YEAR: Hemi emerges as one of the world’s largest potential new gold mines in landmark scoping study appeared first on Stockhead.



Author: Special Report

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Lefroy Exploration secures major nickel frontier land package in WA

Special report: In line with its multi-commodity gold and base metals strategy, Lefroy Exploration has pegged five exploration licence applications ……

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In line with its multi-commodity gold and base metals strategy, Lefroy Exploration has pegged five exploration licence applications over a new nickel project named Glenayle.

The Glenayle Project covers a massive contiguous 2735sqkm of the Proterozoic age Salvation Basin that is intruded by multiple dolerite sills which extend over the entire land package.

These dolerite sills are part of the Warakurna Large Igneous Province (LIP), which extends west to the Bangemall Basin and east to include the Giles layered intrusive complex. More importantly, they are considered prospective for nickel mineralisation.

Glenayle represents a first mover approach by Lefroy (ASX:LEX) into a frontier nickel-copper exploration project with its stake over the Warakurna LIP.

New wholly owned subsidiary to list on ASX in 2022

The Glenayle tenement package is held by a new wholly owned LEX subsidiary, Johnston Lakes Nickel (JLN), which Lefroy aims to list on the ASX in 2022 subject to shareholder and regulatory approvals.

JLN will also hold other nickel assets currently held by LEX at Lake Johnston and at Carnilya South in the Lefroy Gold Project.

The company expects the tenements to be granted in Q4, 2022.

While the explorer aims to expand its portfolio in search for nickel, the focus remains on exploration at Eastern Lefroy and the Burns gold-copper prospect.

A rare opportunity

LEX managing director Wade Johnson said it is not often that an opportunity like this presents itself.

“It is a monster land package,” he said.

“We have taken the first mover approach into a new area that has seen very little exploration.

“We are very keen to further develop and apply knowledge learned about nickel mineralisation in large igneous provinces that will provide exploration targeting criteria for target selection,” he said.

“Glenayle adds another wholly owned project to the LEX greenfields exploration portfolio and complements our other nickel assets at Lake Johnston and Carnilya South.”

Lefroy Exploration
The Glenayle project relative to the other company projects and key geological rock units in Western Australia. Pic: Supplied

Identified in desktop assessment

The Glenayle nickel project was identified after a desktop assessment to identify new areas in Western Australia considered prospective for nickel mineralisation.

Prior geological knowledge of the area from a field reconnaissance trip in 1998 by Wade Johnson and the subsequent review of the research paper by Pirajno and Hoatson (2012) supported LEX’s acquisition.

What’s next?

Lefroy has kicked off compilation and assessment of previous surface geochemistry, geophysical and drilling data from WAMEX at Glenayle.

The location of drill core from the only three diamond holes drilled at Glenayle is being sourced, with two of the three holes being located.

Geophysics, and in particular interpretation of gravity survey data, will play a key role in guiding exploration targeting within the project.

Development of a detailed aeromagnetic and gravity dataset is underway and will be the primary exploration tool in the interpretation of the distribution of the mafic rocks such as feeder sills, layered intrusions and dykes within the Salvation Basin.

This will then be followed by targeted stratigraphic diamond drilling in 2023.

The company will apply for funding support through the WA State Governments Exploration Incentive Scheme (EIS) for this drilling where applicable.

LEX has also commenced land access negotiations with the determined Native Title group.

 


 

 

This article was developed in collaboration with Lefroy Exploration, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Lefroy Exploration secures major nickel frontier land package in WA appeared first on Stockhead.





Author: Special Report

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Silver Mines sets the stage for maiden underground silver resource at Bowdens

Special Report: Silver Mines’ aggressive drilling campaign at its Bowdens project in New South Wales has delivered more high-grade silver … Read More
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Silver Mines’ aggressive drilling campaign at its Bowdens project in New South Wales has delivered more high-grade silver hits, further building the case for a significant underground resource.  

Silver Mines’ (ASX:SVL) Bowdens project is already the largest undeveloped silver deposit in Australia, but continued high-grade results are providing strong evidence the mine will be more than just an open pit.

Four drill rigs are going full throttle as part of the expanded 30,000m drilling program, which has produced additional high-grade hits like 3m at an impressive 679 grams per tonne (g/t) silver equivalent from 306m, 6m at 382g/t silver equivalent and 14m at 264g/t silver equivalent from 322m from the Northwest and Aegean zones.

Drilling of the Bundarra Zone returned a notable intercept of 3m at 278g/t (44g/t silver, 3.18% zinc, 1.92% lead and  0.15g/t gold, from 255m.

Meanwhile, Southern pit extensions included 9.8m at 214g/t silver equivalent including 0.31g/t gold, from 39m; and 4m at 343g/t silver equivalent, with a higher grade 1.94g/t of gold, from 88m.

The Aegean to Northwest Zone is dominated by high-grade silver vein systems comprising substantial widths, while the Bundarra Zone is dominated by wide zinc, lead and gold bearing veins with appreciable silver.

“We are very pleased with these latest results; they confirm infill and extensions to these three new deposits which lie directly beneath the open-cut development plan,” Managing Director Anthony McClure told Stockhead.

“These results will feed into our maiden underground mineral resource which will be complete in the coming months.”

Silver Mines is in the final stages of development approval for a 2-million-tonne-per-annum open pit operation that would have an initial mine life of 16.5 years producing about 66 million ounces of silver, 130,000 tonnes of zinc and 95,000 tonnes of lead.

The drilling results so far have given Silver Mines the confidence to move forward not only with an initial underground resource at Bowdens, but also to concurrently move forward with a Scoping Study for a potential underground develoment.

The study will consider a couple of alternatives including the potential for underground development to start in years 3-4 of the open pit development to supplement plant feed with high-grade material at a rate of up to 500,000 tonnes per year.

Drilling below the open pit continues to extend the Northwest High-Grade Zone closer to the Aegean Zone, cementing Silver Mines’ belief these two zones are linked.

Silver Mines

The Northwest Zone starts about 30m below the base of the proposed open pit and so far, is up to 20m thick, extending over 450m and continuing down plunge for at least 300m. But it’s not closed off, meaning Silver Mines hasn’t yet hit the edges of this potentially very big system.

Drilling targeting resources beneath the current open pit reserve is expected to run through until at least the end of this year, while drilling to test for system extensions to the Bowdens deposit will continue into 2022.

 


 

 

This article was developed in collaboration with Silver Mines, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Silver Mines sets the stage for maiden underground silver resource at Bowdens appeared first on Stockhead.




Author: Special Report

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Resources Top 5: Investors pile into ASX stocks as global magnesium shortage bites

China is slashing magnesium production due to ongoing power crisis and buyers are getting desperate ASX magnesium stocks Korab, Latrobe … Read More
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  • China is slashing magnesium production due to ongoing power crisis and buyers are getting desperate
  • ASX magnesium stocks Korab, Latrobe and Magnotec soar in early trade
  • Emmerson hits visual copper in drilling, Aguia inks phosphate sales agreement

Here are the biggest small cap resources winners in early trade, Tuesday October 26.

 

KORAB RESOURCES (ASX:KOR)

(Up on no news)

There are only a handful of current or likely magnesium producers outside China, which is slashing production due to an ongoing power crisis. Buyers are getting desperate.

$20m market cap KOR is currently in a pause pending a further announcement after shooting up almost 100% in early trade.

This sleepy explorer has been trying to develop, or sell, the ‘Winchester’ magnesium project in the NT for over a decade.

Over the last few months, KOR says it has been approached by two separate groups expressing an interest in developing Winchester.

The latest unsolicited proposal would see the two parties “jointly develop the Winchester quarry where the other party will fully fund the development in exchange for sharing the future profits from the quarry”.

No commercial terms have been met as yet, KOR said September 30.


 

LATROBE MAGNESIUM (ASX:LMG)

(Up on no news)

LMG plans to develop a 3000tpa operation which will convert fly ash from the Yallourn coal operations in the Latrobe Valley into magnesium and a host of other industrial products.

Latrobe still has engineering and other studies to complete before issuing tenders for construction of its plant in January next year but managing director David Paterson said end users facing supply woes out of China were already desperate to get their hands on mag product.

“That’s why we keep on talking about diversity of supply,” he told Stockhead on September 30.

“We’ve had probably at least three or four inquiries a week, probably one a day.”

“We’ve had two today just on can we supply mag at a price, at any price, because they can’t get supply.”

 

MAGNOTEC (ASX:MGL)

(Up on no news)

China and Europe-based MGL isn’t a miner, but it does sell primary and recycled magnesium alloys into the auto, power tool and electronics sectors.

In the first six months of 2021 the metals businesses experienced a ‘difficult period”. The principal constraint on Magontec’s metals business in China is the absence of raw material supply, it says.

“Auto sector output was constrained, logistics costs rose sharply, magnesium prices were volatile and Magontec’s key magnesium alloy cast house at Golmud, Qinghai province, PRC continued to source its raw material from regional Pidgeon producers pending resumption of supply from the Qinghai Salt lake Magnesium Co Ltd (QSLM),” the company says.

“Until this supply re-commences the MAQ business will continue to be unprofitable at the EBITDA line and, with depreciation charged on this currently non-performing asset, will continue to negatively impact reported profit.”

MGL’s other metals businesses — recycling of magnesium alloy scrap in Germany and Romania — is also challenged.

“A slowdown in the automotive sector due to chip shortages, among other issues, has reduced volume throughput for the European recycling facilities over the last 12 months and we don’t expect a recovery in the short-term,” the company says.

 

EMMERSON RESOURCES (ASX:ERM)

A maiden drilling program pulled up visual copper at ‘Hermitage’, one of a cluster of targets held by ERM in the 5.5Moz gold, 470,000t copper Tennant Creek Mineral Field (TCMF).

Drill hole HERC002 and HERC003 intersected thick zones of malachite (copper ore) chalcopyrite (copper ore), interspersed with native copper.

Here’s what that looks like:

Native copper in RC drill hole HERC003.

HERC003 terminated in mineralisation at 192m, ERM says.

Drilling continues, and first assay results are expected in the current December quarter.

Hermitage has not seen any systematic, modern exploration since the 1980s.

The first phase of this exploration is aimed at following up historic hits like 9m at 12.8g/t gold from 176m and 23m at 4.84g/t gold and 3.7% copper from 203m.

$37m market cap ERM has been treading water, up 7% over the past month and down 6% year-to-date.

 

AGUIA RESOURCES (ASX:AGR)

This aspiring fertiliser miner has presold 30,000 tonnes per annum of natural phosphate fertiliser from the ‘Três Estradas’ Phosphate Project (TEPP) in Rio Grande do Sul, the southernmost state of Brazil.

The MOU — with well-known fertiliser and agribusiness distributor Tuch — potentially represents well over half of AGR’s projected first year of TEPP sales, estimated at 50,000 tonnes, the company said.

The sale price from AGR to Tuch is $74 per tonne FOB for the product in bulk. Operational expenditure has been estimated at just $11/t.

The project, which will cost just $8m to build, is expected to produce 306,000tpa over 18 years following a three-year ramp up, AGR added.


The post Resources Top 5: Investors pile into ASX stocks as global magnesium shortage bites appeared first on Stockhead.




Author: Reuben Adams

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