After all three maiden drill holes at its alluring Chile Gold project failed to get to their target depths due to technical failures, Perth based ASX listed explorer Emu N.L received a temporary setback.
The maiden drilling campaign ended early after local Chilean drilling contractors bogged the drill string in all three holes in the intensely clay altered breccias at the project that are soft enough to be cut with a knife.
Frustratingly for Emu, all three holes were lost well above target depth and finished in what is interpreted to be a “steam cap” that overlies a potentially mineralised system deeper down.
As a result, Emu shareholders will now have to wait a little longer to find an answer to the tantalizing question about exactly what might be lurking below that steam cap with a new drilling contractor now mobilised.
Emu’s decision however, to initially drill diamond core holes rather that RC holes appears to have provided a silver and possibly gold lining to the dark cloud that appeared over the project after the drilling failure.
The drill core confirmed what seasoned geophysicist and Emu M.D Greg Steemson instinctively knew – that the rocks at the project are the right host rocks to potentially accommodate a large, high sulphidation, epithermal gold/silver system. Importantly, the drill core appears to have confirmed that the surface geochemistry has a local source.
Emu’s Chile Gold project sits within the Maricunga mineralised belt in Chile that is home to a number of world class players including Barrick, Anglo America, Goldcorp, Teck and Lumina. The area is headlined by the Salares Norte project, a 3.3 million ounce gold and 42.1 million ounce silver discovery and Alturas, a 5.5 million ounce gold discovery made in 2015 by Barrick.
Goldfields’ Salares Norte project boasts an inferred mineral resource of 23.3 Mt @ 4.2 g/t gold & 44 g/t silver, for 3.1 Moz of gold & 34 Moz of silver.
Barrick’s Alturas project previously reported some spectacular intercepts including a 170m drill hit going 2.76 grams per tonne gold.
The Maricunga gold belt is thought to have a total mineral endowment of some 90m ounces of gold equivalent.
Prior to the launch of the three-hole drilling campaign, the Perth-listed junior explorer’s interest was aroused by a solid set of rock chip samples and some very interesting looking geochemistry at the project.
Remarkably, the company was able to pick up detectable gold and silver traces in every one of 235 surface samples at the project across a geochemical anomaly that measures greater than 4km long by 2km wide. Some rock chip samples were approaching 33 grams per tonne gold.
Emu holds a total of 6,900 hectares of mineral exploration concessions under option in Chile across two project areas -Vidalita and Jotahues, 120km east of the city of Copiapo.
Interestingly Emu management say they have discovered an extensive geophysical anomaly in Chile that is exactly coincident with surface geochemistry results, providing further tantalising evidence that Emu might be onto something.
Mr Steemson said, “A distinct and extensive geophysical anomaly extends over 2.4km, which has not yet been tested in drilling, but the hypothesis is that it could be a large alteration system under a cap. The initial test drill program did not extend deep enough.”
“Evidence of a high-sulphidation epithermal system is compelling.”
According to Steemson, the host rocks at the project provide direct evidence of an epithermal system.
The Vidalita prospect in particular, is interpreted by the company to be at the top of the hydrothermal system, providing some excitement for shareholders that the mineralisation may still be well preserved.
This week Emu announced it had identified another highly prospective area of interest within the Jotahues prospect with a number of encouraging rock chip and soil sample assays returned and others still to come.
Initial results show samples reported of between 0.6 and 3.6 ppb gold, 714 to 3307 ppm arsenic and 11 to 85 ppm antimony.
Steemson, a 40 year mining veteran and founding Director of Sandfire Resources said, “I have never seen such an extraordinary data set from colluvial material and, what is more remarkable, is that such a large mineralised area has remained untested despite the intense activity and numerous world class gold discoveries in the Maricunga belt”.
All three of the first three drill holes were sampled at 1 metre intervals across the entire length of the hole with the first of the three holes being abandoned at the 105m mark.
Intriguingly, every one of the 100 plus samples from the first hole exhibited both gold and silver over the entire 105m hole length. Whilst the grades were modest, Emu says the host rocks and the presence of consistent gold and silver may well be evidence that they are at the top of a high sulphidation epithermal gold/silver mineralised system.
The second hole was set to target an area that exhibited surface gold samples grading up to 14.5 grams per tonne gold.
This hole also showed silver in every sample across the 193m intersection and gold in all but a few.
Silver was present across the entire length of the third hole too.
Emu were initially targeting a depth of around 400m but fell well short of that and were unable to test their theory of a large, highly altered system sitting below a lower grade, shallower steam cap.
Whilst it is still just a theory, it is nonetheless a theory based on a whole series of pointers that all come together to present a compelling case to remobilise a new drill rig at the project without delay.
These pointers include a combination of encouraging large alteration zones across the tenement, extensive soil geochemical anomalies, a coincident geophysical target, high grade rock chip samples within the alteration zones and the albeit limited, drilling campaign.
According to management, the pervasive nature of the gold and silver geochemistry with associated pathfinder elements observed from the initial drilling campaign is a noted feature of other lucrative ore deposits within the Maricunga Belt including at Salares Norte, Alturas, Pascua Luma and La Coipa.
Steemson said the plan now was to drill a 6000m-10,000m air core program using a new drilling contractor and to take up to 2000m of core.
He said, “By using a different drill method, we aim to benefit from a more productive program.”
With the drill program about to get underway again, the intriguing question of just what is under that steam cap at Emu’s Chile gold project will shortly be answered.
And with just 102m shares on issue and 59% of them held by the top 20, it may not take much to start a chile hot fire under this 14c stock.
