Kuniko drilling flags NSW resource growth

A resource upgrade looks to be on the cards for Kuniko Limited at its Commonwealth-Silica Hill project after a recently completed phase-two drilling campaign hit visible sulphides outside the existing resource block model.

Two diamond holes totalling 724m successfully intersected zones of alteration and sulphide-bearing veins providing an encouraging start to the company's broader exploration program, designed to build on a previous bonanza-grade discovery at the project which sits in the heart of NSW's prolific Lachlan Fold Belt.

The early results offer compelling validation for the company which recently took the reins of the project after securing a controlling 51 per cent stake from Impact Minerals more than a year ahead of schedule. Now in the driver’s seat, Kuniko is aiming to prove its belief that the project could host a far larger district-scale mineral system than previously thought.

The project is situated 100 kilometres north of Orange in what is considered elephant country for mineral explorers with the region populated by world-class operations, including Newmont’s Cadia-Ridgeway mine and Evolution Mining’s Cowal and Northparkes projects. Kuniko’s ground also lies along-trend from Alkane Resources’ massive Boda-Kaiser porphyry copper-gold discovery.

Commonwealth contains two distinct deposits located just 200m from each other. The first, Commonwealth Main, is a precious-metals-rich volcanogenic massive sulphide (VMS) system. The second, Silica Hill, is a high-grade epithermal silver-gold system and is the focus of the current drilling. A previous historical JORC-inferred resource outlined by Impact Minerals tallied up 88,800 ounces of gold and 3.3 million ounces of silver with the system remaining open along strike and at depth.

Kuniko’s latest drilling was designed to test continuity around a stunning phase-one discovery hole. That initial hole returned a remarkable intercept of 0.5 metres grading an eye-watering 347 grams per tonne gold (g/t) equivalent which included a coffee spitting 20,603g/t silver, or more than 2 per cent.

The first of the new holes was drilled 60m down-dip of that discovery while the second was collared about 40m up-dip. Kuniko says both holes hit their targets intersecting alteration and sulphide-bearing stringer and stockwork veining consistent with the mineralisation seen in the original discovery hole.

Kuniko Limited managing director Maja McGuire said: “The first two holes of our Phase 2 drilling program have delivered an encouraging start at Silica Hill, with both holes intersecting the targeted zones of alteration, disseminated sulphides and stringer-vein mineralisation. Importantly, drilling has now demonstrated approximately 100m of continuity across CMKNI007, CMKNI004 and CMKNI008, with all three holes located outside the existing mineralised block model. This provides a compelling opportunity to expand the known Silica Hill mineralised footprint.”

Together, the discovery hole and the two new step-out holes demonstrate 100m of up-dip to down-dip continuity in the Silica Hill mineralised system. Notably, all three lie outside the project’s existing mineralised block model highlighting the potential for the company to significantly expand the resource footprint ahead of a planned mineral resource estimate update by December.

Visual logging of the core from the down-dip hole identified an initial zone of sulphide-bearing veining from about 205m downhole, followed by a broader 55m-wide zone of stringer and stockwork veining from 260m. The up-dip hole intersected a 45m-wide zone of sulphide-bearing stringer and stockwork veining from about 280m.

Kuniko has put the obligatory cautionary note on visual observations however, the presence of sulphides is potentially the first sign that geologists are onto something with promise. Additionally, drilling is ongoing at Main Shaft and Commonwealth South along with further regional work to define more targets.

Having gone from being a guest at the party to now running the show, Kuniko is now wasting no time in testing the scale of its flagship asset. With the drill bit confirming the geological model and extending a known high-grade system, all eyes will be on the pending assays to see just how big this discovery, bang in the heart of elephant country, might become.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au