Extensional reverse circulation drilling by ASX-listed junior gold explorer Kingwest Resources has delivered a slew of cracking high-grade and wide gold hits in auriferous shoots outside the existing mineral resource at its multi-deposit Menzies gold project about 130km north of Kalgoorlie in WA. The best of the new intersections from the recently completed 24-hole RC program totalling 4,709m were 26m grading an average 4.56 grams per tonne gold from 158m including 2m at 49.49 g/t from 169m and 25m going at 1.9 g/t from 213m including 2m at 10.09 g/t from 213m.
Other stand-out intercepts were 19m at 2.15 g/t from 167m including 1m at 5.34 g/t from 185m, 3m at 3.2 g/t from 148m including 1m at 7.61 g/t from 148m and 2m at 4.83 g/t from 151m including 1m at 6.62 g/t from 152m and 1m at 12.78 g/t from 105m.
Perth-based Kingwest says the latest drill results were received for the Lady Shenton System deposit, with assays for the Lady Harriet and Yunndaga deposits pending.
Lady Shenton’s Falconer lode coughed up the headline 26m at 4.56 g/t intersection more than 100m below and along strike from the current resource blocks.
The 19m at 2.15 g/t hit was returned from the Granodiorite lode, an interpreted extension of the Falconer lode, more than 50m below the resource blocks at the nearby Pericles deposit, while the Big Babe lode chimed in with 25m at 1.9 g/t about 70m below the current resource limit.
Management says the freshly encountered mineralisation can potentially be accessed via open-cut mining from surface or underground mining.
Kingwest Resources Chief Executive Officer Ed Turner said: “This deeper extensional drilling is enormously encouraging – proving large extensions to the Falconer lode at Lady Shenton, which shows continuous and predictable strike extensions as well as some of the broadest widths we’ve seen from any of the lodes at Menzies.”
“This lode has not been mined underground historically below the current open pit level so it has plenty of potential to provide significant additional resources that can be exploited in the future. We have barely scratched the surface of this lode and we expect to continue to expand on this resource with additional drilling.”
Kingwest hopes the RC extensional program at the Lady Shenton, Lady Harriet and Yunndaga systems will ultimately lead to an increase in the recently revised near-surface indicated and inferred resource inventory estimate for Menzies.
The company says it will continue to chase down the higher-grade shoots with deeper extensional drilling.
Latest published overall resource numbers for Menzies stand at 11.05 million tonnes at an average grade of 1.26 g/t for 446,200 ounces of contained gold – across the multitude of satellite deposits – using a 0.5 g/t cut-off grade.
Based on a 1 g/t cut-off, the Menzies global resource converts to 5.36 million tonnes at 1.83 g/t for 315,500oz of contained gold.
Earlier this year Kingwest also released a robust scoping study on a proposed open-pit gold mining and third-party toll processing operation.
Total free cash flows envisaged in the study came in at $80 million over an initial mine life of two years and seven months.
The study suggests mining of eight open pits at Menzies and toll milling of the higher-grade and medium-grade ore will produce 155,000oz of gold from 2.39Mt of treated ore averaging 2.02 g/t.
An assumed 95 per cent recovery rate alters predicted gold production for the initial 31-month life-of-mine period to 147,200oz.
Capital works and pre-production working capital costs have been forecast at about $20 million, according to Kingwest’s study.
The Menzies project area comprises a contiguous package of mining leases taking in a cluster of gold deposits and brownfields prospects over a strike length of more than 15km along the Menzies Shear Zone.
From 1995 to 1999, Menzies produced 145,000oz of gold from ore that yielded an average grade of 2.6 g/t.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
