De Grey Mining has invested $7 million to achieve its minimum first-stage spend at Novo Resources’ Egina gold project in Western Australia’s Pilbara region, with a further $18 million to be tipped in to create a joint venture (JV).
The earn-in is part of a required $25 million cash plunge into the promising ground within four years to create the 50:50 equal share at the site that sits about 85km south of Port Hedland.
Egina’s 1034-square-kilometre ground sits in proximity and to the south-west of De Grey’s renowned 12.7 million-ounce Hemi gold project. The tenure believed to exhibit similar attributes to Hemi is considered prospective for significant intrusion-related deposits.
As part of the earn-in JV agreement between the two parties, De Grey assumed control of Novo’s ground in July last year and rapidly advanced its key exploration programs across the site, including air-core (AC) and reverse-circulation (RC) drilling and geophysical surveys. Management says the focus is on four prospects at the project, targeting Heckmair, Irvine, Lowe and Whillans, with De Grey’s drilling program during its initial spend discovering anomalous gold and base metal results.
Prior to De Grey steering the exploration ship, Novo completed about 60,000m of AC and RC drilling last year. De Grey has since followed through with an additional 34,180m of AC and 9129m of RC drilling across the four project areas, testing prospective intrusions and regional structures.
Novo notes that the combined landholding of its Egina tenure and De Grey’s Hemi ground formed a coveted 2500sq-km area within the Mallina Basin region.
RC drilling at its Heckmair prospect encountered a sizeable west/north-west-trending 1.5km brittle fault zone that produced broad intervals of anomalous base metals, including 24m at 0.2 grams per tonne gold, 13.2g/t silver, 0.1 per cent copper, 1 per cent lead and 0.1 per cent zinc, with individual metres grading up to 4 per cent zinc and 4 per cent lead. The best gold result was 2m going 2.8g/t.
The Lowe prospect returned a solid 8m running 4.74g/t gold from 97m that included a 3m slice of 11.88g/t from 100m. Results at Irvine consisted of 4m at 2.1g/t gold and 25m going 0.99 per cent zinc-lead combined and 43m hitting 0.53 per cent zinc-lead combo.
At Whillans, multiple thin anomalous gold intersections were encountered.
Novo Resources executive co-chairman and acting chief executive officer Mike Spreadborough said: “We are delighted that De Grey shares our enthusiasm for the Egina Gold Project. We’ve been exploring the Mallina Basin since 2017, attracted by its gold prospectivity. To be able to partner with a group like De Grey, with its nearby Hemi deposit, provides the best opportunity for us to drive value for our shareholders at Egina, through any potential new discoveries and future exploration success.”
De Grey general manager Phil Tornatora believes the Egina project is an important part of the company’s strategy to grow a big regional-scale resource base near its planned Hemi processing plant, with the operation’s 1000sq-km ground significantly growing its tenure.
In June last year, the two parties entered into an earn-in and JV agreement to be known as the Egina JV, for the Becher prospect and adjacent tenements within the Egina gold camp.
Novo says De Grey now has the right to earn a 50 per cent JV interest in the Egina tenements by spending an additional $18 million by June 30 in 2027, to meet its total minimum spend of $25 million. Each party will fund its share of JV costs or be diluted at 1 per cent for every $1 million on non-expenditure contributions.
De Grey is awaiting final assays, including AC drilling material re-splits and analysing results from all completed work programs to formulate optimal follow-up RC and diamond-drilling programs in the near-term. It is also in discussions with several traditional landowner groups to obtain the necessary heritage surveys to be able to kick off future programs.
Novo appears to have wisely linked-up with a bigger and more powerful player with the financial muscle to truly test the depths to which Egina can be explored.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Craig Nolan
