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De Grey Mining embarks on Pilbara Gold Project resource expansion drilling program

Published: 16:00 21 Mar 2018 GMT

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The company's shares surged 500% in 2017 following the discovery of conglomerates style mineralisation

De Grey Mining Limited (ASX:DEG) has commenced drilling at the Mt Berghaus gold deposit within the 1.2 million ounce Pilbara Gold Project, near Port Hedland, Western Australia.

The program aims to infill and upgrade resources, including areas within the August 2017 scoping study pit shells, to the level of JORC indicated category.

This will allow later conversion to reserves as part of the overall pre-feasibility study.

De Grey has platform for strong build since acquisition

The Pilbara Gold Project represents a combination of De Grey’s established Turner River projects and tenements acquired following the acquisition of Indee Gold in January.

The combination of the two projects considerably strengthened De Grey’s profile as its tenement packages contain more than 1.2 million ounces of established gold resources.

The company has had outstanding success in identifying shallow conglomerates style mineralisation within the Pilbara Gold Project area.

READ: De Grey Mining’s shares surge on finding gold nuggets at the Pilbara Gold Project

Stunning results which saw the company accumulate 91 nuggets ranging in size from two millimetres to 10 millimetres triggered a 500% share price surge in the second half of 2017.

Drilling at high-grade Toweranna prospect

Early stage drilling at Mt Berghaus is expected to be completed by April.

Following the Mt Berghaus drilling, similar infill drilling for resource upgrades will be undertaken at the Amanda, Hester, Mallina and Toweranna deposits.

At Toweranna, recent promising results are to be followed up to better define the high-grade intersections both along the western and southern zones.

Resource increase expected at Toweranna

This drilling aims to extend and infill mineralisation and is expected to provide a significant resource increase at the Toweranna gold deposit.

The inferred resource stands at 430,000 tonnes at 2.9 g/t for 40,700 ounces.

This existing resource is currently confined to only the lodes intersected along the western contact.

Share price tells the story

De Grey fell off the radar in late 2017, and its shares hit a low of 10 cents in early February.

However, when the Toweranna drilling results were released on February 2, the company’s shares surged 35%.

Resampling results confirm strong mineralisation extends further along strike and at depth outside of the existing Toweranna resource.

Shallow high-grade mineralisation previously detected

There are also indications of further high-grade lodes along the southern contact while areas to the east and north remain largely untested.

According to the Western Australian Mines Department, previous shallow underground mining produced over 5,000 ounces of gold, at an average grade of 40.9 g/t.

An updated resource estimate is planned to be completed during the second quarter of 2018.

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