Pilbara Gold Ltd (ASX:PGL) earlier this week outlined the significance of securing unconditional mineral rights over 367km² of prospective ground surrounding its 2.1 million ounce Mt York Gold Project, as the company advances its largest-ever drilling campaign on the asset.
Managing director Dr Peter Turner said the mineral rights, covering gold and base metals, were secured through a transaction that also delivered a $20 million payment to the company.
A key feature of the agreement is an additional 1,500 metres of strike associated with the Main Hill deposit. Turner said the company was “not just getting blue-sky ground”, with the rights extending across known mineralisation.
Pilbara Gold has now confirmed mineralisation over around 4.2km of strike. Turner said part of the newly secured ground had already contributed ounces to the company’s April resource update, which put Mt York at 2.1 million ounces.
The next potential catalyst is the company’s drilling campaign. Five rigs are currently operating at Mt York, with a sixth expected to arrive, as Pilbara Gold progresses a programme of more than 50,000 metres.
Turner said this represented the largest drilling programme the company had undertaken on the project. He noted that approximately 27,000 metres of drilling last year had contributed to a 700,000-ounce increase in the resource.
The current campaign has two main objectives. Pilbara Gold is undertaking infill drilling designed to move inferred material into the indicated category ahead of potential reserve conversion, while also testing extensions to the existing mineralisation.
Turner also pointed to observations from drilling at depth, saying geologists were seeing wider zones of mineralised banded iron formation. He cautioned that assay results had not yet been released, but said visually the formation appeared to be “just as wide or wider” beneath the existing deposit.
Further results are expected to provide the next indication of Mt York’s growth potential. Drilling later in the year is also expected to target extensions and possible new zones identified during the current programme.
Turner said the company’s central objective was to grow the resource base, adding: “We really believe that 2.1 million ounces is not where this project is going to sit at the end of 2026.”
For investors, upcoming assay results, resource expansion drilling, conversion of inferred resources and testing of new mineralised zones could therefore represent key catalysts as Pilbara Gold evaluates the ultimate scale of Mt York.
Interview highlights
- Pilbara Gold has secured unconditional gold and base metal mineral rights over 367km² of prospective ground surrounding the Mt York Gold Project.
- The rights were secured through a transaction that also involved a $20 million payment to Pilbara Gold.
- The additional ground incorporates around 1,500 metres of strike extension from the Main Hill deposit, giving the company rights over known mineralisation as well as broader exploration ground.
- Pilbara Gold has confirmed mineralisation over approximately 4.2km of strike at Mt York.
- The project currently hosts a 2.1 million ounce gold resource, with part of the newly secured ground already contributing to the latest resource estimate.
- Five drill rigs are operating at the project, with a sixth rig expected to arrive to support further extension drilling.
- The current programme is targeting more than 50,000 metres of drilling, making it the largest drilling campaign the company has undertaken at Mt York.
- Turner said drilling last year totalled about 27,000 metres and contributed to a 700,000-ounce increase in the resource.
- The programme is focused on both upgrading inferred material to indicated status ahead of possible reserve conversion and testing extensions to the mineralisation.
- Turner highlighted visually wider zones of banded iron formation at depth, while stressing that assay results had not yet been released to the market.
- The company expects additional drilling results over the coming weeks.
- Turner said Pilbara Gold believes the current 2.1 million ounce resource could grow materially, with further extension and new-zone drilling planned later in the year.
Proactive: Pilbara Gold has secured unconditional mineral rights over 367km² of prospective ground surrounding its 2.1 million ounce Mt York Gold Project. What does securing these mineral rights mean for the company and the broader Mt York project?
Dr Peter Turner: We’ve got 2.1 million ounces already, Jonathan. We’re busy drilling on the deposit and making it bigger, and I wouldn’t be doing my job if I didn’t secure all of the available and prospective ground around the deposit itself.
This was a strategy we adopted some time ago, two years ago in fact, when we spoke to PLS. We sold them a block of ground and managed to negotiate in that transaction a $20 million payment to us and the mineral rights — gold and base metal mineral rights — to 367km² of ground around the Mt York deposit.
Importantly, within that transaction is 1,500 metres of additional strike length of the gold deposit itself. So we’re not just getting blue-sky ground in this transaction. We’re actually getting the mineral rights to known mineralisation that continues for another 1,500 metres.
Earlier this year, in April, we put out a 2.1 million ounce resource update for the Mt York Gold Project. Included for the first time was a portion of gold estimated from that ground, so we’re already starting to add resource ounces from part of that mineral rights agreement.
Proactive: Just to clarify, that 1,500-metre extension is from the Main Hill deposit, so it is quite significant?
Dr Peter Turner: Yes. We call it the Main Hill Extension for obvious reasons. We have now confirmed that the mineralisation extends over 4.2km, and that’s really quite extraordinary.
We certainly see this deposit growing, but to grow it we need to drill and we need to expand the landholding around the deposit as well.
Proactive: Let’s talk about drilling. Talk us through what’s going on in that regard.
Dr Peter Turner: We’ve still got five rigs on site. We’ve had those rigs on site since about April this year. We’ve started to put out the first lot of results, and over the course of the next couple of weeks we can expect to see more results flowing through.
I was up at site last week with a group of analysts and brokers, and what we were seeing in the core yard was a lot of very excited geologists.
We’re continuing to see wider zones of the mineralised BIF, the banded iron formation rocks, particularly at depth, and a lot of those appear to be mineralised as well.
Of course, I can’t give any information on results that haven’t gone to market. But visually, what we’re seeing is that the banded iron formation is, as we thought, just as wide or wider where we’ve been drilling underneath the deposit itself.
So it’s really exciting times. We are getting a sixth rig to site this month, and that will help to start drilling out extensions to the deposit to grow this thing to a much larger size than the 2.1 million ounces. That’s really one of our major aims in this project.
Proactive: As you mentioned, that is a key priority. It’s a 50,000-metre-plus drilling programme. How does all of this feed into the focus?
Dr Peter Turner: We’re doing two things with this large drill programme. There are a couple of things I want to say. Every time we drill this project, the resource has increased. Secondly, this is the largest drill programme that the company has ever undertaken on this asset.
We grew the resource by 700,000 ounces by drilling about 27,000 metres last year. This year, we’re almost doubling the amount of drilling we’re doing on this project.
A lot of the programme is infilling inferred material through to indicated in preparation for reserve conversion, but we’re also extending the mineralisation and hopefully adding quite a few more ounces to the underlying mineral resource estimate on this project.
We really believe that 2.1 million ounces is not where this project is going to sit at the end of 2026.
Proactive: The outlook is good and, as you said, the results are coming. What can investors and other interested parties expect to see over the next month or two?
Dr Peter Turner: I think you can expect to see me being extremely excited, as well as all the geologists.
We’ve got 14 geologists now in the group, and that’s really telling you how excited we are about this project. I’ve looked at gold projects all over the world for a very long time, and I can almost guarantee that this project is going to get bigger.
But we’re doing this as part of a sensible strategy that the board is very supportive of. One thing is that we want to grow the resource base of this project, and we see obvious and reasonably easy targets to actually do that.
A lot of the drilling will be infill for the resource, but a lot of the drilling slightly later in the year will also be aimed at extending the deposit and looking at some interesting new zones that we think we’re seeing in the drilling right now.
That will really test the whole idea of whether this is a 2 million ounce deposit or a much bigger deposit.
Proactive: Peter, we look forward to seeing the results as they come through, and I’m sure we’ll talk again as they do. Thanks for your time today and we’ll speak again soon.
Dr Peter Turner: Thanks, Jonathan.