Nexus Minerals Ltd (ASX:NXM) has commenced a diamond and reverse circulation drilling program at the Pinnacles Joint Venture gold project.
The Pinnacles JV is with mid-tier gold producer Saracen Mineral Holdings Ltd (ASX:SAR), and is strategically located in the Eastern Goldfields of Western Australia, around 120 kilometres northeast of Kalgoorlie.
There is an opportunity to significantly grow the gold resource base and with it a near term production profile, as Nexus has sufficient cash to take the Pinnacles JV project to a “Decision to Mine”.
Saracen will buy any ore produced under the JV agreement and process it at their 2.4Mtpa mill at Carosue Dam Mining Operations, just 13 kilometres to the north of the project.
Nexus has full access to Saracen infrastructure, haul roads and camp facilities.
The diamond and reverse drilling program is underway, and will cover circa 3350 metres.
The program will be testing for extensions to the Pinnacles East gold resource as well as testing priority regional gold targets.
Previously Pinnacles East delivered: 8 metres at 7.7g/t gold; 7 metres at 5.9g/t gold; and 3 metres at 9.8g/t gold.
The Pinnacles East gold resource extension program will test for depth and strike extensions to the south of, and beneath, high grade gold mineralisation identified to date.
The drilling program is anticipated to be completed late August, with results expected to be received from early September.
Nexus can earn up to an 85% interest in the Pinnacles JV with a staged drilling and project development spend.
Nexus had $5.6 million cash on hand (May 2016) and with the Pinnacles JV agreement with Saracen in place, the medium-term gold production opportunity is significantly de-risked.
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