Mandalay Resources Corporation (TSE:MND) (OTCQB:MNDJF) (FRA:R7X2) has reported more positive drill results from its Costerfield mine in Victoria, Australia, which have extended the newly discovered Shepherd zone there.
The assays showed high grades at both the eastern and western veins and have underscored the potential of a large system.
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Assays included 172.3 grams per ton (g/t) gold over a true width of 0.27 metres (m) in one hole at the eastern vein and 712.8 g/t gold over 0.10m in another drill hole at the western vein.
"We are extremely excited about this discovery and the continuity of very high grades over many hundreds of meters in strike length," said Mandalay CEO Dominic Duffy in a statement.
"It is obviously important to understand the full dimensions of this vein system and the economic portions of the deposit to determine its overall impact on Costerfield’s long-term future."
The Eastern vein has now been traced over 300m of strike and 100m in vertical extent, while the mineralization remains open to the south and at depth. Similarly, the Western vein has been traced over 400m of strike and around 100m in vertical extent and remains open to the south and at depth
Duffy continued: "To date, drilling has been concentrated in the upper portions of the zone with a focus on optimizing the knowledge of the geometries and grades for near-term mine planning.
"During the near-term, additional underground exploration drill platforms will be developed allowing for optimum drill intercept angle, which will slow the drill rates into the Shepherd Zone.
"Infill drilling will continue at an accelerated rate in the upper areas of the Shepherd Zone for medium-term mine planning, as well as to test for extensions of the vein system to the south and at depth."
An exploration target dipping westerly from the Youle deposit at Costerfield is currently under investigation, while the results of a 2015 drill program to assess Cuffley mineralization are being reviewed in conjunction with the evolving Shepherd zone interpretation, said Mandalay.
"This updated targeting exercise aims to pursue a significant parcel of mineralization under the mined extent of the Cuffley orebody that mirrors the mode of mineralization of the Youle / Shepherd system," the miner told investors.
Research Capital Corp repeats 'Buy'
Following the update, Research Capital Corp repeated a 'Buy' on Mandalay shares and a C$5.50 share price target (current price: C$3.09).
"The so-called Shepherd zone comprises two vein arrays in the footwall of the main Youle orebody, where MND continues to advance development in order to ramp up production from that high-grade zone," said analysts in a note.
"The discovery itself follows a 2019 deep drilling program that identified a large hydrothermal system at a vertical depth of 900m below surface that is now thought to be the feeder for both zones."
The analysts noted that proven and probable reserves at Costerfield are estimated at 616,000 tonnes grading 12.88 grams per tonne (g/t) gold and 3.54% antimony, for 255,000 ounces of contained gold and 21,800 tonnes of contained antimony. The Youle zone, which overlies Shepherd, is notably richer, averaging 15.3 g/t gold and 3.3% antimony in 396,000 tonnes.
"Given their relative proximity, MND has accelerated the underground drill program and now has four rigs turning on Shepherd. Accordingly, we expect a steady news flow ahead, noting that results from several holes remain outstanding," they added.
---Updates for analyst note---
Contact the author at giles@proactiveinvestors.com