Alchemy Resources Limited (ASX:ALY) has unveiled the maiden mineral resource estimate for its cornerstone Karonie Gold Project in Western Australia’s Eastern Goldfields.
The precious and base metals explorer contracted a Perth-based geological consultancy to establish the inferred JORC 2012 resource, which totals 2.96 million tonnes at 1.2 g/t for 111,100 gold ounces across the Taupo, K25 and Parmelia deposits.
Investors have responded positively with shares shooting up more than 21% at the opening to 1.7 cents.
The pioneer resource estimate is founded on a mix of reverse circulation (RC), diamond and aircore drilling, while further exploration is set to kick off over Karonie’s southern tenements under a phase two drilling program.
More broadly, it seems this resource is just the beginning, with a suite of targets that are yet to be explored and current estimates representing only 2% of Karonie’s strike extent.
Further growth on the horizon
Alchemy Resources CEO James Wilson said the maiden resource established a solid base for growth in Karonie’s epicentre.
“Importantly this is a high-quality, independently conducted resource estimate which is largely contained within the top 150 metres and remains open at depth and along strike at all three deposits.
“The current resource footprint covers less than 2 kilometres combined of the 85-kilometre-plus strike length of the Karonie tenement package, which has active mining operations along the length of the same highly prospective structures.
“That leaves a lot of real estate along strike and at depth for future growth."
“Moving forward from the central resource, our strategy is to expand on the resource inventory by heading initially to the southern Karonie areas for our phase two drill program, and then to the north towards Manhattan for phase three," Wilson said.
“We will also be targeting high-grade gold resources in the far south areas at Karonie where data mining of historical drilling assays has revealed strong potential for high grades close to surface which have not been followed up in nearly 20 years.”
Establishing maiden resource
The maiden JORC-compliant estimate at the Eastern Goldfields asset comprises resource tallies from three of Karonie’s key deposits.
Together, the 70,600-ounce resource from K25, the 20,700 ounces from Parmelia and the 19,800-ounce resource from Taupo form the initial inferred tally.
The resource represents the culmination of six months of work, which included:
- The review, verification and interpretation of historical data;
- Resurveying of historical drill collars to validate datasets;
- Integration of historical datasets that had previously never been digitised;
- The development of a new geological model; and
- Targeted drilling to provide additional resource confidence.
All up, 70 RC holes, nine diamond holes and nine aircore holes were used to establish the mineral resource, with more than 10,000 metres drilled.
Expansion on the cards
Promisingly, Alchemy believes there is substantial potential to expand the current JORC resource through additional drilling, as the deposits remain open along strike and at depth.
Currently, the 100%-owned Karonie tenements cover prospective structures and host rocks that extend around 30 kilometres north and 55 kilometres south of the resource and remain poorly tested by modern exploration methods.
In essence, the resources at the K25, Parmelia and Taupo deposits signify the first stage in Alchemy’s growth strategy for the Eastern Goldfields asset.
Next on the agenda
With the maiden resource now defined, Alchemy is prepared to execute its phase two drilling campaign.
This will hone in on Karonie’s southern tenements, which contain the Challenger, Gilmore and Esplanade targets.
These highly prospective camp-style gold targets are yet to see follow-up exploration.
So far, access agreements and work programs have been submitted with drilling to commence once clearances have been obtained.
Alchemy also plans to conduct high-resolution UAV magnetics over the targets to better define the areas it expects to drill, as well as highlight prospective structures.
With the resource footprint signifying just 2% of Karonie’s strike extent, further exploration to the south could one day contribute to a mineral resource update.