Acquisition of Indee Gold provides Scale and Development Momentum

Size: px

Start display at page:

Download "Acquisition of Indee Gold provides Scale and Development Momentum"

Myrtle Moore
5 years ago
Views:

1 Acquisition of Indee Gold provides Scale and Development Momentum February 2017 ASX CODE : DEG

2 Statements Competent Persons Statement The information in this report that relates to Exploration Results for the Turner River Project and the Mallina Exploration Target is based on, and fairly represents information and supporting documentation compiled by Mr Andrew Beckwith, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy. Mr Beckwith is a consultant to De Grey Mining Limited. Mr Beckwith has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves. Mr Beckwith consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. The Information in this report that relates to Mineral Resources for the Turner River Project is based on information compiled by Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Payne is a full time employee of Payne Geological Services. Mr Payne has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Payne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Forward Looking Statements Statements regarding De Grey s plans with respect to the mineral properties, resource reviews, programmes, economic studies and future development are forward looking statements. There can be no assurance that De Grey s plans for development of its mineral properties will proceed any time in the future. There can also be no assurance that De Grey will be able to confirm the presence of additional mineral resources/reserves, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of De Grey s mineral properties. 2

3 Statements (2) **Cautionary Statements Indee Gold Resources** Investors are advised to read the De Grey ASX announcement released (9 February 2017) in conjunction with this presentation for further details on the resources, exploration targets and exploration results in relation to the Indee Gold Project De Grey highlights that the following Indee Gold Project Resource Estimations were prepared by the former owners and do not necessarily conform to the JORC Code (2012) reporting standards. However they are stated in this release as the defined resources are considered material under ASX Listing Rule 3.1. # JORC Code (2004) Resources The following information is provided as background to the Indee Gold Project and the JORC Code (2004) Resources as it is considered material by De Grey Mining. De Grey has completed an initial due diligence review of the Information as prepared by the previous owners, however De Grey does not take responsibility for the Information. The first publically reported Indee Gold Project pre mining resource statement was reported by Range River Gold ( RRG ) to the ASX on the 4 August 2004, however this initial public resource statement was not stated to JORC Code (2004) standards. On 4 March 2005, the Indee Gold Project pre mining resource statement was updated to a total of 10.46Mt at 1.6g/t Au for 529,000 ounces as published by RRG to the ASX in Market update Indee Gold Project. This resource was reported to JORC Code (2004) standards and included the following categories Measured 1.9g/t for 123,000 oz, Indicated 1.5g/t for 277,000 oz and Inferred 1.4g/t for 129,000 oz. Subsequent open pit mining was undertaken by the RRG which resulted in depletion of the Withnell and Camel 1 deposits. The Calvert, Dromedary (Camel 2), Toweranna and Roe deposits remained unmined. At the conclusion of mining in 2007, RRG completed a detailed review of the four Withnell and Camel 1 resources taking into account depletion due to physical mining, adjustment of the resource wireframes based on more detailed geological mapping within the open pits, detailed density data, grade control drilling and mining reconciliations against the early 2005 resource model. In 2008, RRG engaged independent resource consultants to undertake and update the four Withnell and Camel 1 resource estimates resulting in a net loss from the initial publically stated 2005 resource. The new updated 2008 resource (JORC 2004) is as listed above in Table 1. On 12 May 2008, Range River announced a joint venture with Chinese company Northwest Mining and Geological Exploration Bureau for Nonferrous Metals which ultimately transferred the rights to the wholly owned Australian private company Indee Gold Pty Ltd after the project was purchased outright in November During the period from 2008 to 2016, Indee Gold Pty Ltd completed a substantial amount of drilling focussed on testing beneath the Withnell resource and other areas. Results from this drilling have not been reported publically but are summarised in Table 3 and 4 of this report. The drill results highlight possible extensions to the mineralisation beneath the Withnell trend of deposits and at the new Mallina prospect. De Grey 3 expects to incorporate these new drilling results during the resource evaluation currently underway.

4 Statements (3) Further Statements The Information in this report that relates to Exploration Results and Mineral Resources for the Indee Gold Project have been completed and compiled by the previous project owners. De Grey nor any of its staff, consultants or the Competent Persons take no responsibility for the accuracy of the Information. However, De Grey and its consultants have completed due diligence reviews of the Information and consider the Exploration Results and Mineral Estimates fairly represent the mineralisation associated with the Indee Gold Project and further expect detailed evaluation of the previous owner s data will allow reporting of the Information to JORC 2012 standards at a future date. De Grey also highlights that it has not completed any new work on any of the resource models or estimates, except for the initial review, and cannot guarantee the stated Indee Gold Project resources will be able to be reported in accordance with the JORC Code (2012) at any time in the future. Accordingly, De Grey cautions investors that the Company has not yet done sufficient work to be able to verify the former owner s results or estimates in accordance with the updated standards set out in the JORC Code (2012). While nothing has come to the attention of the Company to question the reliability of the results or estimates prepared by the former owner, the Company is not to be regarded as reporting, adopting or endorsing those results or estimates. As De Grey advances the Indee Gold Project assessment during the Option Period, it is the Company s intention to assess and remodel the resources and report the updated estimates to JORC Code (2012) standards wherever appropriate. De Grey has engaged an independent resource consultant who has reviewed the original drilling data, modelling and previous resource estimates as completed by various independent Australian resource consultants and considers there are no material differences to the stated resources based on the original modelling. Furthermore, recent drilling has occurred below many of the Withnell resources, and this new drilling was completed after the stated resource estimates. This new drilling data shows mineralisation extends below the current resources and has the potential to extend the resources at depth. Investors should note that even when these steps are undertaken, there is uncertainty that the Company will be able to report exploration results or estimates of resources or reserves in accordance with the JORC Code (2012). For clarity, the 100% De Grey owned Turner River Project resources are reported in accordance with the JORC Code (2012) 4

5 Executive Summary Transformational Acquisition Option Agreement to acquire Indee Gold Proximity and resource scale enables De Grey to commence economic studies Propels De Grey from Explorer towards Gold Developer Significantly Expands Resources Turner River Project 464,000oz Indee Gold Project** 345,000oz Excellent Growth Potential Positive drill results beneath resources Mallina Exploration Target Walk-up drill targets and numerous untested anomalies Target resource growth to >1.0Moz within 6 months ** JORC 2004 resources, refer to Resources Section and Cautionary Statements 5

6 Complementary and Contiguous Projects Port Hedland Port Hedland Turner River/ Indee Project De Grey tenement De Grey tenement appln Indee tenement Turner River Project Orchard Tank Indee Gold Project Whim Creek Withnell Calvert Mt Berghaus Amanda Wingina Discovery Mallina Toweranna Dromedary, Roe, Camel Pilgangoora Li Ta 6

7 Key Agreement Details 12 Month Option Period to Acquire De Grey has exclusive 12 month Option Period to evaluate and explore. Option cost of $100,000 (non refundable) and $600,000 expenditure in 12 months. De Grey may elect to acquire 100% of Indee Gold Pty Ltd. Final acquisition cost of $15M within 18 months. Vendor is Australian subsidiary of large Chinese SOE - Northwest Nonferrous Australian Mining Pty Ltd 7

Secures Two Gold Rich Shear Zones De Grey now controls 160km of strike along Mallina Shear Zone and Tabba Tabba Thrust Orchard Tank 100km of Mallina Shear Zone Mt

8 Secures Two Gold Rich Shear Zones De Grey now controls 160km of strike along Mallina Shear Zone and Tabba Tabba Thrust Orchard Tank 100km of Mallina Shear Zone Mt Berghaus Amanda Discovery Whim Creek Mallina Withnell Calvert Wingina 60km of Tabba Tabba Thrust Mirdawari Dromedary, Roe, Camel Toweranna Indee Gold tenement De Grey tenement

Indee Gold Assets Resources, Advanced Targets and Mining Assets Established 345,000oz Resources**. High proportion in Measured (9%) and Indicated (68%) categories.

9 Indee Gold Assets Resources, Advanced Targets and Mining Assets Established 345,000oz Resources**. High proportion in Measured (9%) and Indicated (68%) categories. Granted Mining Leases and Exploration licences (414km 2 ). Remnant Mining Infrastructure (previous small scale heap leach operation). 850,000t crushed material in surface stockpile. (Not included in current resources) Camp, ROM pad, haul roads, water bores. Walk-up drill targets and extensive areas not tested under shallow sand cover. Extensive mining and exploration database Contiguous with De Grey s 100% owned Turner River Project. Camel 1 shallow open pit ** JORC 2004 resources, refer to Resources Section and Cautionary Statements 9

Indee Gold Resources (JORC 2004) 345,000 ounces with growth potential Well drilled 90% of resources on granted mining leases 77% Indicated category or better Positive drilling results beneath not

5g/t Au Cut off Grade Option to Acquire Deposit Measured Indicated Inferred Total Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Withnell North # 0.65 1.5 31,000 1.12 1.

10 Indee Gold Resources (JORC 2004) 345,000 ounces with growth potential Well drilled 90% of resources on granted mining leases 77% Indicated category or better Positive drilling results beneath not included in models Resources remain open along strike and at depth De Grey intends to upgrade to JORC 2012 in 2017 Q1 Withnell Mineralisation Indee Project ( # JORC 2004) 0.5g/t Au Cut off Grade Option to Acquire Deposit Measured Indicated Inferred Total Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Withnell North # , , , ,000 Withnell South # , ,000 Withnell East # , ,000 Withnell West # , , ,000 Camel 1 # , ,000 Calvert # , ,000 Dromedary (Camel 2) # , ,000 Toweranna # , ,000 Roe # , ,000 Indee Gold Project , , , ,000 Discrepancies may occur in totals due to rounding Tonnes, grade and ounces rounded to reflect accuracy of estimates # JORC 2004 estimates based on Information supplied by the previous owners, refer to Cautionary Statements in this report ** JORC 2004 resources, refer to Resources Section and Cautionary Statements 10

11 Overall Project Resources Measured Indicated Inferred Total Project Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Turner River Project , , , ,000 Indee Gold Project , , , ,000 Turner River Indee Gold M+I (ounces) 229,000 (49%) 267,000 (77%) Withnell shallow open pit ** JORC 2004 resources, refer to Resources Section and Cautionary Statements 11

12 850,000t crushed stockpile on surface Currently not included in resources Grade to be determined De Grey surface sampling averaged ~1g/t Potentially cheap ounces as no mining cost! 12

13 Feasibility Development Programme Agreement to acquire 100% of Indee Gold enables Economic Evaluations to commence immediately Step 1 Scoping Study - Simple Open Pit Mining Strategy Remodel and upgrade resources to JORC 2012 Pit optimisations Define scale of operation Step 2 Pre-Feasibility Study Develop basic plant design and technical aspects Large pre-existing mining database Complete technical upgrades hydrology, geotech, metallurgy, environment Resource expansion Crushed Stockpile, Mallina and Mt Berghaus Initiate approvals process Step 3 Definitive Feasibility Study Complete detailed study and secure funding Financing to include capex and acquisition cost 13

14 Proposed Timeline AGREEMENT RESOURCES JORC 2012 SCOPING STUDY RESOURCE EXTENSIONS PRE FEASIBILITY STUDY DEFINITIVE FEASIBILITY STUDY FUNDING INDEE ACQUISITION DECISION TO MINE 17Q1 17Q2 17Q3 17Q4 18Q1 18Q2 18Q3 18Q4 19Yr commenced 14

15 Withnell Trend- Main Assets Leach Pads Dromedary (12KozAu) Roe (33KozAu) Camel (45KozAu) Hester ROM Pad Waste Dump Mine Camp Waste Dump Withnell West (44KozAu) Withnell Central (126KozAu) Withnell East (9KozAu) Far East South Ridge Main deposits and infrastructure on granted mining leases 1km Telford ** JORC 2004 resources, refer to Resources Section and Cautionary Statements 15

16 Withnell Trend Long Section 6km Dromedary (12KozAu) Limited drilling Roe (33KozAu) Camel (45KozAu) Limited drilling Hester Withnell West (44KozAu) Withnell Central (126KozAu) Withnell East (9KozAu) 200RL 400RL 4/2.62 4/ / /6.74 2/ RL Selected Significant Intercepts outside or on margins of block models (m/gptau) 2.4/ / /5.13 4/ RL > 20gm > 10gm >5gm Existing Pit Resource Model (JORC 2004) 12.9/5.54 Long Section Looking North ** JORC 2004 resources, refer to Resources Section and Cautionary Statements 16

Withnell - Cross Section 624200E 100RL Selcted Intercepts within

2 100RL Intercepts > 20gm (m/gptau) 16/4.

17 Withnell - Cross Section E 100RL Selcted Intercepts within resource model 33/2.44 9/3.52 0RL 16/4.5 61/ / / RL Intercepts > 20gm (m/gptau) 16/4.5 within resource model Existing pit outline Resource model 26/0.76 9/2.52 Cross Section Looking West 17

18 Camel 1 - Cross Section E 100RL 4/3.03 5/3.62 7/8.02 0RL 10.5/ /28.5 Intercepts > 10gm (m/gptau) within resource model 12/28.5 Existing pit outline Resource model Cross Section Looking West 18

19 Dromedary - Cross Section E 100RL 12/ / / /5.18 0RL 39/ /3.68 Intercepts > 10gm (m/gptau) within resource model Resource model Cross Section Looking West

Calvert - Cross Section 7688920N 100RL 12/1.07 19/1.39 20/1.02 17/1.44 34/1.44 0RL 20/1.04 23/1.

20 Calvert - Cross Section N 100RL 12/ / / / /1.44 0RL 20/ / /1.43 Intercepts > 10gm (m/gptau) within resource model Resource model Cross Section Looking North

Near Term Resource Potential - Mallina 4/9.11 6/3.79 7/5.45 3km Mallina Exploration Target 1.4Mt 2.6Mt, 1.2 g/t Au 1.5 g/t Au, 53,000oz 125,000oz Infill drilling required 4/6.80 3/12.49 3/6.61 29/1.

21 Near Term Resource Potential - Mallina 4/9.11 6/3.79 7/5.45 3km Mallina Exploration Target 1.4Mt 2.6Mt, 1.2 g/t Au 1.5 g/t Au, 53,000oz 125,000oz Infill drilling required 4/6.80 3/ / / / RL 6.9/1.94 9/ / / / / /2.52 8/ RL 400RL 400RL 4/9.11 Selected Significant Intercepts (m/gptau) Interpreted Lodes Cautionary Statement: The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources will be realised. Long Section Looking North 21

22 Selected Intercepts beneath Withnell Trend Prospect DrillType HoleID East North RL Dip Azimuth DepthFrom DepthTo Width Au (g/t) Withnell DD INDD , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell RC INRC , ,688, Withnell S RC INRC , ,688, Withnell N RC INRC , ,688, Withnell DD NDD072A 624, ,688, Withnell DD NDD073A 624, ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688, Withnell DD NDD , ,688,

23 Selected Intercepts beneath other deposits Prospect DrillType HoleID East North RL Dip Azimuth DepthFrom DepthTo Width Au (g/t) Camel1 RC CM1RC , ,688, Camel2 RC CM2RC , ,688, Camel2 RC CM2RC , ,688, Camel2 RC CM2RC , ,688, Camel2 RC CM2RC , ,688, Camel2 RC CM2RC , ,688, Camel2 RC CM2RC , ,688, Camel2 DD INDD , ,688, Camel1 DD INDD , ,688, Camel2 RC INRC , ,688, Camel2 RC INRC , ,688, Camel2 RC INRC , ,688, Camel1 RC INRC , ,688, Camel1 RC INRC , ,688, Camel2 RC INRC , ,688, Hester RC INRC , ,688, Roe RC INRC , ,688, Roe RC INRC , ,688, Roe RC INRC , ,688, Roe RC INRC , ,688, Roe RC ROERC , ,688, Roe RC ROERC , ,688,

24 Indee Gold Extensive Gold Anomalies Steel Star Mallina Calvert Mirdawari Charity Well Peawah Dromedary Roe Camel Withnell West Yule Toweranna Geemas T7 North 10km Gold in soil (Auppb) <3ppb 3 5ppb 5 10ppb 10 50ppb ppb >100ppb 24

25 Indee Village Camp 25

26 Turner River - Tabba Tabba Thrust Wingina Deposit (288,000oz) with internal 4.1g/t for 144,000oz Orchard Tank 100km of Mallina Shear Zone Mt Berghaus Amanda Discovery Whim Creek Mallina Withnell Calvert Wingina 60km of Tabba Tabba Thrust Mirdawari Dromedary, Roe, Camel Toweranna Indee Gold tenement De Grey tenement

Turner River - Tabba Tabba Thrust 10km Wingina Resource: 5.49Mt @ 1.

6g/tAu (35KozAu) Along strike soil anomaly identified not drill tested Limited drilling Limited drilling Limited drilling Limited

27 Turner River - Tabba Tabba Thrust 10km Wingina Resource: 1.6g/t Au (288KozAu) Along strike soil anomaly identified not drill tested Amanda Resource: 1.6g/tAu (35KozAu) Along strike soil anomaly identified not drill tested Limited drilling Limited drilling Limited drilling Limited drilling 1.57g/tAu (RB96IND14) (Regional RAB intercept) 43.2g/tAu (ERC011) 19.5g/tAu (TRC023) 29.3g/tAu (ERC012) 7.3 (incl 17.7g/tAu) (ERC008) (No resource estimate done) Resource model (JORC 2012) Long Section Looking NW

Turner River - Mt Berghaus Upside 5km West

geochemistry limited drilling Mt Berghaus

Limited drilling 200RL 400RL 2/24.6 14/6.

62 Selected Significant Intercepts outside

28 Turner River - Mt Berghaus Upside 5km West Berghaus (14KozAu) 3km of anomalous soil geochemistry limited drilling Mt Berghaus Central (106KozAu) North Lode (21KozAu) Limited drilling 200RL 400RL 2/ /6.5 3/2.7 (Aircore) 200RL 800RL 4/2.62 Selected Significant Intercepts outside resource (m/gptau) Resource Model (JORC 2012) Long Section Looking Grid North 28

29 Turner River Resources (JORC 2012) Turner River Project (JORC 2012) 0.5g/t Au Cut off Grade Deposit 100% De Grey Measured Indicated Inferred Total Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Mt Au (g/t) Au Oz Wingina Well Lode , , , ,000 Wingina Well Halo , , , ,000 Subtotal , , , ,000 Mount Berghaus , , ,000 Amanda , ,000 Turner River Project , , , ,000 Discrepancies may occur in totals due to rounding Tonnes, grade and ounces rounded to reflect accuracy of estimates 1 Resources Statement by De Grey Mining Limited as reported to the ASX on October Resources Statement by De Grey Mining Limited as reported to the ASX on January Resources Statement by De Grey Mining Limited as reported to the ASX on June

30 Turner River Extensive Gold Anomalies Tabba Tabba Mt Berghaus Wallareenya Amanda Orchard Tank Discovery Wingina West Yule Joshua 10km Gold in soil (Auppb) <3ppb 3 5ppb 5 10ppb 10 50ppb ppb >100ppb 30

31 For further information Andy Beckwith & Simon Lill De Grey Mining Ltd Phone beckwitha@crcpl.com.au Phil Retter Investor Relations NWR Communications Phone phil@nwrcommunications.com.au Office: Level 2, Suite Oxford Street Mount Hawthorn WA 6016 Website degreymining.com.au

Acquisition of Indee Gold provides scale and development momentum

ASX Announcement 9 February 2017 Acquisition of Indee Gold provides scale and development momentum ASX Code DEG ABN 65 094 206 292 COMPANY DIRECTORS Simon Lill Executive Chairman Davide Bosio Non-executive