Nexus Minerals - Nexus commences mine studies at the Pinnacles JV Gold Project
Nexus Minerals (ASX:NXM) has commenced open pit mining studies for the Pinnacles East gold project, located 10km south of Saracen's Carosue Dam Gold Operation. Work has commenced on an update to the Mineral Resources estimate, with the results to underpin studies into an opn pit scenario down to 150m vertical. Under the JV with Saracen, Nexus has an ore sales agreement for any ore mined from Pinnacles.
Nexus Minerals Limited (ASX: NXM) (Nexus or the Company) is pleased to advise it has received results from the Diamond and RC drill campaign at the Pinnacles East gold resource, within the Pinnacles JV project, located in the Eastern Goldfields, 120km northeast of Kalgoorlie (Fig. 1).
Pinnacles East Drilling The Pinnacles East gold resource extension program tested for depth and strike extensions to the south of, and beneath, high grade gold mineralisation identified at Pinnacles East to date. The 6 hole 2,241m program was a combination of RC drilling, and RC drill pre-collars with Diamond core tails.
The deeper holes under the Pinnacles East resource (which commences at surface) were targeted to intercept mineralisation at approximately 350m vertical depth, 100m below previous mineralised intercepts, which included 8m @ 7.7g/t Au, 7m @ 5.9g/t Au, 3m @ 9.8g/t Au and 4m @ 7.6g/t Au.
The drill program intersected the structure hosting the mineralisation at the depths interpreted, with the geological package of volcaniclastic sandstones, shales and conglomerates also intersected. The Pinnacles gold mineralisation is typically associated with an increase in quartz veining, chlorite alteration and increase in sulphide content.
Whilst all of these geological factors were observed, the drill results returned only narrow and low grade intersections of mineralisation in the two holes (NMPDD1 & NMPDD2) 100m underneath previous significant intercepts. The other two diamond drill holes (NMPDD3 & NMPDD4) and the two shallower RC drill holes (NMPRC12 & NMPRC13) returned no significant mineralisation (Table 1).
In its first year of evaluating the Pinnacles East gold resource since entering into the JV with Saracen Mineral Holdings Limited in late 2015, Nexus planned to drill test the depth and continuity of the potential high grade mineralisation, below a potential open cut pit, through a number of depth staged drill programs. The drill programs undertaken by Nexus this year achieved this objective by targeting mineralisation from below the known resource (130m) at 250 and 350m vertical depth, as well as testing the strike extent of the resource. These drill programs have now been completed, and the open cut potential of the Pinnacles East gold resource will now be assessed. The results of the deeper drill programs will also be integrated in future mine studies to determine the potential for the establishment of an economic underground operation.
Pinnacles East Mining Studies Advancing
Nexus will continue to determine the feasibility of the open cut potential of the Pinnacles East gold resource area, being initially from surface to ~150m - with mineralisation between ~150m and ~250m to be considered as a potential underground operation. Nexus consultants have been engaged to undertake a resource update and pit optimization study, to assist in determining the financial viability of establishing an initial open cut gold mining operation.
The current resource of 413,000 @ 2.1g/t Au for 28,000 ounces1 is from surface to 130m below surface, and nearly 94% of this resource is in the Indicated category. There are a number of significant intersections between 130m and ~250m that will be assessed in the current study, with the aim of including in the resource update, including:
- 6m @ 17.4g/t Au
- 6m @ 12.3g/t Au
- 11m @ 5.6g/t Au
- 5m @ 10.5g/t Au
- 7m @ 8.8g/t Au
The JV agreement with Saracen includes access to their mine and mill infrastructure, including haul roads, significantly reducing any CAPEX requirements. The JV agreement also includes an ore sale and purchase agreement whereby any ore2 produced from the JV tenement will be purchased by Saracen for treatment at their Carosue Dam Mill facility, 13km to the north.
Pinnacles JV Regional Drill Results in Coming Weeks The Pinnacles JV Regional program (6 hole / 850m RC drilling), was designed to test two target areas identified by recent geological / geophysical work undertaken by the Company. The first target area, GT1, is the extensive coincident chargeability high and resistivity high anomaly identified over magnetic anomalies within the “Pinnacles Corridor”. This anomaly may be related to areas of disseminated sulphides (chargeability highs) and large zones of silicification (resistivity highs) – frequently associated with gold mineralisation. The second target area, GT2, is the resistivity high centered on the Pinnacles North coincident gold / arsenic soil geochemical anomaly. It will also follow up mineralised intersections recorded in RAB drilling programs by a previous operator.
The drilling program was completed late August, with results expected to be received from mid- September 2016.
1 JORC-2012 compliant Indicated and Inferred Mineral Resource, completed by Saracen Mineral Holdings Limited, of 413,000t @ 2.1g/t Au for 28,000oz gold (see Saracen Mineral Holdings Limited’s ASX release 9 October 2014 ‘2014 Mineral Resources and Ore Reserves’ and ‘2014 Mineral Resource and Ore Reserve Statement Explanatory Notes and Table’).
2 No Ore Reserves have currently been defined on the Pinnacles JV Gold Project. There has been insufficient exploration and technical studies to estimate an Ore Reserve and it is uncertain if further exploration and/or technical studies will result in the estimation of an Ore Reserve. The potential for the development of a mining operation and sale of ore from the Pinnacles JV Gold Project has yet to be established.
The Pinnacles Project tenements cover approximately 100km2. The tenement area is immediately to the south of Saracen Gold Mines’ Carosue Dam Operation (CDO), which includes the Karari underground gold mine currently in operation.
Nexus has completed analysis of available aeromagnetic data which has yielded a coherent district and local geological framework – albeit preliminary at this stage. There is a suggested association between magnetic features and areas of mineralisation, with the proximity to north south striking faults being a significant factor. Areas of exploration interest are proposed based on multiple factors culminating in “Weights of Evidence” anomalies.
Gold deposits immediately to the north of the Nexus Regional tenement package, including Karari and Whirling Dervish, occur within volcaniclastic sediments. This key stratigraphy can be successfully defined by gravity data displaying as a gravity low. Many of the gold deposits in the Carosue district display the following features:
1) Hosted in volcaniclastic sediments;
2) Occur in an area displaying gravity low; and
3) Are generally coincident with, or proximal to, north south striking faults
Nexus will use these three main “ingredients” in the company’s regional gold exploration activities.