No Fading for DeGrey at Mallina Prospect




DeGrey Mining (DEG) has given a big hint that a small but interesting deposit in its Mallina gold prospect in the WA Pilbara, is about to get larger and more important.

DEG quietly revealed this week that it had made more interesting intersections of gold at the Toweranna prospect which lies to the west of the main discovery at Mallina, the world class Hemi deposit

Toweranna is in fact the initial gold discovery that led DeGrey to find the Hemi prospect in late 2019.

Toweranna has an existing mineral resource estimate (MRE) of 525,000 ounces, consisting of 6.8 million tonnes @ 2.1 grams to the tonne of gold (g/t Au) for 460,000 ounces in open pit resources and 600,000 tonnes @ 3.6g/t Au for 65,000 ounces in underground resources.

DeGrey said, "Toweranna contributed 250koz of mineable resource from open pit mining to the production profile of Hemi in the 2022 prefeasibility study” which gave a resource figure for the series of deposits of 10.6 ounces of gold.

Beside the small contribution from Toweranna, the main find is at Hemi with an estimated 8.5 million ounces, then there’s Withnell with 1.6 million and Wingina with 500,000 oz. A map from DEG with the ASX filing named 17 areas of interest along an estimated 150-kilometre line at Mallina.

As part of the Definitive Feasibility Study (DFS) for the Mallina project this round of drilling by DEG at Toweranna has focused on delivering a resource upgrade, including improvements to the company’s geotechnical modelling and metallurgical characterisation.

"The DFS stage of drilling is now complete and De Grey will commence drilling aimed to discover extensions and new zones of mineralisation,” DeGrey told the ASX.

With DFS drilling now complete, regional work will be focused on exploration aimed at increasing resources and discovering new mineralisation at Toweranna as well as the surrounding district.

Diamond drilling to follow up on previously reported mineralisation at Charity Well, located 4km to the north of Toweranna is ongoing, with RC drilling (reverse cycle) to start in the near future. In addition, an aircore program to test easterly extensions of Charity Well (another area of interest nearby) was recently completed, with results expected shortly.

DEG described the results of the drilling and resource extension as “High Grade” and included up to 10 metres at 13.2 grams a tonne grade of gold from 288 metres, including two metres at 64.2g/t gold from 288 metres, the miner said in the statement.

There was a further 6 metres @11.3g/t of gold from 216 metres and 5metres of 12.8 g/t gold from 234 metres in another hole. The was a further intersection of 13.1 metres at 5.4 g/t gold from 193 metres and 12 metres of 3.5 g/t gold from 314 metres.

But most interesting was the results of a hole drilled outside the known resource area which returned an 41.5 metre intersection of 4.7g/t gold from just 12 metres deep.

De Grey General Manager Exploration, Phil Tornatora, said in the ASX report that

“The new resource definition and extensional drilling results at Toweranna demonstrate the high-grade nature of mineralisation within the overall intrusion. These results also point to resource extensions. Exploration will now focus on delivering on that potential.

“New drilling results and technical studies will be incorporated in an updated resource estimate and contribute towards development of a maiden reserve at Toweranna for the DFS currently in progress and scheduled for completion mid-2023.”

Interestingly DeGrey said the ore in the Toweranna deposit could be cheaper to process to extract more gold than previously thought which in turn would see lower costs.

"For some time the Company has considered that Toweranna mineralisation could be amenable to ore sorting. This is based on the distribution of gold bearing minerals within the overall Toweranna intrusion ground mass being associated with coarse sulphide mineralisation and quartz veining.

"The use of ore sorting has the potential to significantly reduce operating costs per ounce of gold produced from Toweranna by reducing ore haulage costs between Toweranna and Hemi, as well as processing costs at Hemi.

"Ore sorting also has the potential to significantly increase the grade of ore processed from Toweranna at Hemi and to increase the annualised gold production at Hemi while upgraded Toweranna ore is processed.”

"The Company will continue metallurgical testwork of mineralisation from Toweranna to optimise the process route, operating costs, production schedule and resource to reserve conversion. Ore sorting is not being contemplated for other deposits at Hemi.”

DeGrey shares fell 0.6% to $1.54.


Name Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.