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Lefroy sniffs big gold trend at Mt Monger fault

ASX-listed Lefroy Exploration has completed a major step-out aircore drilling program at its Eastern Lefroy gold project near Kambalda in the venerated Yilgarn block of WA, with multiple gold trends having been encountered and providing plenty of gold sniffs to spur on its big exploration campaign.

The Perth-based gold explorer, having peppered its ground holdings with 279 holes totalling 12,436m in the latest round of AC drilling, has been testing early-stage and conceptual targets at the Lucky Strike and Hang Glider Hill prospect areas.

In May, Lefroy released a maiden near-surface mineral resource estimate for the Lucky Strike deposit of 1.27 million tonnes grading 1.95 grams per tonne for 79,600 ounces of contained gold.

Lefroy says the new drilling work at Lucky Strike has delineated multiple highly oxidised banded iron formations, or “BIFs”, that establish continuity of the host geology for gold mineralisation by a further 700m immediately along strike of the resource. According to the company, this gives it confidence that the BIF package continues along the remaining 1.3km strike of the trend.

Complementing the AC campaign is an auger drilling program currently in progress targeting the 17km of strike between Lucky Strike and Hang Glider Hill. These reconnaissance geochemical exploration programs are essentially early-stage programs designed to highlight gold anomalies for follow-up drill testing and build the company’s understanding of the geology.

Lefroy now plans to test the entire newly identified BIF gold trends with a combination of regularly spaced AC and focused RC and diamond drilling programs, which are expected to kick off in the December quarter.

Eastern Lefroy exploration in the past year has focused on increasing our knowledge of the locations where we demonstrated early success. This strategy defined gold resources sufficient for exploitation – which we are now pursuing – but left very large areas of our tenement parcel unexplored.

This latest round of exploration has consisted mainly of sampling the regolith beneath the transported cover to advance our understanding of the overall prospectivity of our areas. We will now focus exploration on the emerging trends which are located adjacent to the regional Mt Monger fault, where a major auger sampling campaign is currently underway.

The company’s priority Lucky Strike exploration hub hosts the Lucky Strike and Red Dale deposits and is situated not far from Silver Lake Resources’ Randalls gold processing plant about 50km south-east of Kalgoorlie.

Lefroy’s greater Lefroy project sits near Gold Fields’ St Ives gold camp, which contains the Invincible gold mine located in Lake Lefroy, and south of Silver Lake’s Daisy Milano gold mining operation.

Gold Fields can earn up to a 70 per cent interest in Lefroy’s Western Lefroy package of tenements by spending up to $25 million on exploration within six years of the farm-in commencement date of June 2018.

According to Sydney-based broking firm Bridge Street Capital Partners, Lefroy “has a number of toll-milling opportunities”. The Kalgoorlie South region has at least five treatment plants within economic trucking distance including St Ives, Randalls, Jubilee and Lakewood.

The brokers said recently: “We’d be surprised if Lefroy can’t do an attractive deal with one of these operators, several of whom we would guess might be struggling to find their own reserves (and more particularly oxide reserves) over the next year or two.”

“The bulk of Lucky Strike’s resources are oxide … a toll milling outcome could derive a ‘netback’ to Lefroy of around A$45 per tonne, multiplied by 750,000t equates to a potential gross cash flow of a total of over $30 million. CAPEX should total no more than $2 million. To stress, these are estimates and have not been tested with local operators, but we believe these numbers are of the right order of magnitude. The options here should emerge over the next quarter or two.”

If its methodical and measured exploration approach can ultimately lead to material increases in the Eastern Lefroy project’s resource inventory, Lefroy may be looking at a low CAPEX entrée to gold production while keeping the drill bit firing across its substantial landholdings around the Mt Monger fault.

Is your ASX listed company doing something interesting? Contact: matt.birney@wanews.com.au

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