Northwest Resources (ASX: NWR) has received final antimony assays from diamond drilling at its Blue Spec and Gold Spec gold-antimony projects in Western Australia that show grades well above the modelled grades for each deposit, particularly at Gold Spec.
The antimony assays also complement the high grade final gold assays for the two projects.
Highlights from Gold Spec include 8.4 metres at 26.58 grams per tonne (g/t) gold and 4.96% antimony from 145 metres, and 2.4 metres at 15.06g/t gold and 4.58% antimony from 217 metres.
At Blue Spec, drilling returned a notable intercept of 4.7 metres at 14.64g/t gold and 2.39% antimony from 368 metres.
The higher grades will enable a cleaner, more valuable concentrate to be produced and allow more gold to report through to the saleable product through blending.
To assist in forecasting and product estimation, Northwest plans to produce an independent antimony model for both Blue Spec and Gold Spec.
This modelling will show internal antimony grade trends independent of the gold trends and, in particular, will remove some of the effects of the near surface lower grade drilling at Gold Spec conducted in 2011.
Both Gold Spec holes intersected a strongly mineralised zone of brecciated, stibnite-bearing quartz reef about 40 metres and 100 metres, respectively, from the base of the historical workings at the 120 metre VD level.
This zone is typical of the high grade component of the Gold Spec ore body.
Meanwhile, the hole at Blue Spec intersected a very strongly mineralised zone of massive stibnite and stibnite-bearing quartz reef around 70 metres from the base of the historical Anglo-American workings at the 320 metre VD level.
The intercept is hosted in coarse grained, quartz-rich sandstone which represent a strong contrast to graphite-rich siltstones which host the majority of the Blue Spec Shear mineralisation.
The quartz-rich sandstones are also being recognised as an additional control on splay lode mineralisation at Blue Spec.
The Blue Spec project will be one of the highest grade (~16g/t gold) and lowest cost (~$400 cash costs) underground gold operations in Australia.
The current combined Blue Spec and Gold Spec Resource is 646,000 tonnes at 15.8g/t gold and 1.2% antimony for 328,000 ounces of contained gold and 7,900 tonnes of contained antimony.
The Blue Spec project will be a substantial gold producer (~70,000 ounces gold per annum av. LOM) with valuable antimony by-production (~2,000 tonnes per annum).
A previously completed Scoping Study has confirmed low technical risks and high additional exploration potential.
Under the study released in September 2012, Blue Spec would return a Net Present Value of $137 million over an initial mine life of five years. The project could be in production in late 2013, or early 2014.
Importantly, there is still exploration upside with a 14 kilometre highly mineralised shear that has demonstrated potential to host multiple ore bodies.
There is the potential to double the initial five year mine life.
Strong offtake interest
Northwest has had strong interest from some of the largest Chinese antimony producers. Potential off-take partners are also substantial gold producers.
Metallurgical testwork indicates a very clean concentrate can be produced with gold levels attracting premium pricing.
Similar antimony-gold concentrate has been sold from the Costerfield mine in Victoria to a Chinese smelter since 2007.
Northwest held around A$2.4 million in cash at the end of December 2012.
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