Havilah Resources (ASX: HAV) shares will rise today as it continues to extend shallow gold in the targeted base of Tertiary clays within the confines of the West Kalkaroo conceptual starter open pit in South Australia.
Importantly, the recovery of gold from this shallow clay material has a potentially significant positive impact on the economics of a starter open pit at West Kalkaroo by providing early cashflow.
Aircore drilling has now traced the gold bearing clay layer, which occurs from 23 metres to 36 metres below surface in a distinctive darker coloured horizontal layer near the base of the Tertiary clay sequence, across four drill lines over a distance of at least 200 metres.
The latest results from the drilling include 7 metres at 0.48 grams per tonne gold from 28 metres and 4 metres at 0.69g/t gold from 27 metres.
In addition, good copper and gold intersections, typical of the known Kalkaroo Resource, continue to be returned from the underlying bedrock.
These include 29.5 metres at 1.54% copper from 103 metres and 24 metres at 0.54g/t gold from 100 metres in KKAC438 and 20 meters at 2.24% copper from 110 metres an 55 metres at 1.35g.t gold from 75 metres at KKAC349.
The holes stopped in bedrock mineralisation in most cases due to the inability of the aircore blade bit to penetrate the harder, less weathered rock at depth.
Additional drillholes are planned in coming weeks on several lines to the west of the current drilling with the objective of establishing the full extent of the shallow gold mineralisation within the confines of the conceptual stage 1 open pit design.
This drilling will be interspersed with geotechnical drilling to obtain samples for tailings dam footing testwork and also some holes for tailings dam permeability testwork.
Previous cyanide leach test results of samples recovered from the basal Tertiary clay had returned 80% gold recoveries within a comparatively rapid eight hours while consuming low levels of cyanide.
The company noted this 80% recovery rate appears to be achievable in a conventional CIP gold plant and that better dissolution of the clays may even improve recoveries.
The Tertiary clay gold mineralisation appears to form a "mushroom cloud" halo lying above and separate from the main bedrock Kalkaroo copper-gold resource.
Kalkaroo has a Measured and Indicated Resource of 124 million tonnes at 0.5% copper and 0.39g/t gold in the main copper-gold deposit and 18.6 million tonnes at 0.74g/t gold in the gold cap on top of the copper-gold deposit.
The free milling, soft gold cap contains 446,000 ounces of gold with better than 97% recoveries while copper and gold recoveries of up to 91% and 87% respectively are expected from the chalcopyrite sulphide material, which forms about 66% of the deposit.
The Life-of-Mine strip ratio of 3.2:1 allows for 5% dilution of all grade blocks while the optimised open pit to 200 metres depth captures roughly 80% of the current total resource.
Free digging material occurs to about 120 metres, or roughly the top of the chalcopyrite zone and development capital cost is estimated at approximately $500 million.
Havilah Resources' drilling has to date confirmed that the gold-bearing basal Tertiary clays overlying the main deposit at its Kalkaroo copper-gold project stretches over at least 200 metres.
Further successes from planned drilling could well establish that this resource is extensive enough to be process, supporting increases to the company's share price.
This will provide early cash flow for the company while reducing start-up risk by covering a substantial portion of the overburden removal costs for the starter open pit.
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