New South Wales focused Hill End Gold (ASX: HEG) is looking at announcing a large increase in resources in October at it its Big Nugget Hill deposit at Hargraves located 35 kilometres north of Hill End.
The company has a goal of reaching one million ounces of gold from Hargraves and Hill End Gold deposits.
Work to date from data compilation and interpretation indicates that the deposit is much larger than the current extent of drilling.
This "suggests a large increase in resources is likely with more closely-spaced drilling below 150 metres and along strike to the north and south."
The managing director of Hill End Gold, Philip Bruce, said, ”We have found that the Big Nugget Hill Deposit is much larger than the extent of drilling to date.
"We are in good position to realise our strategy of increasing the quality of our resource inventory, and the quantity to over a million ounces, to facilitate the development of a commercially viable mining project.”
Hill End, Hargraves and Windeyer tenements are located within a radius of 35 kilometres enabling Hill End to look at a profitable mining strategy for the deposits.
An initial combined Inferred and Indicated Resource for the Big Nugget Hill Deposit of 1,439,000 tonnes averaging 5.1g/t gold (234,400 contained ounces of gold) was announced in October 2010.
This estimate relates only to an 800m portion of the Big Nugget Hill Deposit to a depth of approximately 200m.
A review and re-estimate of the Big Nugget Hill resource is close to completion. Recent drilling in the Central Zone has been included.
The drilling below 150m depth below surface is still quite widely-spaced.
The re-estimate has undergone an extensive due diligence exercise and peer review, which was conducted by an independent consultant and in-house personnel.
The 2010 estimate contained 74% of the resource estimate in the low confidence Inferred Resource category.
Work to date has shown that the new resource estimate will lead to a significant upgrade of the Inferred Resources to the more confident Indicated Resource category.
Under the JORC Code, Measured and Indicated Resources can be converted to Reserves based on project development criteria, though not necessarily Inferred resources.
The updated resource estimate for the Big Nugget Hill Deposit is expected to be released within two weeks.
Further resource upgrades are anticipated. The company said since there is no geological reason why the gold mineralisation would be limited to the extent of drilling to date, work is ongoing to establish a reasonable mining scenario and to plan for appropriate drilling to test extensions.
Potential resource additions are likely from:
- infill assaying program, which has identified a low grade halo, some high grade material, up and down dip of previously reported high grade results. This may add significantly to the metal content of the deposit.
- channel sampling and near surface drilling.
- drilling along the strike of the deposit deeper than 150m below surface where drill hole spacing is quite wide-spaced.
- drilling along strike to the north (~350m) and to the south (~350m) where wide-spaced drilling has indicated that the mineralisation continues.
The company holds a minimum 85% beneficial interest in the Mining Leases in the Hill End area and the area formerly subject to Exploration Licence 2037.