Alchemy’s Bryah Basin Project comprises a 527km2 ground package, located 130km NE of Meekatharra, highly prospective Bryah Basin region, Western Australia. The Project is located along strike and west of Sandfire Resources NL’s (ASX: SFR) high-grade DeGrussa and Monty copper-gold deposits, and adjacent to Peak Hill where about 1Moz of gold has been mined from several deposits (Fig. 1). Alchemy holds 100% interest in the project with the exception of several tenements held in joint venture (Alchemy 80%) with Fe Ltd (ASX: FEL). Alchemy retains its interests in the base metal and gold prospective Bryah Basin Project through farm-in and joint venture agreements with Independence Group NL (ASX: IGO) (“IGO”) and Billabong Gold Pty Ltd (“Billabong Gold”).
Alchemy retains a 1% Net Smelter Royalty over 20,000oz of gold recovered from the Hermes Deposit (3.3Mt @ 2.0g/t for 212,000oz Au) once production reaches 70,000oz (ref. Alchemy ASX announcement dated 24 February 2015).
Figure 1: Bryah Basin Project – IGO JV and Billabong Gold JV areas and gold and base metal prospects.
Base Metals Exploration (IGO earning up to 80%)
Leading Australian base metal and gold producer IGO is exploring and earning an interest in the whole and part tenements that cover the base metal prospective area of the Bryah Basin Project. Under the terms of the agreement with IGO, IGO can earn up to 80% in Alchemy’s interests (excluding iron ore rights) through Earn-In Expenditure of $6M within five years (effective date 10th April 2014), with Alchemy free-carried on further exploration to completion of a Pre-Feasibility Study and then carried on an interest-free deferred basis for a further $5M of Definitive Feasibility Study expenditure.
The IGO JV area contains more than 40km of strike extent of the Narracoota – Karalundi volcano-sedimentary sequence, host to Sandfire Resources’ DeGrussa copper-gold deposit and the high-grade Monty copper-gold resource (Fig. 1), and prospective for discovery of VMS-style copper-gold deposits.
Independence has extensive VMS exploration and discovery experience and is applying its state-of-the-art geophysical tools and renowned in-house geological team to comprehensively evaluate the prospective Narracoota– Karalundi stratigraphy on the farm-in tenements.
Gold Exploration (Billabong Gold earning up to 80%)
Exploration of Alchemy’s whole and part tenements that cover the gold prospective part of the Bryah Basin Project (Fig. 1) continues under a farm-in and joint venture arrangement with Billabong Gold (“Billabong Gold JV”). Under the terms of the agreement Billabong Gold can earn a 70% interest in Jackson Minerals tenements and an 80% interest in Alchemy tenements by funding $1,200,000 of exploration within 3 years (effective date 23 Feb 2015).
Upon fulfilment of the earn-in expenditure, Alchemy’s interest is carried on an interest-free deferred basis to production, with Alchemy to repay the deferred amount at the rate of 50% of its share of free cash flow from production following commencement of mining.
The Billabong Gold JV currently has a JORC 2004 Indicated Resource of 87,373 ounces of gold (1.36Mt @ 1.99g/t Au) at the Wilgeena Prospect. The mineralisation is open at depth and further drilling has excellent potential to expand the area of gold mineralisation and add to the known resource.
Wilgeena Gold Deposit
At Wilgeena, five stacked mineralised zones have been defined by drilling to date. The zones strike approximately east-west, dip to the south at about 45 degrees, and plunge steeply to the east (Fig. 2).
Figure 2: Wilgeena gold deposit – Indicated Resources 3D Oblique view and open targets
The mineralisation is open at depth at Wilgeena and further drilling has excellent potential to add to the known resource and expand the area of gold mineralisation outside of the Indicated Resource.
Metallurgical test-work undertaken on oxide core material from Wilgeena, obtained from the diamond drilling program in 2010, indicates that the ore is amenable to treatment in a conventional crush, grind and CIL plant with good recoveries across all size fractions. A high proportion of gold is contained in the coarse fraction, and the test-work indicates that a large percentage (40-60%) of the free gold at Wilgeena could be recovered by gravity concentration. No technical issues have been identified that would result in a poor recovery or extenuating cost issues.
Seaborg and Central Bore Gold Prospects
The Seaborg and Central Bore gold prospects, located about 15 kilometres to the north-east of the Wilgeena gold deposit (Fig. 1), are two high priority targets that have returned high-grade gold intercepts in drilling.
Gold mineralisation at Seaborg is in high grade mineralised zones (>5g/t gold) within a broad (20-50 metre thick) lower grade gold mineralised envelope (Fig. 3), associated with a series of northeast-trending veins and structures in meta-sedimentary rocks. The gold mineralisation occurs from surface, and to date has been intersected by drilling to a vertical depth of approximately 75m, within the oxidised zone.
RC and RAB drilling completed to date at the Seaborg Prospect has returned high-grade gold results including:
27 metres at 5.43 g/t gold from 15m (historic drill hole)
51 metres at 3.71 g/t gold from surface (CBRB001)
23 metres at 3.16 g/t gold from 16m (CBRB002)
6 metres at 4.17 g/t gold from 9 metres (CBRC062)
Figure 3. Seaborg gold prospect – Section 697850mE showing drill hole intercepts (>1.0g/t gold) within the mineralised envelope.
Gold mineralisation at the Central Bore gold prospect is associated with a series of northeast-trending veins and structures in granite. Assay results from drilling, including screen fire assays for selected high grade samples, include best intersections of:
9 metres at 5.86 g/t gold from 35 metres (CBRC004)
9 metres at 3.79 g/t gold from 49 metres (CBRC004)
20 metres at 1.99 g/t gold from 32 metres (CBRC005)
2 metres at 10.64 g/t gold from 80 metres (CBRC005)
4 metres at 5.35 g/t gold from 86 metres (CBRC005)
8 metres at 2.48 g/t gold from 61 metres (CBRC011)
3 metres at 3.80 g/t gold from 80 metres (CBRC011)
15 metres at 1.90 g/t gold from 96 metres (CBRC011)
16 metres at 2.48 g/t gold from 86 metres (CBRC018)
4 metres at 25.79 g/t gold from 125 metres (CBDD002)
14 metres at 3.24 g/t gold from 44 metres (CBRC035)
13 metres at 1.41 g/t gold from 80 metres (CBRC035)
3 metres at 9.12 g/t gold from 123 metres (CBRC038)
9 metres at 4.80 g/t gold from 140 metres (CBRC045)
The recent and previous drilling at Central Bore indicates that the high-grade gold mineralisation may form parallel shoots that plunge to the south-east.
Based on drilling results to date, gold mineralisation at the Seaborg and Central Bore gold prospects remain open at depth and along strike. Further targeted RC and diamond drilling has the potential to expand the areas of gold mineralisation outside of the known mineralised areas.
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Leigh Ryan, who is the Managing Director of Alchemy Resources Limited. Mr Ryan is a Fellow of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC Code 2012’). Mr Ryan consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources at the Wilgeena Gold Deposit is based on information compiled by Simon Coxhell, who is an employee of CoxsRocks Pty Ltd, a consultant to Alchemy Resources Limited, and fairly represents this information. Mr Coxhell is a Member of the Australian Institute of Geoscientists and the Australasian Institute of Mining and Metallurgy and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the Joint Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC 2004’). Mr Coxhell consents to the inclusion in this report of the matters based on information in the form and context in which it appears.
Alchemy confirms that the Exploration Results and the Indicated Mineral Resource at the Wilgeena Gold Deposit were prepared and first disclosed under JORC 2004. These have not been updated since to comply with JORC 2012 on the basis that the information has not materially changed since last reported on 22 October 2012, and is not aware of any new information or data that materially affects the information included in that announcement and that all material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed.