As per RBA’s June 2019 report, Gold accounts for Australia’s fifth largest resource export (by value). Gold has steered up the national exploration expenditure in Australia since 2016, accounting for two-fifths of the total exploration expenditure in 2018, thereby presenting a positive outlook for the gold mining companies in Australia.
Let us dive deep into a base metal focussed company with exploration assets in Western Australia- Surefire Resources NL (ASX: SRN), that has recently reported significant results for the maiden RC drilling program on gold targets at Victory Bore Project.
RC Drilling Results at Victory Bore Project
SRN owns Victory Bore gold-vanadium-iron-titanium Project, 40km south-west of Sandstone. On 11 October, the company reported completion of RC drill program, wherein 29 holes were drilled over a 3.5 km x 800m area for 2,256m. The drilling program involved testing seven target areas demonstrated by major anomalous gold and coincident geophysical anomalism.
The exploration at the Project was initiated in the month of September and was concluded in the early October 2019, drilling to a maximum depth of 96m downhole. The collected samples (ranged 1m-4m) from drilling were transported for gold and multi-element analysis to Australian Laboratory Services (ALS) in Perth.
SRN has now received several significant and highly anomalous gold assays for the 29 drilled holes; the best assays are tabulated below:
SRN conducted the drilling program with the following objectives-
- to confirm high-grade historic drill intercepts and
- to test the trend of a mineralised corridor established by previous drilling and interpretation of aeromagnetic imagery.
A closer look at the results indicates highly anomalous and significant gold assays returned by the drilling. While the gold assays were not being able to replicate the high-grade results obtained from the historical work, SRN noted that the local gold mineralisation at Victory Bore may not be contiguous.
However, SRN is optimistic that there persists excellent potential along the Youanmi trend to yield further gold mineralisation and drill targets. With this belief, SRN has warranted further work to clearly define these drill targets and enhance the resolution of the anomalies through further geochemical sampling.
SRN also intersected several vanadium bearing magnetite units; significant intercepts are shown in the table below:
Other encounters in the process of RC drilling are as follows:
- The weathering zone encountered was typically shallow with a narrow saprolite zone,
- The lithologies intersected were predominantly the magnetite bearing gabbro-norites of the Atley Intrusion, a layered mafic intrusive complex which is host to very large tonnage vanadium-titanium-iron resource,
- Almost every drill hole intersected disseminated to matrix magnetite bearing gabbro with assays.
Historic Regional Drilling
Going back to 2016, SRN carried out an RC drilling based on geochemical Mobile Metal Ion (MMI) soil anomaly at its Unaly Hill Gold Project wherein a total of seven RC holes were drilled across the three target areas with a total of 472m. A peak result of 1m @ 2.87 g/t Au from 51m was seen in UHRC025 as part of the RC drilling investigation at Target 3.
As defined by historic geochemical RAB drilling and historic and recent soil sampling, the Unaly Hill Project and the Victory Bore Project both straddle the regionally significant Youanmi Fault with gold occurrences evident along a 16km of strike. A large part of this has only been tested with shallow, occasionally ineffective drilling, and SRN aims to conduct significant work in future to better define these targets.
Prospective Northern Targets
SRN possesses several areas of structural complexity with prospective targets for gold mineralisation to the north of the current drilling program. The prospective target areas constitute of the ore-forming fluids with the ability to use deposit gold mineralisation and low-pressure dilation zones within shears and faults. Over the course of the RC drilling program, SRN carried out the reconnaissance exploration of target Two.
Further, a major development for the company was the discovery of the occurrence of several sub-cropping quartz veins along banded iron formations (BIF) and sub-cropping tholeiitic basalt units.
SRN aims to analyse the best possible way to carry out geochemical evaluation of these targets and further plan the subsequent phase of field programs to coincide with follow up sampling and evaluation of the pending RC drilling assays.
Global Gold Demand Outlook
China and India are believed to be the largest markets for gold jewellery. Considering the outlook for the population growth and the likeliness for the citizens of these countries to become wealthier, the longer-term demand outlook for gold appears encouraging for the gold mining companies. In addition to this, demand for gold is also driven by its broad use for portfolio diversification and as a store of value from historical times. As per RBA, this continues to steer investor demand for gold bars and coins, and increasingly exchange-traded funds.
During the day’s trade on 14 November 2019, SRN stock closed at a price of $0.003 with a market capitalisation of $1.88 million.
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