Sirius Resources managing director Mark Bennett said today the company could be a gold miner before it becomes a nickel producer, following positive drilling results at its Baloo deposit.
“It has every ingredient going for it,” Mr Bennett said today when asked about Baloo.
The company announced this week the latest assays from its aircore drilling had identified the best gold intersections yet at Baloo, which is part of the company’s Polar Bear project.
The first diamond drill hole, which can penetrate deeper, is currently under way, with assays expected next week.
The company is continuing to drill north and south of Baloo, and has expanded its ground holding in the district, applying for an exploration licence covering about 250 square kilometres.
Mr Bennett said Baloo was in an unusual geological setting that was different to most of the known gold deposits in the eastern Goldfields, and represented a new opportunity in an area not previously considered prospective for gold.
Speaking at a business breakfast today, he said the worst case scenario for Sirius was an oxide open pit.
‘‘The gold deposit starts two-and-a-half metres down and its 50 metres wide and three (metres) deep,’’ Mr Bennet said, adding that the gold could be toll-treated by existing operators at a very good margin.
“The big question for us now is whether it will be a baby mine, or whether it will be a monster.”
Mr Bennett said the biggest constraint was the small number of lightweight rigs that could drill on the bed of Lake Cowan, a dried-out salt lake.
“There are only probably half a dozen rigs in the country that can do that,” he said.
“Our biggest challenge is getting more, which is why we’re considering helping people to build more.”
Sirius is best known for its $443 million Nova nickel project, with construction getting under way in January and first concentrate due to be produced by late 2016.
Mr Bennett said Sirius was continuing an active exploration program, because he didn’t want to the company to be a victim of the malaise that often sets in between exploration success and first production.