Larvotto Resources latest reverse-circulation (RC) drill campaign at its Hillgrove project has kept the gold-antimony party going with further big high-grade hits rolling of the drill bit at the company’s Clarks Gully deposit, some 23 kilometres east of Armidale in northern NSW.
The company also struck visible gold in diamond core drilling at its Bakers Creek prospect within the Hillgrove project area, indicating it is onto an uber-high grade patch of mineralisation.
Management says the aim of the 4469-metre RC drill program is to infill its inferred and indicated zones of mineralisation to enable conversion to a measured 2012 JORC mineral resource category. It is also looking to extend the resource along strike and at depth and test an arsenic soil geochemical anomaly south of the existing deposit.
The company received impressive combined gold/antimony results from the assays for 40 holes returned so far which include 7m grading 22.28 grams per tonne gold equivalent, 6m going 15.5g/t gold equivalent and a further 7m running at 9.34g/t gold equivalent.
Larvotto says follow-up drilling is required to further extend the known mineralisation along strike and at depth, with an updated resource for Clarks Gully expected in the coming months.
Clarks Gully’s existing resource stands at 266,000 tonnes at 3.8 per cent antimony with 2g/t gold, for a significant gold equivalent grade of 10.6g/t when the two minerals are economically converted into a gold equivalent grade.
The drilling identified mineralisation trending deeper to the north with higher grades. Further diamond drilling will be required to ascertain the full extent of the improved grades to the north and to support the potential for underground mining.
Larvotto Resources managing director Ron Heeks said: “The drilling has confirmed the continuation of mineralisation down-dip into a previously under-explored zone which sits below and along strike from the current Clarks Gully open pit mine plan. The excellent results indicate another deeper round of drilling is required to confirm and extend the mineralisation beyond the current resource.”
Mr Heeks also said a new mineralised zone, associated with a geochemical anomaly immediately south of the planned open pit at Clarks Gully, has been identified and further drilling will be undertaken to define the mineralisation.
At the company’s prospective Bakers Creek ground, where drilling earlier this year at the Big Reef lode returned a whopping 31m intersection grading 65.8g/t gold equivalent, a diamond drill program has encountered visible gold in the first hole drilled at the Big Reef mineralised zone.
Visible gold was intersected at 308, 311m and 314m within a zone of quartz breccia and alteration.
Management says the hole is planned to a depth of 600m and is expecting to intersect more mineralisation as it drills deeper.
Encouragingly for the company, any mineralisation found at Bakers Creek sits outside the known mineral resource and offers the potential to boost the overall Hillgrove economics significantly.
Larvotto revealed a pre-feasibility study in August with compelling numbers, including a head-turning EBITDA of $652 million across a seven-year mine life with a pre-tax internal rate of return (IRR) of 80 per cent and post-tax IRR of 50 per cent.
All the numbers were predicated on very conservative prices of US$2000 (AU$3068) per gold ounce and US$15,000 (AU$23,015) per tonne of antimony, suggesting there may be some serious upside to the project using current spot prices.
The gold price today sits at US$2654 (AU$4072), with antimony soaring recently to US$33,500 (AU$51,425), providing plenty of scope for optimism about the project’s future economics.
Management is awaiting assays for a further 14 holes from the 54-hole RC program. Two diamond rigs are on site at Hillgrove and the company plans to ramp up drilling activities early next year.
Larvotto continues to find shallow gold and antimony within 120m from surface. With the company now focused on deeper diamond drilling, the Hillgrove resource which currently has Australia’s biggest antimony deposit, may just keep getting bigger – as will the economics around this project.
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By Craig Nolan
