The Menzies and Goongarrie Gold Projects (excluding the Goongarrie Lady Resource) is subject to an Earn-in JV with Eastern Goldfields Ltd (ASX: EGS) and is located on the Kalgoorlie-Leonora Highway 90 – 130km north of Kalgoorlie. Small scale gold mining has occurred intermittently since discovery in 1893 in these areas with the most recent open pit work completed in the mid 1980s and late 1990s. Past gold production from the projects has totalled ~1Moz.
The strategic deal covers the Intermin’s tenure and the potential to access EGS’s 1.2Mtpa Davyhurst Mill.
Terms of the JV include:
- EGS to sole fund and manage A$5.5m of exploration and development studies over 4 years to earn a 65% interest in the Menzies and Goongarrie project areas
- EGS to subscribe for A$1.5m of IRC shares
- EGS to work toward building sufficient mining inventory to enable the construction of a high grade mill in the Mount Ida / Menzies region or in close proximity for mutual benefit
- EGS to focus on grass roots exploration and resource growth at Goongarrie while providing a potential toll treatment option for IRC’s 100% owned Goongarrie Lady Resource
Both Intermin and EGS have significant land holdings in the Northern Goldfields and the collaborative joint venture will enable accelerated and focussed exploration in the Menzies and Goongarrie project areas in conjunction with EGS’s Goldfields project areas.
The joint strategy is to increase resource inventory in the Menzies and Mount Ida project areas targeting high grade open cut and underground developments to underpin construction of a low cost high grade processing facility at Mount Ida / Menzies or in close proximity. As there is no processing infrastructure in the region, this facility could meet the processing needs of both EGS and Intermin along with other third parties active in the region.
The Goongarrie project area is in close proximity by existing haul road to the Davyhurst mill and the strategy is to conduct significant exploration and resource development drilling to augment ore feed for the mill for mutual benefit.
In addition, Intermin’s 100% owned Goongarrie Lady Resource currently under Feasibility Study could potentially be processed at the Davyhurst Mill on standard commercial terms through a toll treatment agreement. Discussions with EGS are ongoing as part of the Feasibility Study.
Menzies Gold Project Geological Summary
The Menzies greenstone belt divides at Menzies into a western section continuing to the northwest and an eastern section continuing northwards to Twin Hills. The greenstone sequence consists of a lower ultramafic formation to the west overlain by meta-sedimentary rocks which are overlain by mafic intrusives and extrusives to the east. Included in the greenstone belt are the major shear zones, the Menzies Shear Zone and the Moriarty Shear Zone, which impart a strong foliation and lineation to the underlying rock.
The Menzies Shear Zone can be traced south wards to the Bardoc Deformation Zone approximately 50kms south. Metamorphic grade is high in the amphibolite facies with porphyroblastic grain textures, marked schistosity and mineral lineations.
A southerly plunging fabric is apparent in the Menzies area, where well foliated basalts, sedimentary rocks, mafic and ultramafic contacts are economically significant. In general ore zones have shallow westerly dips and alteration assemblages, comprising biotite, silica, pyrrhotite, pyrite, galena, sphalerite, arsenopyrite and chalcopyrite are typical in areas of stronger gold mineralisation. Cross cutting features and felsic porphyry intrusives are also important in terms of hosting gold mineralisation. The figure below shows the tenements with major geological rock units.
Menzies is typically marked by extensive sub parallel historical gold workings along and proximal to the major shear zones and splays. Up until WW1, approximately 653,000oz was mined underground, mostly from the First Hit, Lady Shenton and Yunndaga underground mines. The Yunndaga Mine reached a maximum depth of 600 vertical metres. Since then, recent open cut mining in the 1990’s has delivered an additional 143,000oz with most of the ore being treated at the Paddington Gold Mine.
Since acquisition the Company has been systematically re-drilling and verifying the existence of all historic resources and ensuring reported resources are in accordance with the JORC Code. The Menzies Project currently contains an Indicated and Inferred JORC 2012 Compliant Mineral Resource Estimate of 2.42Mt @ 2.20g/t Au for 171,310oz above a 1g/t cut-off (refer ASX announcement dated 8 March 2016).
All lodes are open at depth and only limited by drilling.
Recent drilling by Intermin has focused on the Selkirk and Aspacia Prospects where very high grades have been intersected. Further drilling is required to generate Resources at these two key prospects.
Goongarrie Gold Project Geological Summary
The project is located on granted Mining, Exploration and Prospecting licenses forming a contiguous land package of over 20km of strike situated 40km south of Menzies in the Eastern Goldfields of Western Australia.
The project is located at the northern end of the Bardoc Tectonic Zone (“BTZ”), a major greenstone belt between Kalgoorlie and Menzies within the Kalgoorlie Terrane of the Archaean Yilgarn Craton. The tenements border the western edge of the BTZ with all deposits on or adjacent to a major NNW trending strike parallel shear zones varying in intensity from 20-200m wide. This trend continues to the Company’s Menzies gold project area to the northwest.
The Goongarrie gold project was first mined underground when the area was discovered in 1893 and modern mining and exploration was conducted in the 1980s by Julia Mines Ltd leading to the completion of 4 shallow oxide open pits that produced ~35,000 oz from shallow open cut mines until 1989. Exploration has been conducted by a number of small companies since with the most recent work in 2011/12 by Cove Resources demonstrating the potential for further mineralisation both along strike and below the very shallow historic mines.
Recent drill intercepts from the Caledonian prospect returned:
- 21m at 3.5g/t Au from 33m
- 43m at 1.6g/t Au from 71m
- 4m at 14.9g/t Au from 38m
- 57m at 1.23g/t Au from 31m (incl. 3m at 7.2g/t)
- 3m at 12.9g/t Au from 10m
- 22m at 2.0g/t Au from 52m
Further to the South within the prospect area is the Goongarrie Lady deposit which has a JORC 2012 Compliant resource of 0.27Mt @ 2.9g/t Au for 25,000oz. The Company is currently conducting an economic assessment of the Resource and has commenced the preparation of an up to date Mining Proposal and Mine Closure Plan as part of the mining approval process. It is anticipated that mining could commence at Goongarrie upon the completion of the current mine plan at Teal.