Echo released a positive exploration update today for the next ~3.5% of the drilling program. So far only ~14% of the total 90,000 metre total program has been reported to date.
Highlights of new results from the Corboys drill program include:
• 2m @ 5.64g/t Au from 44m; including 1m @ 9.94g/t Au from 45m (EARRC0060)
• 2m @ 4.81g/t Au from 40m (EARRC0068)
• 2m @ 7.48g/t Au from 14m (EARRC0069)
• 1m @ 11.80g/t Au from 25m (EARRC0071)
• 2m @ 7.89g/t Au from 23m (EARRC0073)
• 1m @ 9.61g/t Au from 47m (EARRC0075)
• 1m @ 5.08g/t Au from 104m (EARRCD0004A)
• 2m @ 4.38g/t Au from 26m (EARRC0081)
• 1m @ 4.78g/t Au from141m (EARRCD0005)
• 1m @ 4.82g/t Au from 56m (EARRCD0014)
In a nutshell, very nice grades from largely very shallow depths.
These results are a mixture of infill and extention drilling at Corboys which is a shallow deposit over 1200m in strike length at shallow depths of largely <100m depth. The deposit remains open at depth and in all directions according to Echo.
Exploratory drilling at Corboys SE appears to have been between Corboys and Corboys SE probably to test if the two deposits are connected. Corboys SE is approximately 1400m in length of prospective strike and the main potential ore body has not yet been tested by Echo. We suspect a similar deposit to Corboys may be defined in time at Corboys SE given the historical drill intercepts.
Looking deeper into the Corboys JORC resource estimate, we discover a number of interesting facts.
The resource estimate has a cut off grade of 1g/t based on a scoping study that assumed a gold price of AUD$1600/oz, with a cash production cost ~AUD$1200/oz.
Given the gold price now trades ~AUD$2200, we consider that a lower cutoff grade could be used, say 0.5g/t. This would have the immediate effect of raising JORC resources at Corboys to a total of ~168,000 ozs (128,670 oz indicated, 39,875 oz inferred. Source: Metaliko Resources Corboys update 23/8/2016) or by almost 35% vs an existing JORC of ~125,000 ozs.
In terms of geology, Corboys lies on the regionally significant Barwidgee shear zone, which contains a number of other deposits on trend. Interestingly, Northern Star appear to be increasingly interested in this geological setting taking a stake in Yandal Resources who hold the ground immediately north to Corboys on trend with this shear zone.
We note this area has been lightly explored historically, especially at depths >100m. It will be interesting to see how the exploration program evolves and the consequent results going forward.
Disclaimer: This article is solely the opinion of the author and does not take into account your investment objectives, particular needs or financial situation; and should not be construed as advice in any way
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