Shares in De Grey Mining (ASX: DEG) sky-rocketed 150% after the company emerged from a trading halt this morning with news of a gold discovery at its Pilbara gold project.
Western Australian-based De Grey Mining reported it had uncovered an outcropping conglomerate which included 91 gold nuggets in a separate area of its Pilbara gold project.
Named Loudens Patch, the new conglomerate was detected at the base of Mt Roe Basalt and is 1.5km long in strike, 400m wide, and up to 10m thick.
Many of the gold nuggets found at Loudens Patch were shaped like watermelon seeds with a pitted texture. This is typical of palaeo-placer gold deposit and comparable to Witwatersrand-style gold mineralisation.
The South African-based Witwatersrand deposit is renowned for hosting the world’s largest gold reserves.
Speaking with Small Caps De Grey Mining executive chairman Simon Lill said the market had reacted “extremely positively” to the discovery.
Building on this, he urged the market to also remember De Grey Mining had already firmed-up more than 1 million ounces in JORC-compliant gold resources.
“This is not just speculative exploration, based on the Novo story,” Mr Lill added.
A little more than four weeks ago, De Grey Mining announced it had identified the 12km Mt Roe Basalt gold conglomerate.
These recent discoveries are in addition to the Pilbara project’s known existing resources of 18.84Mt at 1.7g/t Au for 1,002,300oz. As part of its exploration program, initial reconnaissance mapping, geochemical sampling and metal detecting are underway on the eastern and western sides of a Loudens Patch and the recently identified 12km Mt Roe Basalt target.
Once complete, De Grey Mining outlined it would conduct a similar drilling program to TSX-listed Novo Resources Corp, including an initial diamond drilling campaign to define the conglomerate followed by wide diameter RC drilling.
Also commenting on the discovery, De Grey Mining operations manager Andy Beckwith said Loudens Patch ranked with Novo’s Comet Well and Beatons Creek, as well as Novo’s joint venture prospect, Purdy’s Reward (Novo and Artemis Resources) for gold potential.
“Any new high-grade resource, large or small, will provide a tremendous economic advantage to our planned Pilbara gold development based on our existing 1 million ounces of gold resources,” he added.
Under a Heads of Agreement inked with Northwest Nonferrous Australia Mining’s (NNAM) wholly-owned subsidiary Indee Gold in January this year, De Grey Mining has until July 2018 to pay Indee Gold the remaining $14.9 million to safeguard its 100% stake in the Indee gold project which hosts Loudens Patch.
Emerging gold hot spot
In recent months, Western Australia’s Pilbara has been a hot spot for gold discoveries, with Novo (TSX: NVO) heading the charge.
Artemis Resources (ASX: ARV) has a joint venture over the Purdy’s Reward prospect with Novo and has enjoyed a recent spike in its stock with its price jumping more than 35% since Thursday 21 September 2017.
This rise comes after Novo announced on Thursday that Artemis and Novo had received approval to begin a drilling campaign at Purdy’s Reward, which was planned to kick-off today.
Calidus Resources (ASX: CAI) also emerged from a trading halt this morning with news its recent placement was “heavily oversubscribed”. Calidus’ stock was up more than 13% in early morning trade on the news. Calidus will be raising $10 million to fast-track its Warrawoona Project, which is situated along the Warrawoona greenstone belt in WA’s east Pilbara.
Meanwhile, Kairos Minerals (ASX: KAI), Venturex (ASX: VXR), and Haoma Mining (ASX: HOA) have all been enjoying the gold rush with Kairos stock up 150% in the last five days.
Venturex shares were up 40% in morning trade today, while Haoma Mining stock surged more than 50% before midday.
Despite the potential 50% gold royalty hike hanging over their heads, investors appear to be still taking a shine to the Pilbara-focussed precious metal explorers.