OzAurum Resources (ASX: OZM) is ramping up development of the Mulgabbie North gold project in Western Australia with a large-scale grade control drilling program underway.
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CEO and MD, Andrew Pumphrey, said the commencement of the drilling program represents another significant step in advancing Mulgabbie North toward development and ultimately gold production.
The reverse circulation (RC) drilling will target the Paleochannel prospect within the stage 2 pit designs and forms a key component of an ongoing heap leach feasibility study.
“Paleochannel open pits have been the source of low-cost ounces for many gold mining operations in the Kalgoorlie area, including Kanowna, Higginsville and Mt Pleasant, which were highly profitable for the companies mining these types of deposits,” Mr Pumphrey said.
“Resource drilling typically underestimates the contained gold in Paleochannel gold systems because of the high=grade nature of this style of gold mineralisation.
“Our previous drilling has delivered excellent shallow high-grade results, and this grade control program is designed to increase our confidence in that mineralisation within the Stage 2 pit designs.”
Mr Pumphrey told shareholders that importantly, the drilling may also demonstrate that parts of the paleochannel mineralisation could support stand-alone mining scenarios, providing OzAurum with additional development flexibility and the potential for early cash flow generation.
“With a strengthened balance sheet following our recent strategic investment by Forrestania Resources, ongoing heap leach plant refurbishment, and now the commencement of this drilling campaign, we are building strong momentum as we progress toward a capital-light pathway to gold production in a very strong gold price environment.”
The company recently completed a $4.1 million strategic placement to Forrestania supporting the advancement of near-term production initiatives at Mulgabbie North.
Kalgoorlie-based VM Drilling has been awarded the 18,000m grade control RC drill program, accepting payment in fully paid ordinary shares in the capital of the OzAurum.
OZM is up 10.0% to 11.0¢. Mkt cap $28.61M.
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