In its announcement of 22 October, Alkane reported the assay results of an additional four DD holes and an additional three RC holes at its Boda prospect at its Northern Molong Porphyry Project. The drilling is part of a 30,000m diamond and RC core exploration programme that began in July 2020 to test the dimensions and extensions to the large, low-grade mineralised envelope at Boda, as well as any internal high-grade zones.
In general, the Boda porphyry system is a series of near-vertical, northwest striking, intrusive related breccias hosted within a thick sequence of shallowly east-dipping andesite lavas. These magmatic breccias are hydrothermal in nature and zone towards higher gold-copper grades when associated with a chalcopyrite±pyrite dominant cement. Exploration to date has identified that the northeast shoulder of Boda (see Exhibit 2) in particular has a shallow blanket of epithermal gold mineralisation associated with colloform quartz-carbonate veining and abundant pyrite, with gold grades as high as 18.6g/t (included in hole KSDD042) and it is this area of the deposit that all seven holes were designed to test.
A summary of the seven drill holes – totalling 5,322m (or 760m per hole) – is as shown in Exhibit 1.
Exhibit 1: Boda drill hole assay results
|
From (m) |
To (m) |
Average intercept (m) |
Average gold grade (g/t) |
Average Cu grade (%) |
Previously announced DD results |
|
|
653.2 |
0.26 |
0.12 |
Previously announced RC results |
|
|
259.7 |
0.21 |
0.12 |
Previously announced all holes |
|
|
539.5 |
0.25 |
0.12 |
BOD054 |
21.0 |
163.0 |
142.0 |
0.21 |
0.15 |
BOD055 |
9.0 |
345.0 |
158.0 |
0.46 |
0.09 |
KSDD040 |
110.0 |
1,185.0 |
1,012.0 |
0.28 |
0.14 |
KSDD041 |
4.0 |
859.0 |
414.0 |
0.26 |
0.12 |
KSDD042 |
116.0 |
927.0 |
756.0 |
0.37 |
0.16 |
KSDD045 |
10.0 |
840.0 |
774.0 |
0.29 |
0.14 |
KSRC044 |
63.0 |
298.0 |
134.0 |
0.28 |
0.22 |
New DD results |
|
|
739.0 |
0.30 |
0.14 |
New RC results |
|
|
144.7 |
0.32 |
0.15 |
All DD results |
|
|
662.7 |
0.26 |
0.12 |
All RC results |
|
|
238.1 |
0.22 |
0.12 |
All holes |
|
|
532.1 |
0.26 |
0.12 |
Source: Alkane Resources, Edison Investment Research. Note: RC holes denoted RC and BOD.
Gold and copper intercepts were calculated using a lower cut of 0.1g/t Au and 0.05% Cu, respectively. Internal dilution (<cut-off) is less than 15% of reported intercepts. True widths are estimated as approximately 50% of intersected widths (see Alkane’s announcement).
At least four mineralised intrusive breccias have now been identified central to the Boda mineralisation, with drilling conducted with 50m spaced southwest-oriented drilling traverses with nominal 100m spaced drill holes (see Exhibit 2) to determine the strike and dip extensions of the deposit. Note that for the purposes of Exhibit 1, multiple intersections have been amalgamated and grades averaged according to the width of the individual intersections. In general, it may be seen that the four new DD holes reported widths of mineralisation that were wider and higher grade than those of previous holes, while the three RC holes reported widths that were narrower than previous holes, but grades that were, on average, higher than both previous RC holes and (unusually) the current round of diamond drill holes as well. As previously, the fact that DD holes continue to demonstrate wider overall intersections than their RC counterparts and extend to greater depths at higher grades may be attributed to the zonation of the system and the fact that the RC drill holes are testing the upper part of the system, where grades are anyway anticipated to be lower (as is typical of this type of porphyry system).
Exhibit 2: Boda, Boda Two and Boda Three prospect drilling
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|
|
Full details of the assay results are included in Alkane’s announcement. However, a summary of the significant intersections from the diamond core drilling is:
•
848m grading 0.29g/t gold and 0.17% copper, including
•
19m grading 1.36g/t Au and 0.51% Cu
•
14m grading 1.42g/t Au and 1.03% Cu from 753m
•
676m grading 0.39g/t Au and 0.16% Cu, including
•
1m grading 9.38g/t Au from 281m
•
30m grading 1.29g/t Au and 0.21% Cu
•
11m grading 1.24g/t Au and 1.66% Cu
•
11m grading 2.88g/t Au and 1.03% Cu, including
•
1m grading 18.6g/t Au, 1.70% Cu
•
679m grading 0.30g/t Au and 0.15% Cu, including
•
21m grading 1.11 Au and 0.28% Cu
•
8m grading 2.17g/t Au and 0.90% Cu.
Significant intersections from the RC drilling included:
•
9m grading 1.09g/t Au and 0.43% Cu
A brief comparison between the results of the most recent assay results relative to those of comparable earlier holes – where comparison is possible – is provided in the table below:
Exhibit 3: Recent Boda assay results cf comparable earlier results
Recent hole |
|
Prior comparable hole |
Hole |
Intersection (m) |
Average gold grade (g/t) |
Average Cu grade (%) |
|
Hole |
Intersection (m) |
Average gold grade (g/t) |
Average Cu grade (%) |
KSDD042 |
756.0 |
0.37 |
0.16 |
|
KSDD034W2 |
655.0 |
0.12 |
0.13 |
|
|
|
|
|
|
|
|
|
KSDD040 |
1,012.0 |
0.28 |
0.14 |
|
KSDD031 |
407.2 |
0.77 |
0.31 |
KSDD041 |
414.0 |
0.26 |
0.12 |
|
KSDD028 |
839.0 |
0.38 |
0.17 |
KSDD045 |
774.0 |
0.29 |
0.14 |
|
KSDD029 |
220.3 |
0.22 |
0.14 |
BOD054 |
142.0 |
0.21 |
0.15 |
|
|
|
|
|
BOD055 |
158.0 |
0.46 |
0.09 |
|
|
|
|
|
KSRC044 |
134.0 |
0.28 |
0.22 |
|
|
|
|
|
Source: Alkane Resources, Edison Investment Research
Note that hole KSDD028 is significant for comparative purposes in that it was designed to intersect the north-west striking orebody at approximately 90°. The hole, collared in outer propylitic alteration, intersected a gold mineralised pyrite-sericite shell for approximately 300m downhole, which zoned in to extensive calc-potassic alteration with gold-copper (Au-Cu) mineralisation centred around a high-grade Au-Cu breccia. The breccia showed apparent sulphide zonation with the upper intercepts more pyrite rich, zoning towards the centre and at depth to more chalcopyrite rich with increasing Au-Cu grades, possibly vectoring towards a ‘causative’ intrusion to the Boda system.
Exhibit 4 updates our estimates of the potential mineralised inventory in the light of the seven new drill hole results at Boda. As previously, in recognition of the difference between RC and DD results, we have included two updated estimates: one based on the whole population of results and the other based on the results of the DD holes only. Our updated mineral inventory estimates are also compared with the resources disclosed by Newcrest for Cadia Ridgeway c 100km to the south (see Exhibit 9).
Exhibit 4: Edison estimate of the potential size of Boda mineralisation
Source of underlying data |
Edison |
Alkane Resources |
Newcrest |
Characteristic (units) |
Updated (all holes) |
Updated (DD holes) |
***Prior (all holes) |
***Prior (DD holes) |
Alkane est. dimensions |
High-grade pod |
Surface projection |
Cadia Valley Ridgeway |
Cadia Ridgeway underground actual** |
Strike (m) |
1,037 |
1,037 |
1,037 |
1,037 |
1,000 |
150 |
1,069 |
250 |
|
Ave est true width (m) |
257 |
327 |
260 |
322 |
400 |
100 |
521 |
150 |
|
Est surface area (Mm2) |
|
|
|
|
|
|
0.557 |
|
|
Ave est true depth (m) |
830 |
1,008 |
875 |
1,031 |
1,100 |
800 |
1,020 |
600 |
|
Est volume (Mm3) |
221 |
342 |
236 |
344 |
440 |
12 |
568 |
22.5 |
|
Est density (t/m3) |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
|
Est tonnage (Mt) |
664 |
1,026 |
707 |
1,033 |
1,320 |
36 |
1,704 |
67.5 |
151 |
Est ave gold grade (g/t) |
0.26 |
0.26 |
0.25 |
0.26 |
*0.26 |
|
0.2 |
|
0.49 |
Est ave copper grade (%) |
0.12 |
0.12 |
0.12 |
0.12 |
*0.12 |
|
|
|
0.32 |
Est ave AuE grade (g/t) |
0.46 |
0.47 |
0.45 |
0.45 |
*0.46 |
3.0 |
|
2.0 |
0.84 |
Est contained gold (koz) |
5,516 |
8,696 |
5,719 |
8,561 |
10,959 |
|
10,957 |
|
2,400 |
Est contained copper (kt) |
827 |
1,276 |
862 |
1,259 |
1,643 |
|
|
|
480 |
Est contained AuE (koz) |
9,847 |
15,377 |
10,187 |
15,088 |
19,563 |
3,472 |
|
4,340 |
4,925 |
Source: Edison Investment Research, Alkane Resources. Note: *Edison estimates; **From Newcrest reserve and resource statement, 31 December 2020; ***Conducted at prices of US$1,794/oz Au and US$9,299/t Cu. Updated gold equivalent resource inventory and grades calculated at US$1,818/oz Au and US$9,518/t Cu.
Given the information available, our best estimate of the overall size of the Boda deposit is broadly unchanged at 664–1,704Mt (cf 707–1,704Mt previously), albeit at a higher average gold grade of 0.26g/t (cf 0.25–0.26g/t previously) containing 5.5–11.0Moz Au plus copper (cf 5.7–11.0Moz previously), including a high grade sulphide cemented breccia of 3.5Moz (unchanged) at a grade above 3.0g/t AuE cut-off (see column entitled ‘High grade pod’).
Despite our interpretation of Alkane’s drilling results, clearly such estimates are very far from being anything close to JORC code-compliant and experience suggests they have an accuracy of approximately ±75%. Even the bottom end of this range, however, would suggest a multi-million ounce gold deposit at Boda, with a potential valuation (based on the US$24.08/oz average valuation of in-situ ounces calculated in our report Gold stars and black holes, published in January 2019) of A$0.30–0.59 per Alkane share.