- De Grey Mining (DEG) extends the Eagle deposit at its Hemi Gold Discovery in WA, though it’s not enough to stave off a brutal day for gold stocks
- The company says recent exploration work at Eagle found gold mineralisation extensions that are still open along strike and at depth
- However, strong jobs data from the US saw gold prices tank over the weekend, impacting the wider ASX gold sector
- Still, De Grey says it will continue to target extensions of the Hemi project through diamond and reverse circulation (RC) drilling at some key deposits
- Shares in De Grey Mining are down 7.32 per cent and trading at $1.18 each at 10:45 am AEST
De Grey Mining (DEG) has further extended the Eagle deposit at its Hemi Gold Discovery in Western Australia, though it’s not enough to stave off a brutal day for gold stocks.
The company said following recent exploration work at Eagle, gold mineralisation has now been identified at the deposit over more than 800 metres in strike and 300 metres deep. What’s more, the mineralisation is still open along strike and at depth.
Extension drilling 240 metres to the west of the Eagle mineral resource estimate (MRE) has returned hits like a 31-metre intersection grading 3.6 grams of gold per tonne (g/t gold) from 241 metres and a 33-metre intersection at 1.8 g/t gold from 109 metres.
Meanwhile, De Grey said depth and width extensions to the MRE include new “significant” results like a 121-metre hit at 1.1 g/t gold from 146 metres and a 74-metre hit at 1.9 g/t gold from 59 metres.
De Grey’s General Managing of Exploration, Phil Tornatora, said today’s results demonstrate the potential for the company to “rapidly and cost-effectively” grow its Hemi mineral resource — particularly on the back of results from the Diucon deposit reported in July.
“The mineralisation at Eagle comprises broad intercepts of Hemi style mineralisation with overprinted zones of quartz veining,” Mr Tornatora said.
“This appears to represent a structural overprint and controls internal higher
grade portions of the lodes similar to the adjacent Diucon deposit.”
A bloodbath on the gold market
Nevertheless, today’s drilling results haven’t been enough to shield De Grey from a sell-off across the ASX gold sector.
Gold prices slumped over the weekend following a strong Friday jobs report in the US.
The employment reports showed 943,000 new jobs were added across the States over the month of July — well above market expectations of around 870,000.
This meant two things: firstly, that the US economy seems to be remaining steadier than expected given the recent explosion of the Delta variant of COVID-19 around the world. Subsequently, it means the Federal Reserve could begin tapering its economic support sooner than initially expected.
Gold prices typically move inversely to the wider market; as a “safe haven” sector, gold goes up in times of economic crisis and down when things are smooth.
As such, while the strong jobs report bodes generally well for wider markets, it means investors have been moving money out of gold and back into riskier sectors.
Gold spot prices briefly dipped below US$1700 per ounce this morning for the first time since March, and have since settled around US$1725 per ounce — a far cry below the US$1830 price tag from this time last week.
What’s next for De Grey?
While gold prices have impacted the DEG share price, the company said this morning it will continue to target extensions of the Hemi project through diamond and reverse circulation (RC) drilling at some key deposits.
“Step-out drilling will continue to target extensions both along strike and down dip at Eagle, Diucon and the other deposits at Hemi,” Mr Tornatora said.
“RC drilling is pushing west to Antwerp where we see a similar style mineralisation in wide-spaced aircore drilling.”
Shares in De Grey Mining were down 7.32 per cent and trading at $1.18 each at 10:45 am AEST. The company has a $1.64 billion market cap.