On Friday, the Western Australian gold miner’s shares dropped 7% to close at 21c, just above its 12-month low of 20c, but with drilling data showing the lode has twice the depth extent previously believed saw the stock surge almost 20% to a peak of 25c.
The latest diamond core assays from drilling outside the 79,600 ounce at 3.8 gram per tonne maiden resource, which previously reported visible gold, delivered the goods, extending the plunge of the steeply dipping lode to 500m, with the resource confined to 150m.
The best result was from the deepest intercept to date with 12m at 34.5 grams per tonne from 397m, including 0.47m at 643gpt. That is the highest grade yet.
The second hole, drilled 40m down-plunge of the resource, returned 39m at 4.6gpt from 233m, including 2m at 15.9gpt and 10m at 6.4gpt.
Additional diamond drilling to test the geometry of the Never Never lode, at the interpreted intersection zone with the Gilbey’s North deposit, returned 8m at 5.17gpt gold from 62m and 6m at 7.78gpt from 116m.
Gascoyne believes both intersections are Never Never mineralisation. Both are outside the resource.
Additionally, RC extensional drilling targeting down-plunge targets returned 26m at 10.27gpt gold from 274m, including 10m at 24gpt, and infill drilling within the resource returned 29m at 7.58gpt from 117m, including 8m at 13.3gpt.
Gascoyne managing director Simon Lawson, who had to announce last week’s $12.6 million September quarterly loss due to rain, labour issues and an eye-watering A$3135/oz all-in sustaining cost, was ebullient this morning.
He described Never Never as “one of the most remarkable gold deposits I have ever seen” due to its combination of high-tenor and high-grade mineralisation over sustained widths.
“Our geologists are super excited as we drill each hole and, with such amazing intercepts being delivered with each successive step-out, it is becoming increasingly clear that this is one of the most significant new gold discoveries anywhere in Australia,” he said.
The deposits are adjacent to the existing Gilbey’s pit, and close to the 2.5 million tonne per annum Dalgaranga mill.
A new resource is expected before the end of the year.
Government approval to mine Gilbey’s North and Never Never is expected soon.
Argonaut Securities analyst Royce Haese said mining approvals can’t come fast enough for Gascoyne, with the new deposits set to a step change to Gascoyne’s production profile, although with cash dwindling, he expects a need for additional funding “is a near certainty now”.
