GTI Resources has finished its aircore drilling program at the Niagara gold project in Western Australia ahead of schedule.
The Niagara gold project is located six kilometres southwest of Kookynie in the central goldfields of Western Australia and comprises one granted exploration licence, E40/ 342, and six contiguous prospecting licence applications including existing applications, P40/1506, P40/1515, P40/1516 and P40/1517 plus the recently acquired P40/1513 and P40/1518.
This region is starting to attract exploration attention and dollars, which has given GTI Resources momentum to drill test its own ground here.
Those who have followed activity in the region will know Genesis Minerals acquired a 248 square kilometre tenement package at Kookynie that includes 15 kilometre of strike length and a joint ore reserves committee (JORC) indicated and inferred resource of 414,000 ounces.
Genesis Minerals’ Greater Ulysses project in this region holds 1.28 million ounces, and the company is currently capped at $68.5 million.
Metalicity is also located in the region, neighbouring GTI Resources. Its highly successful drilling campaign earlier this year, saw it gain almost 250 per cent after hitting “spectacular” high grade results from first assays at Kookynie in its joint venture (JV) with Nex Metals Exploration.
Metalicity’s success hints at the potential of GTI’s Western Australian ground, which is only around two kilometres north of its project.
Metalicity has a 50 per cent interest in its Kookynie project, while GTI Resources has 100 per cent ownership.
The news comes just a week after the company received encouraging assay results from the recently completed second auger soil sampling program.
The recent Aircore drill campaign targeted six of the eight significant gold in soil anomalies identified within exploration licence E40/342.
Drilling of the targeted geochemical anomalies has intersected quartz veining in a number of drill holes at predicted positions.
The intersected veins are occasionally associated with pyrite selvages and as fracture fill and silicification.
The relationship between the geochemical anomalies and the intersection of quartz veins will be established once assay results have been received.
Drilling is also providing guidance on the lithology and structure within the drilled areas including silicified faults, which complements the structural interpretation.
Lithologies intersected included basalt, granitoids, ultramafics and metasediments.
The geological and structural model will be updated and interpreted in the coming weeks and then incorporated with the multielement geochemistry when received.
Drilling was concluded ahead of schedule with 52 holes completed at an average depth of 45 metres for 2321 metres.
Initial gold analysis is expected in mid to the third week of October and multi-element geochemistry soon after.
A reverse circulation rig is scheduled to start testing bedrock targets during late October following receipt of results from the current round of aircore drilling.
A fine time to accelerate exploration
It would be highly beneficial for GTI Resources given the current Australian gold price if this accelerated and extensive exploration campaign were to shape the way for a swift move to early-stage production.
While some corners of the investment community are focusing on gold’s retracement from about $US1950 ($2718) per ounce to $US1860 per ounce over the last month, what appears to have gone unnoticed is the sharp depreciation of the Australian dollar against the United States dollar that has occurred in the last week.
If we look at the last few weeks in isolation, the Australian dollar gold price was $2667 per ounce on September 17 when the price was $US1950 per ounce.
As we write, the gold price has rebounded in the last 24 hours to hit $US1890 per ounce, and with the Australian dollar sitting at $US0.707 the Australian dollar gold price is $2673 per ounce, implying a slight premium to the US dollar price that prevailed on September 17.
The average operating production costs are in the vicinity of about $1350 per ounce, implying a hefty margin of about $1300 per ounce at current spot rates.
Consequently, GTI Resources is very much a right place/right time story, particularly given the region’s history of yielding high-grade mineralisation that can significantly drive down the cost of production.