GTI Resources (ASX: GTR) has finished its air-core drilling program at its Niagara Gold Project ahead of schedule.
The project is located about 6km southwest of Kookynie in WA’s central goldfields region and comprises one granted exploration licence and six contiguous prospecting licence applications including existing applications.
The region has started to attract serious exploration attention and investment, which has given GTR momentum to drill-test its own ground there.
Those who have followed activity in the region will know Genesis Minerals Ltd (ASX: GMD) acquired a 248m2 tenement package at Kookynie, which includes 15km of strike-length and a JORC-indicated and inferred resource of 414,000oz.
GMD’s Greater Ulysses Project in this area holds 1.28moz and the company is currently capped at $68.5m.
Metalicity Ltd (ASX: MCT) is also located in the region, neighbouring GTR.
Its highly successful drilling campaign earlier this year saw MCT gain almost 250% after hitting “spectacular” high grade results from first assays at Kookynie in its joint venture with Nex Metals Exploration Ltd (ASX: NME).
The success of the MCT project, located just 2km north of GTR’s, hints at Niagara’s enormous potential.
MCT has a 50% interest in its Kookynie project while GTR has 100% ownership.
The news comes a week after the company received encouraging assay results from the recently completed second auger soil sampling program.
The recent air-core drill campaign targeted six of the eight significant gold-in-soil anomalies identified within the 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 selvagesand 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 before being incorporated with the multielement geochemistry when received.
Drilling was concluded ahead of schedule with 52 holes completed at an average depth of 45m and 2321m in total.
Initial gold analysis is expected in the middle or the third week of October and multi-element geochemistry soon afterwards.
An RC rig is scheduled to start testing bedrock targets late October following receipt of
results from the current round of air-core drilling.
An optimum time to accelerate exploration
Given the gold price, it would be highly beneficial for GTR to accelerate an extensive exploration campaign to pave the way for a swift move to early-stage production.
Some corners of the investment community are focusing on gold’s retracement from about US$1950oz/t to US$1860oz/t over the last month.
But what appears to have gone unnoticed was the sharp depreciation of the Australian dollar against the US dollar in the last week.
If one looks at the last few weeks in isolation, the Australian dollar gold price was $2667/oz on September 17 when the price was US$1950/oz.
At the time of writing, the gold price has rebounded in the last 24 hours to hit US$1890/oz.
With the Australian dollar sitting at US$0.707, the price is AU$2673/oz, implying a slight premium to the US dollar price that occurred on September 17.
The average operating production costs are about AU$1350/oz, implying a hefty margin of about AU$1300/oz.
Consequently, the GTR project is happening at the right place and right time, particularly given the region’s history of yielding high-grade mineralisation that can significantly drive down the cost of production.
The Niagara Gold project 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.
By Jonathan Jackson
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