Vector Resources (ASX: VEC) has identified a possible high grade gold zone running parallel to the existing Resource at the company’s Gwendolyn East Project, around 200 kilometres west of Kalgoorlie, based on the latest assays.
Highlights from drilling outside the resource area at Gwendolyn East include:
- 5 metres at 22.68 grams per tonne (g/t) gold from 21 metres, including 1 metre at 107.7g/t gold;
- I metre at 20.51g/t gold from 36 metres; and
- 2 metres at 12.44g/t gold from 117 metres.
These results indicate the continuation of mineralisation to the west and northwest of previously identified mineralised zones. Mineralisation remains open in all directions.
Importantly, this is only the initial round of assays from Vector’s high priority Phase 3 reverse circulation drilling program at Gwendolyn East, which began in February.
Gwendolyn hosts a JORC Inferred Resource of 1.21 million tonnes at 2.71g/t gold for 106,000 ounces of contained gold, following two consecutive resource upgrades in the December quarter 2011. The project also has 103,000 unclassified ounces.
Historical mining was carried out at the project, with a near surface oxide pit mined to a depth of about 28 metres for 73,077 ounces of gold production.
Further drilling at Gwendolyn will focus on continued testing of extensions to the mineralisation, as well as infilling the unclassified material for JORC classification.
In addition, eight diamond holes will be drilled with the aim of obtaining suitable cores to conduct preliminary metallurgical and geological analysis for a future Feasibility Study.
Vector chairman Damien O’Reilly said: “The Company is fortunate to have such an exciting prospect.”
“With each successive exploration programme undertaken by Vector Resources, the mineralisation envelope continues to grow.
“The most recent outcome of drilling at our Gwendolyn project clearly attests to this: the outstanding results of which will further enhance and expand the ore boundaries, and with a subsequent increase in the resource.”
Gwendolyn and Mt Dimer resources could increase 200%
A recent research report by RM Research has rated Vector Resources as a speculative buy and placed a three month price target on the company of $0.30, three times the company’s current share price.
The Perth-based broker said Vector could increase its gold JORC Resource by 200% in the short term, following the acquisition of Golden Iron Resources.
“Total JORC Resources at Gwendolyn and Mt Dimer should increase to between 460,000 to 640,000 ounces within the next 3-6 months which would give us a share price target between 30 and 40 cents per share (fully diluted) assuming this relatively high-grade resource inventory would sustain a premium of say EV/oz gold of A$20-25/ounce over the sector average for its peers in the range of A$107/ounce,” the report said.
“RM Research believes that the relatively high grades at both Gwendolyn and Mt Dimer have the potential to sustain C1+C2 operating costs under A$400/ounce against an average of approximately A$750/ounce for Western Australian open cut miners.”