The prospect is 65 kilometres from the Plutonic Gold Mine operated by Superior Gold Inc (TSX-V:SGI) and is being drilled by Superior as part of a farm-in and joint venture (JV) agreement with Alchemy.
The 51-hole drilling program aimed to further define a newly-discovered shallow parallel lode 150 metres to the south of the main Hermes South ore zone, as well as extending the existing resource down-plunge east-southeast.
Highlighted intersections include: 16 metres at 3 g/t gold from 137 metres; 14 metres at 3 g/t from 81 metres; 9 metres at 4.4 g/t from 98 metres; 10 metres at 3.8 g/t from 151 metres; 11 metres at 3.3 g/t from 123 metres; 3 metres at 10.9 g/t from 85 metres; and 10 metres at 3.2 g/t from 23 metres.
The results have demonstrated the potential to increase the Hermes South resource down-plunge of defined mineralisation.
Additional drilling will be required in order to further define the mineralisation and determine the potential for Hermes South to become a second open pit and part of the Plutonic Mine’s production profile.
Updated resource estimate
An updated resource estimate for Hermes South is planned for the first quarter of 2019 and Alchemy expects to increase the current JORC inferred resource of 1.37 million tonnes at 2.0 g/t for 87,000 ounces of gold.
Hermes South is strategically located and can be readily serviced by extending the existing haul road that links the Plutonic operation to the Hermes deposit.
Superior has advised it has earned the 70-80% interest in the Bryah basin farm-in and JV agreement it holds with Alchemy.
Under the terms of the JV, Alchemy’s interest is carried on an interest-free deferred basis to production, with Alchemy to repay the deferred amount from 50% of its share of free cashflow from production.