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PNX Metals sets sight on near-term gold production at Fountain Head Project

Drilling is ongoing to increase geological confidence in the Fountain Head gold resource, extend the known mineralisation and identify new areas with the potential to augment the current resource.

PNX Metals Ltd - PNX Metals sets sight on near-term gold production at Fountain Head Project
Ongoing metallurgical test work and analysis is being completed on drill samples

PNX Metals Ltd (ASX:PNX) has set its focus on activities aimed at near-term gold production from the Fountain Head Project, part of its Hayes Creek Project in the Northern Territory.

Heap leaching is being assessed as a low-cost, low-risk, scalable option for rapidly monetising the existing gold resource at Fountain Head.

This strategy may also provide an opportunity to enhance overall Hayes Creek Project economics and extend the project mine life with the consequentially mined-out Fountain Head pit available for use as tailings storage for subsequent sulphide flotation of ore from the Mt Bonnie and Iron Blow zinc-gold-silver deposits at Hayes Creek.

Project location.

Near-term development of gold resources also capitalises on a supportive current and forecast high gold price environment and preserves the in-ground value of the Hayes Creek Project in a low zinc price environment.

Drilling activities at Fountain Head

The Fountain Head Project hosts a resource of 2.58 million tonnes at 1.7 g/t gold for 138,000 ounces of gold.

In October, PNX completed a 16-hole drill program that returned numerous mineralised intercepts confirming good high-grade continuity at depth and along strike, directly adjacent to the current resource envelope.

This drilling increased confidence in the geological model and highlighted the potential for further resource growth.

More assays due shortly

In November and December, a further 3,500 metres of reverse circulation (RC) drilling was completed over 39 holes at Fountain Head.

Assay results from the December 2019 drilling program are expected during February.

The balance of RC drilling, about 3,000 metres in areas of the deposit that are to be mined later in the project schedule, has commenced and will be completed by mid-February, with assays expected in March.

The aim of the drill program is to test areas of open mineralisation adjacent to the current resource envelope and potential higher-grade ‘trap sites’ within the resource estimate.

Plan view of the Fountain Head Project showing proposed heap leach infrastructure, waste rock stockpile (blue), existing resource projected to surface (red), and mineral leases (white).

Metallurgical test work

Excellent gold recoveries with low reagent consumption were achieved from metallurgical test work completed during the December quarter, resulting in PNX accelerating studies and the approvals process for the development of a gold heap leach operation at Fountain Head.

The recoveries of gold and silver, along with low cyanide and lime consumption rates compare favourably with other global gold heap leach projects.

Heap leach specific column tests for use in scaled-up modelling and materials handling tests are now underway.

Diamond drilling is also underway to provide further samples for ongoing metallurgical test-work, including bottle rolls and column tests.

Lead financial advisor appointed

With increased confidence in the potential of the Fountain Head heap leach project, PNX has appointed global corporate and capital advisory firm Medea as lead financial advisor to assist with the negotiation, structuring and arrangement of project financing.

This will ensure appropriate financing is in place as Fountain Head is advanced towards a development decision.

Government and environmental approvals

The company has submitted its Notice of Intent to the Northern Territory Environmental Protection Authority.

This is the first stage of the approvals process, with a dewatering Mine Management Plan to be submitted in late February and an Environmental Impact Statement (EIS) is expected to be lodged in April.

Planned activities in March quarter

  • Completion of RC and diamond drilling subject to any unplanned weather delays over the Northern Territory wet season. Drilling is designed to increase geological confidence in the Fountain Head mineral resource model, extend the known gold mineralisation, and identify new areas with the potential to augment the current resource;
  • Receipt and interpretation of drill assays from the December 2019 drilling and the ongoing drilling;
  • Updating the Fountain Head mineral resource which will be used for final pit optimisation and scheduling; and
  • Ongoing metallurgical test work and analysis on samples from the RC drilling and surface trenching to confirm gold recoveries, reagent consumption and other heap leach design criteria.

Quick facts: PNX Metals Ltd

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Market: ASX
Market Cap: $12.18 m

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