Alto Metals Ltd (ASX:AME) has hit shallow, broad high-grade gold in drilling around the historic Lord Nelson pit which increases the company's confidence in the Sandstone Gold Project in WA's Mid-West.
The first assay results from an initial 1,500-metre reverse circulation (RC) drilling program have come from an area about 200 metres to the south of the pit, which previously produced 207,000 ounces.
Results from the first nine drill holes of this program have confirmed shallow, high-grade gold mineralisation and include 24 metres at 3.7 g/t from 104 metres, 12 metres at 3.0 g/t from 32 metres and 4 metres at 2.2 g/t from 52 metres.
Alto said: “These latest step-out drilling results have confirmed a new, wide gold lode, that is shallow and remains open along strike and at depth, 200 metres to the south of the Lord Nelson open pit.
“Importantly, the mineralisation style and geological setting of this lode is identical to that of the Lord Nelson deposit.
“Alto is highly encouraged by these results and looks forward to further successful drilling results at Lord Nelson in the near future.”
The width of this new gold lode, combined with the fact it remains open on strike and at depth, presents a key target for further drilling.
Alto firmly believes the significant potential of Sandstone has not yet been tested and plans to begin further exploration drilling for 3,500 metres to around 300 metres depth below the existing, shallow-mined Lord Nelson open pit.
Lord Nelson and the nearby Lord Henry deposit, which produced 48,000 ounces, were only mined to shallow depths of 90 metres and 50 metres, mainly due to the inability of the former Sandstone process plant to treat large volumes of the harder ore found at depth.
The deeper drilling will test several depth extension targets in the fresh rock down-dip and plunge of known mineralisation, where historical intercepts include 6 metres at 16.4 g/t from 167 metres and 5 metres at 13.0 g/t from 99 metres.
Unsolicited takeover bids
The company believes that two unsolicited takeover offers in the last 12 months highlight the attractiveness of the Sandstone project.
In 2019 Alto survived a takeover bid from Middle Island Resources Ltd (ASX:MDI) and last Friday fielded an off-market takeover offer from Goldsea Australia Mining Pty Ltd, an Australian wholly-owned subsidiary of Shandong Goldsea Group Co Ltd, to acquire all of the company's shares for 6.5 cents per share.
The offer is subject to several conditions, including:
- A due diligence condition to confirm the company's existing JORC code mineral resource on the Sandstone Gold Project and an environmental review;
- Foreign Investment Review Board (FIRB) approval;
- Minimum acceptance of at least 90% (by number) of Alto Shares; and
- Regulatory approvals.
While the board is encouraged by the continued interest in the company, directors advise that shareholders should take no action and await the board's formal recommendation.