The Gilgunnia Project is located about 100km south of Cobar in central NSW and comprises 80km2 of granted leases (ML1361 & EL7461). It contains the historic May Day gold-base metal deposit along with the highly prospective Mallee Bull “Cobar-style” polymetallic discovery.
The Mallee Bull prospect lies adjacent to the historic 4-Mile Goldfield, and was initially identified as a coincident EM and magnetic geophysical anomaly in March 2011. Preliminary RC and Diamond drilling to test this anomaly encountered significant silver-lead-zinc mineralisation, and in July/August 2011 intersected a massive and stringer/breccia sulphide zone with strong copper-silver-gold-lead-zinc-cobalt values characteristic of major Cobar-style deposits.
The Mallee Bull discovery sits favourably in a volcaniclastic turbidite sequence within the Silurian-Devonian Cobar Superbasin and is structurally located in the high strain environment of the “nose” of an anticline, with broad zones of deformation and alteration. Mineralisation at Mallee Bull features the Cobar-style attributes of short strike lengths, narrow widths and vertical continuity, with the current deepest drill hole intercept at more than 800m below surface. Mineralisation is interpreted as occurring as shoot-like structures dipping steeply to the west.
In May 2012, Peel and CBH Resources Limited, a wholly owned subsidiary of Toho Zinc Co Ltd., signed a binding Heads of Agreement related to EL7461 and ML1361, which includes the Mallee Bull copper-polymetallic discovery near Cobar. Under the agreement, CBH has the right to earn an interest of up to 50% over a three-year period via staged $8.33 million expenditure on exploration and contribution to previous exploration costs incurred by Peel.
In March 2014, CBH Resources completed its final Farm-in payment in relation to the agreement, and consequently has earned an undivided 50% interest in the project; a 50:50 Joint Venture has now been formed.
CBH Resources is an Australian-based mineral resources company producing zinc, lead and silver from the Endeavour Mine north of Cobar. The company, which is 100%-owned by Tokyo Stock Exchange-listed Toho Zinc, is also commissioning the Rasp underground zinc, lead and silver mine at Broken Hill. CBH brings a wealth of technical expertise and resources to Mallee Bull, particularly with regards to exploration and development within the Cobar Superbasin.
Drilling to date
Initial drilling from March 2011 to Feb 2012 comprised multiple phases of diamond, RC and RAB drilling for a total 9,407m, and confirmed Mallee Bull as a Cobar-style discovery. Following CBH’s election to farm-in to Mallee Bull, seven drilling programs have been completed for a total 45,848m. The programs have continued to confirm significant grades of copper along strike, at depth and also near surface. Stage 3 of the farm-in, which was completed from August 2013 to March 2014 and saw mineralisation at Mallee Bull extended to more than 800m below surface, also included resource definition drilling that enabled the maiden resource estimate released in May 2014.
The Mineral Resource estimate formed the basis of a scoping study, completed at the end of September 2014, which highlighted the benefits of increasing the scale of Mallee Bull. Consequently, an Orion 3D DC-IP-MT survey was completed, identifying numerous anomalies including the T1 area. Defined by a very strong chargeable and low resistivity response, T1 is located about 150m below surface and up-dip to the east of Mallee Bull. Follow-up RC drilling encountered extremely high grade Zn-Pb-Ag-Au mineralisation, with better intercepts including:
- 7m @ 21.39% Zn, 12.74% Pb, 203 g/t Ag, 0.58 g/t Au from 71m including 5m @ 29.54% Zn, 17.52% Pb, 280 g/t Ag, 0.80 g/t Au from 71m in MBRC028
- 12m @ 20.30% Zn, 14.81% Pb, 308 g/t Ag, 1.59 g/t Au from 83m including 7m @ 31.44% Zn, 19.37% Pb, 440 g/t Ag, 2.53 g/t Au from 83m in MBRC024
Substantial zinc-lead and copper-rich mineralisation has previously been intercepted at Mallee Bull, most notably on the northern end of the current resource model where it has been defined to more than 500m below surface, remains open, and is yet to be formerly quantified.
Encouragingly, follow-up RC and diamond drilling intercepted multiple intervals of quartz-sulphide (chalcopyrite-pyrrhotite) stringer/breccia style mineralisation, indicating greater strike continuity of copper mineralisation than previously assumed at Mallee Bull. Significant intervals include:
- 5m @ 1.01% Cu, 12 g/t Ag from 371m, 2m @ 1.91% Cu, 23 g/t Ag, 0.25 g/t Au from 392m and 3m @ 2.42% Cu, 74 g/t Ag, 0.29 g/t Au, 0.87% Pb, 0.22% Zn from 403m in MBRCDD049
- 62m @ 3.15% Cu, 42 g/t Ag, 0.28 g/t Au from 465m (incl. 34m @ 4.6% Cu, 63 g/t Ag, 0.44 g/t Au from 475m) in MBRCDD050
- 5m @ 2.1% Cu, 59 g/t Ag, 0.72 g/t Au from 385m, 4m @ 1.18% Cu, 23 g/t Ag, 0.12 g/t Au from 398m, 4m @ 1.87% Cu, 18 g/t Ag, 0.09 g/t Au from 463m and 4m @ 2.64% Cu, 34 g/t Ag, 0.77 g/t Au from 483m in MBRCDD051
- 2m @ 2.33% Cu, 46 g/t Ag, 0.62 g/t Au from 422m in MBDD026/026W1
- 4m @ 1.52% Cu, 111 g/t Ag, 0.21 g/t Au, 2.52% Pb, 4.2% Zn from 197m in MBRC052
The latest drilling program (CBH JV Program 7), which was completed in part to determine the cause of an off-hole DHEM anomaly centred ~300m north of the main Mallee Bull deposit, led to the discovery of new copper mineralisation in the area now termed ‘Mallee Bull North’. This mineralisation remains open along strike and down dip. Better intercepts include:
- 7m @ 2.01% Cu, 38 g/t Ag, 0.15 g/t Au from 324m in MBRC054
- 9m @ 2.24% Cu, 27 g/t Ag, 0.27 g/t Au from 455m in MBRC055
- 5m @ 0.76% Cu, 0.54% Pb, 0.62% Zn, 16 g/t Ag from 458m in MBRCDD056
- 10m @ 1.01% Cu, 0.37% Zn, 14 g/t Ag from 469m (incl. 4m @ 1.67% Cu, 0.61% Zn, 18.4 g/t Ag, 0.13 g/t Au from 474m) in MBRCDD059
- 4m @ 1.18% Cu, 0.36% Pb, 0.23% Zn, 37.7 g/t Ag, 0.37 g/t Au from 369m (incl. 1m @ 3.15% Cu, 0.30% Pb, 0.31% Zn, 39.7 g/t Ag, 0.58 g/t Au from 369m) in MBRCDD060
- 1m @ 1.59% Cu, 0.47% Pb, 3.05% Zn, 28.9 g/t Ag from 266m, 1m @ 4.65% Cu, 48.3 g/t Ag, 2.96 g/t Au from 335m, 7m @ 1.28% Cu, 16 g/t Ag, 1.89 g/t Au from 371m and 5m @ 2.22% Cu, 31 g/t Ag, 0.09 g/t Au from 404m in MBDD027
Drilling at Mallee Bull has continued to encounter zones of strong mineralisation. Significant results include:
|Hole ID||Northing||Easting||Final Depth (m)||From (m)||To (m)||Width (m)||Cu (%)||Ag (g/t)||Au (g/t)||Pb (%)||Zn (%)|
May Day was discovered in 1898 and was initially developed as an underground copper-lead-silver mine. Exploration in the 1970s identified high grade gold-base metal mineralisation to a depth of about 250m below surface. Exploration in the late 1980s defined a shallow gold resource, which eventually lead to the development in 1996 of a small-scale mining operation comprising an open pit with a heap leach gold circuit.
In May 2010, Peel completed a programme of 10 RC drillholes for 1,877m of drilling at the May Day gold-base metal deposit, testing for down-dip extensions to known mineralisation. Better drill results include 16m at 1.78 g/t Au, 42 g/t Ag, 0.25% Cu, 0.95% Pb, 1.33% Zn from 159m in MDRC002; 24m at 0.96 g/t Au, 20 g/t Ag, 0.07% Cu, 0.70% Pb, 0.85% Zn from 120m in MDRC004; and 27m at 2.12 g/t Au, 27 g/t Ag, 0.11% Cu, 0.43% Pb, 0.75% Zn from 120m in MDRC005.
The results confirmed down-dip extensions and the shear-related sub-vertical shoot-like nature of the mineralisation.
Several geophysical surveys comprising gravity and IP were also undertaken over the immediate May Day mine environment and 2km along strike to the northeast; this data, along with remodelled regional airborne magnetic data shows that a moderate-to-strong chargeable IP anomaly and a deep (greater than 400m) magnetic anomaly is associated with the May Day deposit. Drill result-supported interpretation has been made that the source of this magnetic anomaly is a possible deeper mineralised system that has remobilised or “leaked” into the May Day deposit.
Further work at May Day will involve a deep drilling programme to target this anomaly.