NEW RESOURCE At a 1 g/t cutoff, the resource reported 9.44-million tonnes grading 2.1 g/t gold in the indicated category
Following the successful completion of $4-million financing in July, exploration company Helio Resources has approved a $1.5-million diamond-drilling programme for its SMP gold project, in south-west Tanzania.
The SMP gold project covers a 238 km2 area in the Lupa goldfield, while gold mineralisation has been identified in 30 targets within the area. Two of these, with potential for significant growth, were advanced to the resource stage in 2012.
The drilling programme is expected to include 5 000 m to 7 000 m of drilling and to be completed by the end of next month, the company states.
It will focus on adding higher-grade resources from the Porcupine target, where the deepest previous drill holes intersected 28 m grading 5.1 g/t of gold, and 53 m grading 2.9 g/t of gold.
The programme will also test the openpit and underground potential of the Konokono target – with previously announced drill intercepts, including 4 m grading 11.2 g/t of gold and 13.1 m grading 3.7 g/t of gold – as well as the Gap target.
Both of these separate mineralised zones are open along strike and to depth, with mineral-isation styles hosted in brittle structures cut-ting granite, similar to those at Porcupine, the company states.
Drilling by Helio at the Gap target has also intersected multiple zones of mineralisation over an 800 m strike length. Previously announced intercepts include at 15 m grading 2.2 g/t of gold (including 5 m grading 5.3 g/t of gold); 4 m grading 4.2 g/t of gold; and 3 m grading 7.2 g/t of gold, according to the company’s September news release.
Meanwhile, metallurgical testwork indicated recoveries of up to 96% using a gravity and cyanidation process, the company states.
The drilling programme follows the conversion of the PL2580, which covers the conversion of the Kenge resource area of the SMP project, into a retention licence (RL), in April.
The Kenge resource area is 6 km east of gold miner Shanta Gold’s New Luika mine, which reported production of 64 000 oz of gold in 2013 and is projected to produce 80 000 oz of gold in 2014, the company says.
An RL is the intermediary step between a prospecting licence and a mining licence and is valid for five years, Helio Resources states on its website.
Helio Resources CEO Richard Williams said in the April company news release that this was regarded as a major milestone for the company, as it provided security of tenure through the prefeasibility and feasibility stages of the project.
“It enables the company to commit resources to the development of the SMP project, knowing that the Tanzanian government is fully sup-portive of our activities to date. “Shareholders can feel confident that the licence process works,” he declared in the release.
New Resource
Helio Resources released a new resource cal-culation in February on the Kenge and Porcupine resource areas, focusing on the higher-grade aspect of the project.
The previous resource estimate was based on a 0.5 g/t cutoff grade at a $1 450/oz gold price.
“Currently, at a 1 g/t cutoff, the resource reported 9.44-million tonnes grading 2.1 g/t gold (628 000 oz) in the indicated category and a further 3.62-million tonnes grading 1.5 g/t gold inferred,” the company states, adding that the resource work also considered higher-grade ounces with the potential for underground mining.
At a 3 g/t cutoff, the indicated resource reported 2.05-million tonnes grading 5.0 g/t gold indicated and 0.09-million tonnes grading 5.2 g/t inferred.
“This mineral resource estimate validates the work the company conducted last year,” Williams said in the February news release.
He noted that the current market was focused on projects that could deliver low- cost, higher-grade production opportunities, coupled with lower upfront capital expenditures. Therefore, he believed that the company could meet these requirements at its SMP project.
“Coupled with these resources, which are both open to depth, is a pipeline of seven additional, near-surface, high-grade targets that are not currently included in the resource base. “These targets represent future opportunities to significantly grow our resource base,” Williams said.