De Grey takes option on Pilbara gold project
Western Australian gold explorer and project development company De Grey Mining has signed an exclusive option agreement with fellow ASX-listed Kalamazoo Resources to acquire the Ashburton gold project, in the Pilbara.
Ashburton’s 1.44-million-ounce resource is one of the biggest unmined resources in the Pilbara outside De Grey’s Hemi project, says De Grey MD Glenn Jardine.
“It [Ashburton] has previous mining history, an extensive drilling database and development concept studies, which indicate it may be complementary with our development strategy for Hemi,” states Jardine.
De Grey plans to assess, in future, the potential of producing a high-grade sulphide concentrate from openpit mining at Ashburton and trucking the concentrate to Hemi for further processing in the proposed pressure oxidation plant. This is a similar strategy being considered for areas of the current 2.2-million-ounce mineral resource estimate contained in the regional resources on De Grey tenements around Hemi.
Should the outcomes of this assessment be positive, then De Grey may have multiple development opportunities spanning the regional deposits around Hemi and at the Ashburton project, with which to optimise future capital deployment and gold production.
All heritage agreements at Ashburton are in place with Native Title parties.
De Grey has to pay a A$3-million option fee to Kalamazoo within five business days of signing the option. The option period is 12 months and is extendable by a further six months to a total of 18 months at De Grey’s election.
During the option period, De Grey may exercise the option to acquire Ashburton through the payment of A$30-million in two tranches.
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