Sovereign Gold Company Limited (ASX:SOC): Impressive First Results
Sovereign Gold Company today released gold results for its first deep drill hole (GHD001) at Hobbs Pipe 1 at its Mount Adrah Project: 284 metres at 1.2g/t gold from 192 to 576 metres. When allied with previous drilling, this result shows that the pipe is mineralised from surface to at least a depth of 576 metres. GHD001 was drilled to a total depth of 1029.6 metres. Assays for the tail of the hole are awaited, however visible mineralisation has been observed to the end of the hole.
The dimensions of Pipe 1, according to today’s release, are approximately 100 metres wide and 200 metres long. At a density of 2.5 and to a depth of 600 metres, the pipe has the potential to host around 30 million tonnes of mineralisation. At a grade of 1.2g/t this would host around 1 million ounces of gold.
The above dimensions and grade are probably conservative and evidence suggests that Pipe 1 is one of several at the Mount Adrah Project. Thus there is potential for this to be a very large mineralised system.
The Company considers the mineralisation to be an Intrusive Related Gold System (“IRGS”). The key economic features of IRGS deposits are that they are usually low to modest grade, 0.5 to 2.0g/t gold, but can be >10.0g/t; can be very high tonnage, up to 500 million tonnes or more; and are amenable to low cost, bulk mining methods and the gold is free milling (see below for definition of “free milling”). Read more about these systems here.
This an impressive result for a first deep drill hole. Congratulations to the company’s geological team. Evidence to date suggests this has real potential to be a large system. The key economic considerations will be the grade and the tonnes of mineralisation per vertical metre.
I shall report further on this, and the Company’s other projects, over the weeks ahead.
Disclosure: Market Capital holds securities in Sovereign Gold Company Limited as at the date of publication of this article.
A gold ore is said to be “free milling” when the majority of the gold can be extracted by a standard cyanide circuit without previous chemical preparation (such as roasting or bacterial leach), unduly fine grinding, or excessive reagent consumption. In sum, free milling ore is cheaper to process than other ore types.