Follow-up drilling by LionOre Mining International (LIM-T) has cut more high-grade nickel mineralization at the newly discovered Waterloo zone on the Wildara property in Western Australia.
Diamond drill hole LWDD 462 returned 19 metres (from 140 metres below surface) running 5.27% nickel and 0.42% copper, including 4 metres (from 141 m) of 11.1% nickel and 0.78% copper and 7.6 metres (from 151.5 m) averaging 5.5% nickel and 0.42% copper. The hole was collared about 50 metres north of the discovery hole, LWDD 452, which cut 4.83% nickel and 0.49% copper over 10.68 metres, starting 153 metres down-hole, including 5.82 metres averaging 7.68% nickel and 0.81% copper.
About 50 metres south of the discovery hole, hole LWDD 455 returned 0.4 metre of 8% nickel and 0.49% copper starting at 160.7 metres below surface.
Two reverse circulation holes were also collared about 50 metres south and 80 metres north of hole 452. Hole LWDC 460, to the south, intersected 4 metres (from 148 m) grading 1.08% nickel and 0.11% copper. To the north, hole LWDC 461 cut 13 metres (from 115 m) of 3.45% nickel and 0.17% copper, an interval that included a 7-metre length of 4.84% nickel and 0.2% copper.
Six other holes came up barren. Assay results from another six holes are pending.
Mineralization at Waterloo is mostly high-grade sulphides, either disseminated or as a matrix to silicates. Local, structurally controlled zones of massive mineralization are also present. The disseminated sulphides grade up to about 3% nickel, the matrix sulphides between 3 and 9%, and the massive sulphides between 9 and 15%.
So far, drilling has outlined a 50-by-200-metre lenticular zone of nickel sulphide mineralization. The northern portion of the zone is sub-horizontal. To the south, the zone is folded with a shallow-dipping eastern limb and a near-vertical western limb. The zone remains open to the north and electromagnetic geophysical surveying and drilling suggest that the sub-vertical mineralization may continue at depth to the southwest.
LionOre is currently planning a new exploration program on Waterloo and on several electromagnetic conductors in the surrounding region.
LionOre owns 60% of the Wildara project and manages exploration. Dalrymple holds the remaining stake.
Waterloo lies about 6 km from the companies’ developing Thunderbox gold project, which is slated to pour its first dor bar in the fourth quarter after a positive production decision in December. Thunderbox too is held 60% by LionOre and 40% by Dalrymple.
Construction at Thunderbox is expected to take nine months with a price tag of US$33 million. A proposed open-pit operation is projected to produce 220,000 oz. gold in the first year of commercial operations and 150,000 oz. per year thereafter. Over its five-year lifespan, the mine is expected to produce about 800,000 oz. at an average cash cost of US$157 per oz. During the first year, cash cost are pegged at US$110 per oz. thanks to higher grades and softness of the oxide ore.
About half the mine’s production has been hedged through Macquarie Bank at a flat forward price of US$293 per oz., or about US$35 per oz. more than was used in the bankable feasibility study.
Thunderbox’s reserves stand at 10.9 million tonnes averaging 2.43 grams gold per tonne, based on a gold price of US$254 per oz. and cutoff grades of 0.7 gram per tonne in oxidized material and 1.1 grams in unweathered rock.
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