ATW hits in Deflector step-outs

Vancouver – Doubt, it turns out, can be a useful thing: historical work showed the Deflector deposit at ATW Gold‘s (ATW-V) Gullewa gold mine in Western Australia was closed off to the north and south but ATW, guided by geophysics, drill tested the areas regardless and hit some high-grade mineralization.

Gravity and induced polarization (IP) surveys indicated Deflector might extend laterally to the north and south, though offset modestly by faulting. The geophysical data also showed several other targets in the area.

ATW decided to test all possible targets using widely spaced drilling, spread out over several square kilometres. The company has now completed 37 holes totalling 8,500 metres in the program and released results for 33 holes. Three holes returned intercepts of particular interest.

Hole 34, drilled 70 metres directly south of the Deflector zone, returned 7 metres of 11 grams gold per tonne, 0.3% copper, and 0.8 gram silver per tonne. Previous explorers at Gullewa did not recognize the Deflector deposit’s southerly plunge, something ATW determined by correlating IP data and historic shallow drill results. Testing the plunge extension worked; mineralization is hosted by quartz veining with pyrite and minor chalcopyrite within partially brecciated and altered basalt. The intercept indicates an apparent Deflector strike extension of 400 metres.

Hole 37 tested the offset strike extension to the northwest and returned a short, high-grade hit: 4 metres of 10.35 grams gold, 12.32% copper, and 72.3 grams silver. Mineralization in hole 37 was similar to hole 34, comprising massive chalcopyrite and quartz veining within a basaltic host. The zone remains open down-dip.

And hole 13, collared 600 metres southwest of the Deflector deposit, returned 42 metres grading 1.65 grams gold, 0.4% copper, and 1.25 grams silver from 52 metres depth. The diamond core portion of the drill hole assay was released earlier but on inspecting the reverse circulation (RC) precollar ATW geologists noticed quartz veining in the transition zone and sent it for assay. The additional section extended the intercept to 42 metres from 28. The hole is in a new zone that, according to the geophysical data, strikes for roughly 1 km.

Gullewa, a 550-sq. km property, hosts several gold deposits. Deflector is the most significant and hosts 535,000 measured and indicated tonnes grading 3.87 grams gold, 1.18% copper, and 8.03 grams silver as well as 1.2 million inferred tonnes averaging 4.32 grams gold, 0.96% copper, and 6.34 grams silver. The property lies 450 km north of Perth in the Yalgoo mineral fields of Western Australia.

Exceptionally wet weather prompted ATW to halt drilling at Gullewa in late July, which gave the company time to catch up on core logging and interpretation. The company plans to recommence drilling at Deflector in September.

And in the meantime the company is working through a scoping study on Deflector, which is expected in November. Environmental baseline studies on the tailings dam and water discharge, processing plant refurbishment and upgrade cost estimates, and a metallurgical study update are all complete; ATW now has to finish drilling, pit optimization studies, and native title discussions on licenses for roads and water pipelines.

ATW picked up Gullewa last year from Batavia Mining (BTA-V) for 2 million shares and A$13 million over three years. The purchase included licensed tailings disposal facilities, a 50-person camp and processing infrastructure that included a 300,000-tonne-per-year carbon in leach plant, all on care and maintenance.

The property is 300 km southwest of ATW’s Burnakura gold mine, which achieved commercial production in June. The mine is expected to produce 36,000 oz. gold annually in its current format; ATW has already initiated an expansion that will increase annually production to 50,000 oz.

ATW recently mobilized a drill to Burnakura and has already completed six holes aimed at increasing the resource count north of the NOA2 under4ground workings. Drilling on the northern extension continues and assay results are pending.

In early July ATW closed $5.9-million financing, selling 11.1 million units at 53¢ a piece. Each unit comprised a share and half a warrant, with warrants exercisable at 65¢ for two years.

ATW’s share price gained 2¢ on news of the Deflector extension drill results to close at 55¢. The company has a 52-week trading range of 25¢ to 95¢ and has 74 million shares outstanding.