Hemi gold project continues Tier 1 growth spurt 

De Grey Mining (ASX: DEG) is such a familiar name in the Australian gold sector that it is hard to believe it has been less than five years since its discovery of the Hemi gold deposit.

When the significance of the Hemi discovery in late 2019 was confirmed in early 2020, it sent the market into meltdown. This was mainly due to the potential scale of the new find, which was located in the Pilbara region of Western Australia, where intrusion-hosted gold mineralisation had rarely been encountered before.

The region is known for world-class iron ore deposits and, more recently, for significant pegmatitic lithium resources. It is now a critical mining hub with infrastructure that is able to support a future mining operation. This bolstered De Grey’s stated aspirational goal of establishing Tier 1 production potential from Hemi, with great potential remaining for further discoveries.

A definitive feasibility study (DFS) finalised in September 2023 confirmed Hemi’s Tier 1 credentials.

The DFS determined that the Hemi project would average annual production of 530,000 ounces of gold over the first 10 years for pre-tax free cash flow of $6.3 billion.

Since completing the DFS, De Grey has continued drilling at Hemi, with the aim of extending resources and making new discoveries to improve the DFS outcomes.

The company quickly identified potential to increase the scale of the Eagle and Diucon open pits based on extensions identified in drilling completed after the cut-off date for the DFS mine designs.

The mineralised extensions encountered below the Eagle DFS pit and shallower Diucon extensions have signalled potential for a substantial expansion of the current
Diucon–Eagle open pit shell outline.

These extensions resulted in a one-million-ounce increase in the Hemi JORC inferred resource due to depth and strike extensions at Eagle and Diucon.

In November 2023, De Grey included this upgrade in an updated JORC 2012-compliant mineral resource estimate for Hemi of 255 million tonnes at 1.3 grams per tonne gold for 10.5 million ounces of gold.

This included resources in the higher-confidence indicated category of 166 million tonnes at 1.3 grams per tonne gold for 6.9 million ounces of gold.

De Grey also hosts an additional 2.2 million ounces of gold within regional deposits, where it is conducting studies to bring these resources into standalone production.

The deeper drilling being carried out at Hemi will support De Grey’s conceptual studies into potential underground mining in the future. A conceptual study into this underground production has been undertaken and is one of a handful of potential options the company is examining to surpass the already impressive DFS outcomes.

De Grey is currently conducting a mix of drilling programs with air-core (AC), reverse circulation (RC) and diamond rigs spinning furiously. Exploration during 2024 will target additional extensions at depth, down plunge and down dip at the areas of Eagle, Diucon, Aquila and Falcon.

RC drilling will be undertaken at the Gorrion prospect, then move to follow up targets in the Antwerp and Scooby areas, which are all within a short distance of the main Hemi deposits. AC drilling is planned initially for sterilisation drilling of the Frillback area before moving to test prospective structures in the extensive Mount Berghaus area north of Hemi.

AC and RC drilling is planned to follow up targets in the West Yule to Egina joint venture with Novo Resources. 

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