Alloy Resources Limited

Alloy Resources Limited

© 2019 Alloy Resources Limited

ABN 20 109 361 195  |  TERMS

The Horse Well Gold Project is located in the Warburton Mineral Field of Western Australia and is approximately 85 kilometres northeast of the town of Wiluna.

The Horse Well Gold Project occurs in the northern most part of the Yandal/Millrose Greenstone belt that hosts a number of multi-million ounce gold projects, such as Jundee, Bronzewing, and Darlot-Centenary gold mines.

Location

Warburton Mineral Field, Western Australia

Minerals

  • Gold

Project Location

Figure 1: Alloy's 950 km2 Horse Well Gold Project in the Yandal Greenstone Belt (view PDF)

The project is only 50 kilometres north of Northern Star’s 220,000 ounce per annum Jundee Operation, with excellent regional and local infrastructure.

Figure 2: Horse Well Gold Resources and Prospects (view PDF)

The Horse Well portion of the greenstone belt has only had focussed exploration along the southern part, where the Company and previous explorers have identified JORC gold resources in near surface deposits to date.


Gold Resources

Gold resources at Horse Well currently stands at 5,129,400 tonnes @ 1.5 g/t for 237,800 ounces.

AreaTonnesGrade (g/t)Ounces Gold
Palomino554,0002.4543,600
Filly SW85,8008.2422,700
Filly206,0001.328,700
Warmblood788,0002.153,900
Dusk til Dawn3,495,6001.0108,900
Total5,129,4001.5237,800

Table 1: Horse Well Mineral Resources (JORC 2012)


Exploration in this area in 2012-2013 has defined a new area of gold mineralisation at the new Warmblood prospect extending for 1 kilometre south of the Filly SW Resource.

Exploration in the region was relatively immature and in 2012 the Company commenced more regional exploration in the north of the project in an effort to see if the area had potential for a new large gold discovery.

The Crack of Dawn prospect area (Figure 3) was discovered by regional air-core drill testing of north-east faults interpreted from wide spaced aeromagnetic surveys by Eagle Mining in 1995. Two prospects were discovered by this drilling at Dusk til Dawn and Crack of Dawn, with a significant intersection of 11 metres at 3.6 g/t Au being present.

The Company followed up these areas with new air-core and RC drilling in late 2012 and through 2013. Results were very exciting with Dusk til Dawn returning a result of 30 metres @ 2 g/t Au from 144 metres depth, however markets and the gold price had become very challenging so the Company sought a Joint Venture partner to continue exploration.

Figure 3: Horse Well regional Prospects (view PDF)


Joint Venture with Silver Lake Minerals Limited

In May 2014 a Farm-in Joint Venture was entered into with W.A gold producer and explorer Doray Minerals Limted - who have subsequently taken over by Silver Lake Resources Limited ('Silver Lake').

Doray were exploring with a view to discovering a 1 million ounce gold deposit stand-alone, sufficient to support a 100,000 ounce per annum new mining operation.

The Joint Venture was renegotiated in January 2018 and Alloy purchased an 11% share back from Doray to become 51% shareholder and Manager, and is now sole funding exploration for $1.4 million until it reaches 60%.

Terms of the current JV are:

  • Alloy spend $1.4 million on exploration to earn a 60% interest.
  • Silver Lake can thereafter contribute or dilute. If any party dilutes to below 5% then it reverts to a 1% NSR.
  • The HWJV may nominate areas for a 'Small Mine' Development - for any Resource below 1.5 Moz, Area can be separated out of the JV, and Mining JV can elect to Mine, Process, Toll Mill or Sell.

Northern Dawn Exploration

The Northern half of the project area has had very limited gold exploration completed.

The area is almost completely covered by transported sand deposits making exploration very difficult.

A new geological interpretation from aeromagnetics suggested that the northern Dawn region may be the focus of a large gold mineralised hydrothermal system over a 50 square kilometre area with three main targets suggested from this interpretation:

  1. The 10 strike kilometre contact of the Crack of Dawn Granite with surrounding metasediments for ‘Granny Smith’ style gold mineralisation.
  2. ‘De-magnetised’ zones adjacent to older major faults and alteration of rock units.
  3. The major junction between western metasediments and eastern mafic rocks, interpreted to be the northern extension of the Celia shear.

Figure 4: Plan showing northern Dawn prospects and drilling (view PDF)

Figure 4 shows this interpretation and location of anomalous gold results from drilling up to the end of 2016. Work by the JV has confirmed the original concept and a systematic exploration program is being pursued to test the many targets.


Figure 5: Dusk til Dawn Plan showing gold distribution from RC drilling (view PDF)

Dusk til Dawn has been defined as an area with encouraging gold mineralisation with the JV completing staged Diamond, RC and Air-core drilling in this area.

Results appear to show a ‘Granny Smith’ style of gold mineralisation associated with the granite contact as shown in Figures 5-6 and the Cross Sections in Figures 7-8.

Figure 6: Crack of Dawn region Prospects and Targets (view PDF)

Figure 7: Dusk til Dawn cross-section A-B (view PDF)

Figure 8: Dusk til Dawn cross-section C-D (view PDF)


The Celia Shear has been the focus of extensive first-pass and follow-up infill air-core drilling during 2015 and 2016 which has been successful in defining a number of new gold prospects and trends at Django, Big Kahuna and Crack of Dawn South.

Results from the most recent programme of 390 holes totalling 23,637 metres of air-core drilling from holes allocated to 800 metre x 160 metre regional first pass drilling of an untested 7.5-kilometre section of the greenstone belt south of the Django prospect have been very encouraging.

The drilling has outlined three large anomalous gold trends extending south from the Django and Crack of Dawn South prospects:

  • 7-kilometre-long eastern anomaly
  • 6-kilometre-long central anomaly
  • 3-kilometre-long western anomaly
  • The eastern and central anomalies are associated with a newly defined extensive granite intrusive that appears to intrude the Celia Shear at the contact between western sedimentary units and eastern mafic units.

Future Exploration Activities

The Horse Well JV is focused on continuing to review the main Mineral Resource areas in the June Quarter 2019 and will focus on defining infill drilling programmes that can add further Resources.