Peter Batten – De Grey Mining
ONE OFF THE WOOD: Having its Australian Joint Ventures under control of its partner companies has enabled gold explorer De Grey Mining to gain a foothold in South America. Managing director Peter Batten dropped in to give us the low down.
You are involved in a number of projects located in Australia; however it appears De Grey’s fancy is more focused on South America?
All of our granted projects in Australia are in Joint Ventures that are under management by the other companies involved, whilst we retain an interest in them we don’t control any of those projects anymore.
When was De Grey lured offshore by the pulsating Latin rhythms of South America?
Two years ago the company wanted to refocus and started looking at different projects in different locations around the world.
De Grey saw Argentina as a great opportunity so they picked up some ground and since then has conducted some early exploration work that has delivered a good level of success.
Our projects are mainly situated within the Deseado Massif, which is a geological region of low-sulphidation epithermal gold-silver mineralisation that has been recognised only relatively recently.
Resources and ore reserves discovered in the region since about 1990 total 19 million ounces of gold and 580 million ounces of silver.
With that mix of ongoing and prospective projects how would De Grey classify itself these days?
We like to think of ourselves as being an Argentina-focused gold explorer or as an epithermal gold explorer.
At the present moment we are focused on Argentina, but we wouldn’t pass by any project in any other jurisdiction if we considered it to be worthwhile.
You have a handful of projects over there, is there any particular order of preference at present for which maybe commanding most of the company’s attention?
At this stage we have only completed two field seasons in Argentina.
Our projects are all at the grassroots level, which means we have been conducting greenfield-type exploration so far. After two field seasons we have had some success.
One project in particular, the Sierra Morena 6, or SM6, anomaly – which is part of the Sierra Morena project in the Santa Cruz province of Argentina, is looking very good and we hope to commence drilling there in October.
We have identified two discrete zones of epithermal quartz veining with good gold grades and silver values on the SM6 prospect.
At the Eastern Zone rock chip samples returned up to 23.3 grams per tonne gold and 3,240 grams per tonne silver over strike of just under 800 metres.
The Western Zone is partially outcropping quartz veining and siliceous breccia with coincident anomalies over a strike distance of more than 1.2 kilometres.
Rock chip samples from here returned up to 7.2 grams per tonne gold and 755 grams per tonne silver.
So that all gives us reasonable size combined with reasonable grades on the surface.
You describe what you have identified at SM6 as an epithermal system, what does that mean?
These types of epithermal systems have tell-tale signs in regard to certain element levels and such, and what we have at SM6 is, what appears to be, that we are very close to the gold-silver zone of a low-sulphidation epithermal system.
That means the drilling will be shallow – between 50 to 200 metres, which hopefully means we have a very good chance of hitting something with our first drilling program.
The down-side for low-sulphidation epithermal systems is that they can take a lot of drilling, which is not the mandate of a junior exploration company.
You have another target, the Vein Breccia Zone, which is also located on the Sierra Morena licence area, how is that shaping up?
The Vein Breccia Zone is showing very good grades on the surface. It is a little bit higher in the system so we may need to drill a bit deeper there.
Are they the only two drill targets you have identified so far?
No, we have another project earmarked for drilling in October called the Pachi project.
That target is 400 metres long and 80 metres wide, which is quite extensive.
The type of material that we are seeing there is very similar to that at the El Tranquilo project of Patagonia Gold, which is located just to the west of us.
It sounds like you have landed in a fairly decent neighbourhood as far as gold exploration in Argentina goes?
That’s why the company selected the project areas it did.
I can’t take the credit for it all as I only just started with the company about nine weeks ago, but the quality and the potential of the projects were what attracted me to join.
There are two areas in southern Argentina that are great in terms of exploration for epithermal gold.
These are the Deseado Massif, where we have most of our projects and the Somuncura Massif to the north, where we also have some projects we are currently working on as well.
How does Argentina rate with other South American countries as far as exploration?
The deal with Argentina is that it hasn’t been over-explored to the extent of some of the others such as Chile, or Brazil.
That’s because gold wasn’t discovered in the Patagonia region of Argentina until the middle of the 1980s and then a volcano erupted in 1991 covering the region in over a metre of volcanic ash, which had a detrimental effect on any low-level surface exploration.
The past 15 years has seen some concentrated exploration activity that has identified a number of deposits, but they’re mainly ones that are sticking out of the ground and are pretty obvious.
We’re in the second stage of discoveries with the ground we have as the deposits are just sticking out of the ground.
It’s not something you can see from miles away; you have to walk over the top of it, but it is possible to find large deposits here, because it is under-explored.
There seems to be a bit of an exodus of Australian exploration plays heading to South America these days?
South America has, in a sense, been the operating ground of companies from Canada and the United States.
Australia hasn’t really been overly represented there. Our stronger economy has changed that.
During the last boom the Canadians tied up a great deal of land in the region. Now they are withdrawing from the area, resulting in a lot of the ground becoming available.
That’s where we came in. Our team went in and looked at he projects and identified the ones with the good geology and pegged them, or did deals with companies that held them. That’s how we got SM6.
How is the De Grey South American timetable looking for the immediate future?
We will be drilling at SM6 and at Pachi in October. At the same time we will continue with our ground work at the other projects with the intention of advancing them all.
That will see us at our Boleadora prospect – a Joint Venture with Kingsgate – in the north western Deseado Massif in December.
We should also complete first pass exploration at Rio Negro where we have secured exploration rights over 1,420 square kilometres of ground within the Somuncura Massif.
We expect it will take us at least two field seasons for each project before we start generating drill targets.
Most of our projects have only gone through one season, which means we have only trodden on 60 per cent of our ground so we have to go and do a first pass over the other 40 per cent as well.
We’re going to be busy.