Alliance Resources Takes Full Ownership at Wilcherry

THE INSIDE STORY: Alliance Resources (ASX: AGS) has become 100 per cent owner of the Wilcherry project, located within the southern part of the Gawler Craton in the northern Eyre Peninsula of South Australia.

Alliance Resources has been the senior partner in the Wilcherry JV for some time and has now purchased the remaining 18.59 per cent of the project for $1.5 million from the subsidiary company of partner Tyranna Resources (ASX: TYX).

Finalising ownership means Alliance now owns 100 per cent of the high-grade Weednanna gold deposit where a mining and processing scoping study is in progress.

The deal also delivers an 80-person camp on leasehold land located just 45 kilometres from the proposed mine site, in the township of Kimba.

Importantly, it also eliminates the administrative burden and costs associated with operating a joint venture and will streamline the future statutory approvals required at the time Alliance submits a Mining Lease Proposal in respect of the Weednanna gold deposit.

“Buying the remaining interest now, rather than later, is a logical move for Alliance,” Alliance Resources managing director Steve Johnston told The Resources Roadhouse:

“The majority party must buy-out the minority party’s interest in the project when the latter’s interest falls to 10 per cent or less as outlined in our ASX announcement dated 23 September 2016.

“By the time Alliance earns 90 per cent in the project, 18 to 24 months from now, the enterprise value of the project may be much higher than it is now, especially as we move towards production.”

In September 2018, Alliance announced a maiden Mineral Resource estimate for the Weednanna deposit of 1.097 million tonnes at 5.1 grams per tonne gold for 181,000 ounces of gold.

Approximately 45 per cent of the Mineral Resource has been classified as Indicated and 55 per cent classified as Inferred.

The Indicated classification corresponds with areas of higher drilling density and the Inferred classification with areas of lower drilling density.

From this, the company has concluded that the Inferred Mineral Resource reflects both modelled gold shoots with limited drilling and a decrease in the density of drilling with depth.

In addition, zones within the top 100 metres of the Mineral Resource area lack drilling, which Alliance believes to have potential for the discovery of new gold shoots based on historical drilling.

The company explained that the reported Mineral Resource comprises that proportion of gold contained within $2,000 pit shells of greater than 0.5g/t gold and greater than 2g/t gold underground potential.

This signals potential to increase the size of the Mineral Resource with further drilling as all 13 modelled gold shoots are open at in at least one direction.

Eighty-three per cent of the Mineral Resource occurs within 120 metres of surface (1,253 ounces per vertical metre) and is readily accessible using open pit or underground mining techniques.

News of the Joint Venture buyout came on the heels of some encouraging exploration activity at and around the Weednanna project as part of Alliance’s strategy to identify the potential for additional gold mineralisation within five kilometres of Weednanna.

The first was an announcement of gold results Alliance had derived from the re-analysis of historic iron ore drill samples at the Weednanna North prospect.

The Weednanna North prospect was originally explored by Ironclad Mining between 2008 and 2012 for economic concentrations of iron ore, drilling 12 diamond holes, for 761.4 metres and 127 RC holes, for 12,786 metres.

During 2018, Alliance Resources had all historic RC and diamond holes from the Weednanna North prospect systematically relogged for cross-sectional interpretation and 3D geological modelling, resulting in the identification of gold mineralisation at the prospect.

Eleven holes returned above two grams per tonne-metre (grade by thickness), including a best result of:

10WNRC027
22 metres at 0.34g/t gold from 42m in, including 2m at 1.12g/t gold from 42m.

“The broad gold-anomalous intersections we have identified at Weednanna North are similar to what we have previously observed adjacent to the high-grade gold shoots at the Weednanna gold deposit,” Johnston said.

Geologically speaking, the Weednanna North prospect consists of a northwest striking zone of calc-silicate and magnetite skarn altered Paleo-Proterozoic Hutchinson Group metasediments that are bounded by Archaean Sleaford Complex granite and gneiss.

The geology is very similar to the Weednanna Gold Deposit and there appears to be similar structural positions to those that host gold at Weednanna.

Due to the iron ore-based exploration activities of the previous owner, the Weednanna North Prospect has not previously been drilled to target favourable structural positions that may host high-grade gold.

Alliance has interpreted the gold assay results from its re-analysis to confirm the gold prospectivity of the area and indicate that the Weednanna North prospect is a priority gold exploration target that warrants further drill testing.

Next up was results from aircore drilling Alliance had conducted for gold at the Weednanna East prospect.

A program consisting eighty-five aircore drillholes was completed for 3,101 metres as a first pass test to extend known gold in regolith anomalism at Weednanna East.

This drilling program involved drilling of four lines of 50m by 200m spaced holes designed to test around the existing gold in soil and regolith anomalism and extend coverage to the west of existing RAB drilling at Weednanna East to cover a series of northwest striking faults.

The company received one metre scoop assay results with four of the holes returning greater than 100ppb gold with a best result of:

18WDAC078
2m at 1.31g/t gold from 49m.

The drilling demonstrated a zone of discontinuous gold anomalism of greater than 100ppb gold extends over 1,000m and remains open in the north.

From what Alliance has seen to date, it has determined the majority of the gold anomalism to have a northeast trend that is located towards the end of hole, near a saprolite/saprock boundary.

Given the iron-poor felsic nature of these host rocks, this is where the company expects the gold in regolith anomalism to concentrate.

Alliance considers the magnitude and distribution of gold in the regolith may be indicative of primary gold mineralisation and further drilling is warranted to better define the gold in regolith anomalies before bedrock drill testing.

“Weednanna East is the first regional gold exploration target to be tested proximal to the Weednanna gold deposit,” Johnston explained.

“We are very encouraged by these aircore drilling results which indicate to us the prospectivity of the district.”

 

Alliance Resources Limited (ASX: AGS)
…The Short Story

HEAD OFFICE
Suite 3
51 – 55 City Road
Southbank, VIC, 3006

Ph: +61 3 9697 9090

Email: info@allianceresources.com.au
Web: www.allianceresources.com.au

DIRECTORS
Ian Gandel, Tony Lethlean, Steve Johnston