MOD Resources reaches 60 per cent of Sams Creek

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THE DRILL SERGEANT: MOD Resources (ASX: MOD) has earned a 60 per cent interest in the Sams Creek gold project in New Zealand from Oceana Gold Corporation (ASX: OCG).

OceanaGold has accepted the increase of MOD’s interest in Sams Creek from 40 per cent to 60 per cent after the completion of MOD’s Stage 2 drilling program.

To earn 60 per cent, MOD was required to complete an infill drilling program to convert at least 550,000 ounces of the one million ounce Inferred Mineral Resource at Sams Creek into the Indicated Mineral Resource category.

The revised Stage 2 Mineral Resource estimate includes a JORC Code-compliant Indicated Mineral Resource of 575,000 ounces of gold, based on 10 million tonnes at 1.77 grams per tonne using a 0.7g/t cut-off grade.

MOD’s Stage 2 drilling program intersected several wide, high-grade gold zones including:

–    19.6 metres at 6g/t gold;

–    16.2m at 5.2g/t gold;

–    31.1m at 3.6g/t gold; and

–    63m at 2.4g/t gold, including 11m at 4g/t gold.

 

Geology of Sams Creek showing Stage 2 Mineral Resource within a one
kilometre portion of the porphyry dyke. Source: Company announcement

 

The company said its 60 per cent interest in Sams Creek has been submitted for consent to New Zealand Petroleum & Minerals and Oceana Gold has lodged the formal transfer documents.

Consent was obtained for the terms of earn-in agreement last year.

MOD considers the earning of 60 per cent of Sams Creek represented a significant milestone for the company since it negotiated its agreement with Oceana Gold in October 2011 to earn up to 80 per cent of Sams Creek by sole-funding staged exploration programs.

“Having earned 60 per cent of Sams Creek we can now focus our efforts on the Stage 3 drilling program, which aims to test for extensions down-dip and along strike from the Main Zone gold deposit,” MOD Resources managing director Julian Hanna said in the company’s announcement to the Australian Securities Exchange.

“The porphyry dyke which hosts the gold mineralisation at Sams Creek extends for about seven kilometres over the Sams Creek and adjoining Barrons Flat permits, so we have only tested part of the potential of what could be a large gold system.”

MOD has commenced its Stage 3 drilling program and this program, which has already extended gold mineralisation at the Main Zone to approximately 350m below surface, with grades of up to 3m at 7.27g/t gold.