ECR, through its wholly owned Australian subsidiary Mercator Gold Australia Pty Ltd ("MGA"), is focused on gold exploration in the state of Victoria.
MGA's tenement position in Victoria is detailed in the table below and in the figure to the left (updated figure pending following announcement dated 20 April 2020).
As well as its 100%-owned Bailieston and Creswick projects, MGA has the following interest in the Avoca, Moormbool and Timor projects (the "Projects") which were sold by MGA in 2020:
i. MGA will receive a payment of A$1 for every ounce of gold or gold equivalent of measured resource, indicated resource or inferred resource estimated within the area of one or more of the Projects in any combination or aggregation of the foregoing, up to a maximum of A$1,000,000 in aggregate; and
ii. a payment of A$1 for every ounce of gold or gold equivalent produced from within the area of one or more of the Projects, up to a maximum of A$1,000,000 in aggregate.
For more information regarding MGA's interest in the Avoca, Moormbool and Timor projects, please see the announcement dated 20 April 2020.
The Bailieston project is targeting epizonal or epithermal gold mineralisation of the Melbourne Zone, which hosts successful modern gold mines including the world-class Fosterville gold mine owned by Kirkland Lake Gold.
The Bailieston project is at the epicentre of the current gold exploration boom in Victoria, being located close to the highly successful Fosterville mine owned by Kirkland Lake Gold. This point is underlined by the arrival of Newmont Exploration in the district with an application for ground immediately to the north of the Black Cat prospect.
Bailieston is located approximately 150km north of the Victorian state capital Melbourne, with good road access. The project is located geologically within the major orogenic Lachlan Fold Belt (LFB). The LFB is subdivided into zones, based on distinct geological and metallurgical characteristics, with the Bailieston project lying to the east, within the Melbourne Zone.
The project area consists of Siluro-Devonian sediments intruded by Devonian granite stocks. Mineralisation is hosted by vein or stockwork structures, typically within anticlinal trap structures within the sediments.
The Bailieston area has a modest historical production history from alluvial and vein quartz mines. It has a more recent history of exploitation of low-grade, bulk mining stockwork or layered vein structures such as the Bailieston open cut mine which was operated by Perseverance Corporation Ltd in the 1990s.
Other modern nearby open cut gold operations which operated include Hill 158 at Nagambie, Red Hill at Heathcote and the various pits at Fosterville and Costerfield. These latter two continue to operate as higher-grade underground mining operations. The Fosterville mine is located approximately 50km west of the Bailieston project.
There is a gap in the historical workings from the HR3 area for approximately 800m to Cherry Tree to the south and for approximately 400m to the tenement boundary to the north, and there is potential in these zones for undiscovered mineralisation, particularly at depth.
The main Black Cat reef comprises a series of en-echelon quartz lenses within a shear zone, as is found at various other reefs within the Redcastle goldfield. Apart from quartz veined material that was mined historically, there exist siliceous pyritic sandstones and heavily fractured limonitic siltstones that can also be auriferous.
In Q1 2019, MGA completed a reconnaissance rotary air blast (RAB) drilling programme targeting numerous quartz reefs at Black Cat, with a total of 18 shallow holes for 485 metres being drilled. The prospect had never been drilled before. RAB drilling is a low-cost method well suited to the first pass, reconnaissance testing required at the Black Cat gold prospect.
Significant intersections from the drilling included 7 metres at 1.76 g/t gold from 35 metres in BCD11, 3 metres at 4.26 g/t gold from 16 metres in BCD18, and 1 metre at 6.3 g/t gold from 18 metres in BCD03. Intersections in this paragraph are apparent width. More details can be viewed here.
Important geological insights were generated by the drilling programme, which will guide further exploration at Black Cat and other prospects in the Bailieston gold project area.
The geochemical surveys utilised a portable XRF to delineate proxy minerals associated with gold. An arsenic anomalous zone up to 40 metres wide and more than 200 metres long was identified at Blue Moon, and previous work showed anomalism over a further 150 metres to the west. Previous rock chip samples included results of 12.1, 10.1 and 7.0 g/t gold, and previous soil surveys identified gold to 5.0 g/t. The diamond drilling at Blue Moon was intended to test the arsenic and antimony anomalies identified by the soil geochemical survey completed by MGA in early 2018.
Given the deep weathering and the potential for gold depletion in the oxidised sulphides, it was considered possible that higher grades would be encountered at depth in the fresh (un-weathered) rock. Obtaining samples from fresh rock was a key objective of the reverse circulation (RC) drilling completed at Blue Moon in February 2019. The twelve RC holes (BBM004-15, for 1,718 metres in total) aimed to intercept the sandstone on 50 metre spacing across three sections and to gain samples from beneath the oxide zone.
Gold mineralisation at Blue Moon is associated with sandstone plus dykes intruding the sandstone and adjacent to it. Sericitic alteration, silicification, sulphide development and gold mineralisation are restricted to the host sandstone with rare sulphides developed in the dykes. Quartz is generally low to absent, even in drill hole BBM007 where quartz was estimated at up to 2% and arsenopyrite at up to 1%.
The RC drilling results indicate that the host sandstone is thicker and the gold grades significantly higher on the westerly section, and further exploration will therefore seek to follow the system to the west, subject to agreeing access with landowners. Further exploration to the west would initially comprise surface geochemical sampling, potentially followed by drill testing.
The Creswick project is considered highly prospective for gold mineralisation hosted within the Dimocks Main Shale (the "DMS"), which extends over a 15km trend from the mining centre of Ballarat to the south, approximately 7km of which is covered by MGA’s granted exploration licence and exploration licence applications.
In the project area, the DMS is an approximately 25 m wide shale containing bedding- and cleavage-parallel auriferous quartz veins. The width of the shale and the occurrence of multiple veins in some zones indicates that potential open pit mining targets may present themselves as exploration progresses. Almost 1,500 shallow primary workings have been mapped in the belt from North Ballarat to Spring Hill (Creswick).
The DMS is the source of much alluvial and deep lead gold. Historical alluvial production is estimated at up to 2.5 million ounces in the Creswick/Berry lead system, and up to 11 million ounces in the Ballarat area as a whole, of which the DMS is a significant contributor.
The mineralisation has been confirmed as nuggety, which can lead to understated or overstated assays; accordingly, a process of whole-of-bag gravity concentration tests on the RC drill samples was completed in 2019. For more information, please see ECR's 5 November 2019 announcement.