PNX’s Glencoe looks like another fountainhead with more gold near the surface
Near-surface gold at PNX’s Glencoe deposit in Queensland now exceeds 1.4 km and remains open, demonstrating the potential for growth on a similar scale to the company’s Fountain Head project just 3 km to the south.
PNX Metals (ASX:PNX) continues its successful run at Glencoe, with new drill results showing more near-surface and high-grade gold, which now extends over 1.4 km.
Top results included 2m at 8.58 grams per tonne (g/t) gold from 10m, 6m at 3.84g/t from 36m, 8m at 1.52g/t from 80m, 20m at 1.01g/t from 72m, 5m at 1.61g/t from 11m, and 12m at 1.05g/t from 43m.
Glencoe currently hosts an inferred resource of 2.1 million tonnes at 1.2 g/t for 79,000 ounces of contained gold.
But there’s a lot more blue sky with PNX not even close to touching the edges of this potentially large-scale system that remains open in all directions. PNX is now preparing to release an updated resource.
“Glencoe continues to strengthen with infill and step-out drilling complementing our previous results and supporting the potential to increase the scale of the deposit,” said Managing Director James Fox.
“Additional holes drilled along the easternmost traverse have returned high-grade gold and the deposit remains open in all directions.”
Fox said the geological comparison with Fountain Head suggested a similar scale gold system.
“PNX expects, with recently reported drilling and improved geological understanding, an increase in the total contained ounces reported to the proposed mine plan,” he said.
“We look forward to our 2022 exploration campaign with diamond drilling due to begin in late January, where we aim to add value to Glencoe and our overall Pine Creek exploration program. “
Of the 54 reverse circulation holes drilled by PNX at Glencoe, only six extended beyond 80m vertical depth as the company’s priority was to delineate near surface gold veins to maximize the potentially exploitable gold.
Short term production opportunity
Located approximately 170 km south of Darwin and 3 km north of PNX’s Fountain Head gold project, Glencoe represents a ‘complementary’ asset which has significantly extended the proposed development of Fountain Head.
Fountain Head – which currently has a resource of 2.94 million tonnes at 1.7 g/t for 156,000 ounces of gold – is becoming a regional processing center for mineral deposits in the Pine Creek.
A pre-feasibility study (PFS) of the Fountain Head and Hayes Creek gold-silver-zinc gold projects released in June highlighted a robust, multi-product, two-stage mine development that would have an initial life of 10 years , a tax pre-net present value (NPV) of $171 million and a pre-tax internal rate of return (IRR) of 63%.
NPV and IRR are measures used to assess the profitability of a project – the higher the number above 0, the more profitable it will be.
According to the PNX schedule, this budding gold producer is targeting the start of construction on the Fountain Head project in the second quarter of next year, followed by first production in early 2023.
PNX has completed several milestones since acquiring Fountain Head in early 2018, including defining and updating JORC-compliant resources, identifying opportunities to advance projected cash flows, submitting for government approvals and the completion of a pre-feasibility study.
This article was developed in conjunction with PNX Metals, a Stockhead advertiser at the time of publication.
This article does not constitute advice on financial products. You should consider obtaining independent advice before making any financial decisions.