De Grey Mining Limited (ASX: DEG, 'De Grey' or the 'Company') is pleased to report that the Mallina Gold Project Mineral Resource Estimate (MRE) update has been completed by Cube Consulting Pty Ltd, based on additional drilling and assay results to 7 March 2023 at the Hemi and Toweranna gold deposits.
The other Reg
Overall, the MRE increases include: ? Hemi increased by 12% contained gold to 9.5Moz
The Diucon resource increased by 44% contained gold to 2.4Moz
Hemi JORC Indicated category increases from 5.8Moz contained gold to 6.9Moz
The Hemi resource below 390m depth totals 1.0Moz ? Mallina Gold Project (MGP) increased 11% to 11.7Moz
MGP JORC Measured and Indicated categories increased by 18% to 8.1Moz
The Hemi MRE is based on 439 diamond drill holes for a total of 133,574m and 1,033 reverse circulation (RC) drill holes for 249,192m including pre-collars completed between February 2020 and the March 2023 cut-off date. The DFS is well advanced and due in the September Quarter 2023. This DFS will provide an updated assessment of mineable resources, Ore Reserves and economics of the project.
Hemi Mineral Resource Update
The Hemi gold deposit is located centrally within De Grey's 1,500km2 Mallina Gold Project and immediately southwest of Port Hedland in the northern Pilbara region of Western Australia. The project benefits from its close proximity to Port Hedland's major infrastructure network, including major highways, port facilities, gas pipelines, overhead 220kV electrical powerlines and associated power stations.
Additional drilling during 2021 to 2023 has focused on improving the density of drilling within, and resource extensions to, the maiden MRE. This has culminated in this MRE update based on assays to 7 March 2023. All deposits remain open at depth and along strike. Drilling continues to test for extensions to the known deposits at Hemi and new discoveries within the Greater Hemi region. Gold mineralisation at Hemi is primarily hosted in a series of intermediate intrusions associated with sulphide (pyrite and arsenopyrite) stringers and disseminations within brecciated and altered quartz diorites that intrude into the surrounding Archaean aged Mallina Basin sediments. The Archaean basement is eroded and truncated by a 25m to 45m thick horizon of recent transported sediments that are barren of gold mineralisation. The Hemi style of mineralisation was previously unknown in the Pilbara region and shows a scale of gold mineralisation not previously seen in the Mallina Basin. A Preliminary Feasibility Study (PFS) was completed in September 2022, based on the May 2022 MRE. This included a Maiden Ore Reserve for Hemi of 5.1Moz @ 1.5g/t Au. The PFS highlighted an open pit mining scenario and on-site processing basedAn average 550,000ozpa over the first 5 years An average 540,000ozpa over the first 10 years at an average processed grade of 1.6g/t Au/ The PFS provided strong and robust economics which are expected to be improved upon during the DFS currently underway. The DFS is expected to be completed during the September Quarter 2023 and is based on this June 2023 MRE. The June 2023 MRE for Hemi is summarised below by deposit and then by the depth breakdown for open pit (above 390m depth) and underground (below 390m depth) on a 10Mt annual throughput.
De Grey GM Exploration, Philip Tornatora, commented: 'Hemi is Australia's largest undeveloped gold deposit and continues to grow. Work during the last 12 months has upgraded the resource to a high confidence level to support delivery of the DFS. Drilling has provided a significant lift in Indicated resources, expanded open pit resources (particularly at Diucon and Eagle) and provided geotechnical and metallurgical data to support the DFS. The Hemi resource below 390m has now reached 1Moz and conceptual studies are planned to determine the potential of an underground mining operation to add to the Project mine life and the current PFS production rate of 540,000ozpa through the potential delivery of higher grade material to the plant. Drilling beneath the open pits at Hemi has demonstrated that the large mineralised system remains open. Our ongoing exploration is targeting strike and depth extensions to the Hemi deposits, new shallow potential resources adjacent to Hemi, as well as new large-scale discoveries at Regional prospects. Work is also ongoing to expand and upgrade the Regional deposits.'
De Grey Managing Director, Glenn Jardine, commented: 'Resource definition drilling completed for the 2023 MRE update at Mallina has succeeded in increasing Measured and Indicated resources from 6.8Moz to 8.1Moz with Hemi Indicated resources increasing from 5.8Moz to 6.9Moz. 'The increase in Indicated resources has been aimed at improving the overall Ore Reserve and percentage of Ore Reserves within the DFS production profile. Increased Ore Reserves will further de-risk the project and maximise its debt carrying capacity. The DFS is advancing to plan and due for completion in the September quarter 2023.'
The current combined strike of the six current deposits at Hemi is approximately 5.5km. Where comprehensive drilling has been conducted at the deposits, the combined gold endowment is approximately 23,500 ounces per vertical metre. This gives some indication of the deeper potential at Hemi, where all the deposits remain open at depth. Limited drilling has been conducted below 390m depth as drilling has focused on increasing the confidence of resources likely to be exploited by large scale open pit mining methods. However, a Mineral Resource of 1Moz has been defined below 390m depth at Hemi and there is strong potential to increase the deeper gold endowment, particularly at Diucon and Eagle, where drilling continues to intersect broad zones of mineralisation beyond the limits of the resource model. Similarly, the down plunge potential to the southwest of Brolga and below Aquila/Crow are other high priority areas. In addition, numerous shallow targets remain to be followed up near the Hemi deposits. Current drilling is concentrating on shallow, open pit targets between and to the west of the Diucon/Eagle deposits and at Antwerp, in addition to Brolga South and Falcon South. Drilling of conceptual targets in the Greater Hemi region near surface and at depth also have the potential to discover new large scale deposits. Drilling during the next 12 months will aim to extend the known deposits at Hemi at depth and along strike, and test priority targets within the Greater Hemi region based on geochemistry, geology and geophysics
Contact:
Glenn Jardine
Tel: +61 8 6117 9328
Email: admin@degreymining.com.au
The information in this report that relates to Exploration Results is based on, and fairly represents information and supporting documentation prepared by Mr. Phil Tornatora, a Competent Person who is a Member of The Australian Institute of Geoscientists. Mr. Tornatora is an employee of De Grey Mining Limited. Mr. Tornatora has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves'. Mr. Tornatora consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
Forward Looking Statements
These materials prepared by De Grey Mining Limited (or the 'Company') include forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as 'may', 'will', 'expect', 'intend', 'plan', 'estimate', 'anticipate', 'continue', and 'guidance', or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licenses and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation. Forward looking statements are based on the Company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company's control. Although the Company attempts and has attempted to identify factors that would cause actual actions, events, or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant securities exchange listing rules, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
To assist in defining reasonable prospects for eventual economic extraction (RPEEE) for Hemi, pit optimisation work has been undertaken by Cube on the block model, and the resulting shells have been used to guide the constraints for the declared resource. The optimisations were run at a gold price of AUD $3,000 per ounce, with mining costs varying with depth, but averaging AUD $9.33/BCM for ore and AUD $7.88/BCM for waste (down to the -405 mRL) A fixed residual of 0.1 ppm Au after processing was assumed, rather than an overall processing recovery. Processing costs (including G&A) of AUD $30.01 per tonne for all material type used. Wall angles used are based on detailed geotechnical analysis of the wall rocks at Hemi and vary based on the rock type and oxidation type. Spot gold price in mid-April 2023 was AUD $2980 per ounce, so an assumed optimistic gold price of $3,000 per ounce is reasonable. The optimised pit shell at Brolga reached a maximum depth of 450 m below surface (-390 mRL), for Diucon it reached a maximum depth of 470 m below surface (-410 mRL), and the maximum depths for the shells for the other deposits was 400 m to 420 m below surface (-340 to -360 mRL). Therefore -320 mRL (390 m below surface) was selected as the level dividing open cut from underground resources. This is a depth increase of 20 m to the open cut level used for the April 2022 MRE. The underground resources have been reported above a cut-off grade of 1.0 ppm Au. The cut-off grade has been lowered from the previous cut-ff of 1.5 ppm Au considering the possibility of applying bulk underground mining methods. Appropriate mining cost and gold prices have been used to determine the cut-off grade.
DE GREY MINING LIMITED 
