Meeka Metals (ASX: MEK) is set to plunge 22,500m worth of underground and grade-control drilling into its Murchison gold project in Western Australia’s Mid West region in a bid to unveil new mining areas to help fill its recently-expanded processing capacity.
The company has also confirmed a new drill-for-equity deal with Subiaco-based contractor Topdrill ahead of the campaign that will include 7500m of reverse-circulation (RC) drilling designed to assess high-grade plunging shoots beneath oxide open pits at its Turnberry mine. The shoots remain open and feature gold intercepts from earlier drilling including 21m at 6.6 grams per tonne, 9m running 10.4g/t, 12m going 6.7g/t and 18m at 4.1g/t.
A further 15,000m of RC drilling is earmarked for grade-control drilling in Meeka’s open-pit mine resource areas, with a view to picking up the pace of production and confirming the current mine plan in light of the improved processing capacity.
The extra capacity has come as a result of the company’s recent acquisition of a 750kW Outokumpu ball mill, associated drive elements and support infrastructure. Management expects it will improve processing capacity by about 30 per cent, translating into a lift in throughput to some 640,000 tonnes per annum.
Having expanded processing capacity, increasing throughput by 30%, we are now moving forward rapidly to fill that capacity with high-margin underground production from new mining areas not considered in the DFS due to previous processing capacity constraints.
Meeka Metals Managing Director Tim Davidson
Management says it is aiming at bringing two underground mines – Turnberry and Andy Well – into production in the medium term to feed ore to the operation’s expanded capacity plant at an average grade of about 4g/t to 5g/t gold.
It adds that the proposed two-mine operations and new mill combo is expected to materially improve production and cash flow at the project to exceed its DFS numbers and that any increase in resources from the upcoming underground drilling will further build on that development.
The Murchison gold project embraces 281 square kilometres of tenure about 40km north-east of Meekatharra in WA’s Murchison region, including granted mining leases hosting Meeka’s high-grade 1.2 million-ounce mineral resource at an average gold grade of 3g/t.
The drill-for-equity agreement with Topdrill will also materially sustain the new push. It will allow Meeka the option of issuing shares worth up to $1 million to Topdrill to satisfy up to 40 per cent of the drilling costs.
Topdrill has also engaged in drill-for-equity agreements with Aurumin at its Sandstone gold project and with Buxton Resources at that company’s Graphite Bull project and to test electromagnetic conductors at its Narryer projects.
Meeka’s near to medium-term activities include gaining final credit-approved documentation for the overall Murchison project development facility this month and the construction of a 20km-long haul road between the open pit and processing plant site next month.
September will also see the continued installation of the camp and infrastructure package at Murchison following its transport from Sandfire Resources’ DeGrussa operation.
It will be interesting to see what comes out of the first batch of analytical results from Meeka’s new underground drilling, with a likely unveiling expected in November.
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