There are some industry beliefs that in Australia, the quantity of gold in a field reduces with depth, which may have arisen due to the placers of the old goldfields like Victoria, or the perception that a number of orebodies are wine glass shaped, with feeders splaying out closer to surface. Perhaps that is why China’s gold mines have mainly been designed to end at depths of 500m.

Times are changing as are discoveries, within the past year we have encountered what appears to be a trend towards deeper discoveries such as the link zones at Abelle (now Harmony’s) Wafi in PNG, Sino Gold’s Jinfeng in China’s Guizhou Province, presentations by RIO (now Wheaton Minerals’) The Peak, and MPI’s Golden Gift at Stawell, plus Agincourt’s (AGC’s) new Calais discovery below 500m from surface.

Deep drilling requires deep pockets and has usually been only possible by the larger mining companies (unless the orebody can be found near to existing underground workings), with South African companies typically taking 12 years from discovery to the first gold bar (6 years to drill an area on an 0.5km to 1km drill-hole spacing, and 6 years to get down to 3km to 4km or so).

Even within Australia, that deep drilling by Newcrest cost about $1m per drillhole for Newcrest’s delineation of Ridgeway and Telfer Deeps with 1km long drillholes. However, with the takeover of a number of Australian companies by major gold companies, there are now a number of large companies in Australia that can invest in such deep drilling programmes.

Newmont for example reputedly has about 6 drill rigs at Martha Hill in Waihi (we saw some while visiting Heritage in New Zealand in mid-May 2004), that are drilling to a depth of about 650m below or adjacent to Union Hill, while Placer Dome’s Kanowna Belle has apparently either started or is about to start drilling a 2km long drill hole – probably revisiting the shaft consideration there. At some stage it seems likely that Newmont’s Callie in the NT will be drilled to greater depths.

The prize for deep drilling has to be the link zones since Wafi appears to be about 4 to 5moz and initial indications are that Jinfeng appears to be capable of achieving a similar result. These link zones, as in the case of Wafi, have often resulted from re-interpretation of the geology with a thick zone not simply a case of drilling down dip, or in Wafi’s case within an extensively mineralised drillhole a 35m length at consistently greater than 10g/t was historically interpreted as an isolated vertical lode. Interestingly, the majority of these new discoveries in the past year are refractory, and relatively high grade.

The link zones at Wafi and Jinfeng appear to be fairly flat and 500m to 1km or so long on strike (they can be folded, we visited Wafi in August 2003 and Jinfeng in March 2004) as shown in Figure 1 (being a composite section of Jinfeng), with intersections such as 159m at 6.5g/t at Wafi or 59m at 8.6g/t at Jinfeng.

Agincourt’s Calais discovery is much closer to home being in what was perceived as an over-prospected mining area which historically had a number of different owners and yet in amongst all those mined underground orebodies a new one possibly a typical 600,000oz to 1moz Wiluna orebody called Calais has been discovered.

Agincourt were not initially looking for Calais, and in fact stumbled across it. They had been looking for ore feed (when the Wiluna mine was being run by Newmont) and opened up Golden Age which was thought to be a small quartz vein of perhaps 50,000t or so and unlikely to last long (it is still being mined at about 10,000tpm at 10g/t). As Golden Age continued to be mined deeper (it is truncated along its western edge by the East Lode fault which at that position is almost north-south), the now Agincourt mine noticed that the Golden Age orebody started to splay across a wider strike and a number of higher grades were coming in along an almost east – west line that could be connected to the old Essex Pit above it.

Consequently AGC drilled a conceptual target of where the line of these high grades intersected the East Lode fault (the East Lode fault structure contains a number of material orebodies) and found Calais containing typical East Lode mineralisation, in a downhole intersection of 18.5m at almost 27g/t, reported on 29 January 2004. Since then, Calais has been extended to about 1km long and still remains open on strike and to depth, with even better intersections such as 34m at 9.2g/t reported to the ASX on 26 May 2004 (we last visited Agincourt’s Wiluna mine in mid-June 2004).

Calais in fact appears to connect between East Lode to the South and the Bulletin Woodley Lode to the north as shown in Figure 2 (from the 26 May release), and certainly appears capable of becoming a typical Wiluna 600,000oz to 1moz orebody. In addition to Calais, there is the Crispin discovery about 250m behind it on the West Lode fault with grades in the 5 to 6g/t region over 30m as reported in March 2004. Crispin’s discovery was based on Agincourt’s perception in the Wiluna field that if there is mineralisation on East Lode, then there is often mineralisation parallel to it on West Lode too.

So how had Calais been missed, well for a start, it was not supposed to be there. There is no sign of it on surface, it mainly starts at about 600m below surface. Older sections of the Wiluna mine’s orebodies show the mineralisation in broad south dipping shoots and Calais was well outside of the broad envelope. There was also a belief in the Wiluna field that because so much gold had already been found in the number of orebodies at a particularly level below surface, then there was unlikely to be more. Yet again “gold is where you find it, not where it is supposed to be”.

The Calais discovery could be the reason why Newmont stopped its sale of the Martha mine at Waihi mine in New Zealand, and started drilling deeper to 650m in earnest. However, the Calais discovery does highlight the fact that there could be significant orebodies still to be discovered at depth throughout the Australasian and Pacific region, often in what appear to be well explored goldfields, and such discoveries may simply be delineated at depth from the workings themselves, and/or re-interpretation of the geology.

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is an Authorised Representative with Taylor Collison Ltd, and with his associates, holds interests in a number of the stocks mentioned in this article. The opinions expressed in this article should not be taken as investment advice, but are based on observations by the author. The author does not warrant the accuracy or completeness of any information and is not liable for any loss or damage suffered through any reliance on its contents.