Australian-listed gold explorer New Age Exploration is planning further work in its Otago permit area next year, based on "encouraging results" from earlier low-impact prospecting permit work.
New Age Exploration (NAE) has applied for an exploration permit, from governement permitting agency New Zealand Petroleum & Minerals, and plans to undertake trenching and test drilling in three areas next year.
NAE has over the past two years narrowed down its search from 875sq km to a corridor of 71sq km, which crosses Lake Mahinerangi.
The corridor-shaped permit area covers the historical Otago Pioneers Quartz reef, mined more than 100 years ago, which yielded about 13gm of gold per tonne (g/t) of ore at the time.
Just southwest and 9km from the southern edge of the Mahinerangi permit is Gabriels Gully goldfield, which yielded more than 500,000oz of gold from 1861.
NAE had two prospecting permits: Teviot to the east of Roxburgh and Mahinerangi to the northeast of Lawrence.
Teviot, initially covering 458sqkm, has been dropped as it did not show gold as expected, while Mahinerangi has been scaled down from 4167sq km to 71km, under the exploration permit application.
NAE’s technical director Neil Hutchison said the prospecting test results could "significantly" extend the the length of the original OPQ reef as a further exploration target.
Given the "encouraging results", NAE had lodged an application for exploration before its existing prospecting permit expired, which meant it had "priority status" for consideration, he said in a market update last week.
There had been gold shows from some recent auger soil sampling, with several samples returning more than 0.5g/t and up to 1.4g/t gold from soil sampling.
"This suggests structurally controlled gold-bearing veins exist within the schistose host-rocks below the windblown cover, extending along strike in both directions away from the historic OPQ Reef," Mr Hutchison said.
Dr Doug MacKenzie and colleague Prof Dave Craw, of Otago University, believe the southeastern side of the schist belt on the two permitted areas could have similar gold mineralisation as the Macraes end of the belt.
Macraes has been the mainstay mine of Oceana Gold for the past 28 years and is closing in on producing its 5millionth ounce, from combined open cast and underground mining.
The NAE prospecting programme was a relatively modest $150,000 and came in well under budget.
The low-impact sampling had included 877 soil samples of up to 400g each, taken by hand auger to depths of up to 2m, and the collection and analysis of 246 rock-chip samples. A "man-portable" drill was used to drill 21 holes to a depth of 6m, most of which penetrated the thick layer of loess, a silty sedimentary deposit.
Mr Hutchison said a work programme for 2019 was being designed with consultants CRL Energy.
He said the loess cover was thinner in the northern sector of the target are, so trenching and rock sampling was being planned, while in the centre and southern part of the permit the soil cover was thicker.
Those areas would be test drilled to intersect bedrock, testing for gold veins.
"The drilling is designed to access three areas between the forestry and conservation area to initially establish the geology and prospectivity of the trend," Mr Hutchison said.
NAE said last year the new mapping by Dr MacKenzie on both permits had provided better resolution of the regional structure of the metamorphic basement rocks, but had not identified any significant shear zones for potential gold mineralisation.
However, both Dr MacKenzie and Prof Craw believe there could be gold mineralisation on the southeastern side of the schist belt. Dr MacKenzie told delegates at the annual conference of the New Zealand branch of the Australian Institute of Mining & Metallurgy in 2016 he was looking for a "mirror image" of what was at Macraes, but said geological information on the area was "rudimentary at best at present".
Prof Craw has been studying and comparing minute gold flakes and small nuggets from Macraes with those recovered in the southern zones,
seeking similarities in where they are from and how they were transported and broken down.
• Melbourne-based NAE had major management changes a month ago when Gary Fietz stepped down as managing director and Neil Hutchison, Joshua Wellisch and Stephen Layton were appointed directors. NAE then announced a review of the company’s strategic direction, with potential to rationalise the project portfolio and reduce costs.
Fresh capital was being sought including "significant contributions" from incoming directors.
NAE’s most advanced project is the Redmoor tin-tungsten project in the UK. A second tranche towards raising $A1.6 million in a placement was completed, with $A872,000 going to the Redwood project. As at the end of September, NAE had $A1.07 million cash in hand.
— Additional reporting: NZRESOURCES.
