Genesis extends drill range at Ulysses

DRILLS are turning, and multiplying, in and around the Leonora-Laverton-Leinster ‘golden triangle’ of Western Australia and the arrival of a diamond rig at Genesis Minerals’ Ulysses project on the weekend is set to ramp up interest in activity there.
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Genesis recently raised A$19.5 million at 4.2c to fund the $13.5 million acquisition of the Kookynie gold project, expanding its tenure around the Ulysses (JORC 8.5 million tonnes grading 3.2gpt gold for 867,000oz) production target to more than 650sq.km.

Along with another busy junior Saturn Metals, working to the east, Genesis has one of the biggest tenement holdings in a district with a number of multi-million-ounce gold deposits and big mills. The scope of a feasibility study on restarting mining at Ulysses via underground development, due for completion in the March quarter next year, has been expanded to take in potential supplementary openpit feed from the Admiral-Clark-Butterfly area (4.6Mt at 1.7gpt) added with the Kookynie deal.

Genesis said last week more than 3,000m of shallow aircore drilling in an area called Archduke immediately south-east of old opencut workings at Admiral-Clark-Butterfly "identified strong potential for shallow oxide gold resources" in a circa-1km-long zone of weathered saprolitic rocks thought to extend to 80m depth in places. The "target zone" produced RC results earlier this year from west of the new aircore activity that included 6m of 10.9gpt from 53m, 14m of 4.41gpt 24m, 9m of 4.02gpt from 57m, and 7m of 3.47gpt from 16m. Best of the latest results included 25m of 1.09gpt gold including 10m of 2.17gpt from 15m, and 15m of 1.03gpt including 5m of 2.4gpt from 40m.

Genesis said these and other results showed "potential to define initial shallow oxide gold resources at the prospect, prior to possible deeper drilling in future". It expects to start resource definition RC drilling at Archduke in the December quarter.

The company's main current focus is a 15km "corridor" from Ulysses to Orient Well (61,000oz).

Analysts from supporting Genesis broker Argonaut Securities who recently visited Ulysses said the area hosted a number of shallow north-northeast dipping shears, and steeper east-west orientated shears.

"The area [about 35km by road south of Leonora] is rich in gold mining history and infrastructure with the Gold Fields highway running through the middle of the tenement package," they said.

"Numerous pits lie along a 15km strike length and are connected by a series of high-quality unsealed roads that would be suitable for ore hauling to a central processing facility. The bulk of [the Genesis] tenement package is on granted mining leases. There are many suitable sites to position a processing facility, offices and camp, which could act as a hub for numerous openpit and underground mines.

"The Ulysses orebody is of sufficient grade and size to support a long-life underground mine, and the recently acquired Kookynie project provides several attractive options in terms of openpit mines."

Genesis' recently started 25,000m drill program targeting resource growth and extensions will include deeper (sub-150m) drilling on Ulysses and other targets.

"The Admiral, Clark and Butterfly deposits are parallel dipping structures that are open at depth," Argonaut says in a site visit report. "There has been minimal drilling below 100m, and there is the potential to extend the current known mineralisation down-dip.

"The objective is to mine a large openpit that opens up the entire area into a single mining operation. Genesis is also expecting to find similar repeat parallel structures between the know deposits. If this proved to be correct, the strip ratio of a large openpit would be materially reduced."

Two reverse circulation and now a diamond drill rig are on site. Genesis managing director Michael Fowler told MNN most of the planned drilling was to 120m depth or less, so resource infill and most extensional work planned for the remainder of 2020 should be comfortably completed.

"At Admiral-Clark-Butterfly there are a number of structures that have not been tested adequately or at all for near surface resource potential," he says.

"We will begin testing these structures from October onwards. We expect resource growth from this drilling.

"The initial [diamond] drilling will be focused on metallurgical and geotechnical drilling for the first few weeks at Admiral-Clark-Butterfly and Orient Well … [then it] will move to resource confirmation and extensional drilling at all of the resources.

"Our current focus is defining openpit resources.

"In terms of underground potential on the Kookynie tenements we believe there are significant opportunities.

"We are developing high-grade targets - both openpit and underground - within and around the current resources based on historic data and our geological mapping and 3D modelling over the past couple of months. These targets will continue to be defined as our geological knowledge grows.

"In terms of drilling we will begin testing these targets in the December quarter."

Genesis has seen a 160% rise in its share price since the start of 2020 to the current 8c, capitalising it at about $145 million. The company has cashed-up New South Wales miner Alkane Resources as a major shareholder.

Argonaut says Genesis controls 40km of strike "along the Ulysses trend which has never before been unified under a single owner".

"This allows [it] to undertake a systematic drilling program as it moves towards developing a stand-alone mining operation.

"The project offers significant value upside from both exploration success, and as a development proposition."