From Warwick Grigor at Far East capital: Nagambie reported very...

From Warwick Grigor at Far East capital:

Nagambie reported very high grade gold/antimony intercepts

NAG has been drilling beneath the old Perseverance pit at Nagambie for the last six months in its quest for high grade gold and stibnite veins similar to those being mined by Mandalay at the Costerfield Mine, 45 km to the west. Assays were slow in coming through as the assay laboratory was having issues with the exceptionally high stibnite grades that the veins have been demonstrating.

Finally, the Company was able to release these assays last week. An investor rang to say he thought the report was good but he has trouble deciphering it. So, I will simply restate what it said.

Promises to be a high profit margin mine

The first point is that there are now eight intercepts within the C1 mineable cut-off grade zone that have delivered a weighted average antimony grade of 7.4% and a gold grade of 3 gpt, for a very high gold equivalent grade of 20.5 gpt. Given that the estimated mineable cut-off grade is 3 gpt AuEq, we can speculate that this is going to be a high profit margin mine when it gets going.

One of the tasks for the mining engineers from here is to determine what will be the best widths to mine given that there are a number of super high-grade, narrow intervals within broader, lower grade mineralisation. The minimum stoping with will be 1.2m, but there will be locations where this can be increased up to 5.9m to maximise the extraction of the minerals, based on the data available.

To start mining early with an exploration decline

The Company is sufficiently confident about the mineralised vein system that it has declared that in the first half of 2023, it is planning to design an exploration decline and associated underground development to access the C1 mineralisation at around 100m vertical depth, and enable strike driving of the antimony-gold veins on multiple levels. That will allow a quicker transition to mining than continuing to drill from surface.

Some truely impressive grades

There is an over-abundance of detail regarding individual intervals in the tables, so it is worthwhile going to the words that summarise the eight mineable intercepts expressed as metres of estimated horizontal thickness (EHT) these, being;

NAD002 2.5m at 27.0 gpt AuEq from 109m
NAD008 1.2m at 10.4 gpt AuEq from 178.8m
NAD009 1.2m at 6.3 gpt AuEq from 172.1m
NAD009 4.7m at 14.2 gpt AuEq from 200m
NAD010 1.2m at 59.1 gpt AuEq from 159.7m
NAD010 1.2m at 7.3 gpt AuEq from 163.6m
NAD011 1.2m at 3.9 gpt AuEq from 214.3m
NAD011 2.25m at 31.4 gpt AuEq from 270.7m

There are some truly impressive grades here. The fact that some are more modest in grade is a reflection of the variability of the Costerfield Mine-style vein system. Remember that each intercept is a very small window on what is down there. The geological mining consultancy used to calculate a maiden resource will have to exercise its skills once enough data points have been gathered.

Drilling is continuing with NAD012 suggesting the presence of another, parallel vein system 200m to the west of the C1 veins. Extremely high grade stibnite veins have been identified but not yet assayed.

The Bottom Line

This is a legitimate high grade discovery in keeping with the orebodies at Costerfield and Fosterville, though the antimony grades look as if they could be much higher (2-3x). That is noteworthy given the critical metal tag that antimony now carries and the reliance of the world on antimony from China, Russia and Tajikistan for 85% of supply. NAG has already received approaches from potential strategic buyers of antimony concentrates.

Nagambie can benchmark this project with the Costerfield mine that is producing at a rate of 150,000 tpa for 70,000 oz p.a. of gold equivalent production. That mine is already down to 600-700m depth while the Fosterville mine is down to 1,000m. Nagambie can expect the same, meaning a long life mine. This is a work in progress now, but the pathway to very profitable production appears quite predictable.

http://www.fareastcapital.com.au/imagesDB/newsletter/WeeklyComm19November2022.pdf