Dynamic targets WA gold along strike of prolific Chalice mine

Dynamic Metals has launched its latest drilling program at its Chalice South prospect, part of the company’s Widgiemooltha project in Western Australia’s Goldfields-Esperance region, about 650 kilometres east of Perth.

The 13-hole reverse circulation drilling program is targeting gold anomalies defined through 3D modelling of historical data.

The prospective Chalice South area is on a mineralised corridor immediately south of the Chalice gold mine, owned by ASX-listed $3.5 billion market-cap goldie Westgold Resources.

Dynamic is eyeing five drill targets along strike from Westgold’s Chalice mine and plans to hammer them with the drill bit in the coming weeks. Drilling is due for completion before the end of the month.

The company has focused on the geological and structural settings along the trend to define the specific targets to test. It constructed a 3D geological model using historic drilling data, generating several new targets.

Local geology consists of north-northwest striking, west-dipping mafic and volcanic sequences. The eastern boundary is formed by the Pioneer Dome.

There have been multiple exploration programs in the area since the Chalice gold deposit was discovered, ranging from surface geochemistry programs to shallow drilling and targeted deeper drilling.

Dynamic’s ground covers 14 square kilometres of greenstone stratigraphy within the same structural corridor hosting the Chalice deposit. Initially developed by Resolute Ltd in the late 1990s, Chalice pumped out about 517,000 ounces of gold from 2.9 million tonnes grading a solid 5.6 grams per tonne (g/t).

An underground operation followed from Avoca Resources, for a further 993t going 3.91g/t, before the mine was placed on care and maintenance in 2015.

Chalice South represents an exciting opportunity for Dynamic to test a proven gold-bearing corridor that has already delivered significant historical production. By integrating modern geological modelling with the extensive historic drill database, we have been able to refine and prioritise new targets with real potential.

The company revealed last month it had revamped its lithium joint venture with mining heavyweight Mineral Resources at its Widgiemooltha project in the Southern Goldfields by modifying the key terms to extend the partnership and streamline its tenements.

The updated formal agreement expands on the original binding term sheet penned in March last year and provides for the two firms to narrow their focus on their lithium hotspots.

Under the original deal, MinRes can earn up to 80 per cent of the lithium rights attached to Dynamic’s fully owned leases over two stages for a total spend of $20 million.

The latest changes mean MinRes has an extra two years added to the stage two earn-in period, now extended to six years in total, giving the mining firm a longer run at spending its way to a deeper stake in the prized lithium ground.

Dynamic has also received the final $1 million of a $5 million cash injection from MinRes for stage one, locking in the latter’s initial 40 per cent interest in the lithium mineral rights across the joint venture ground.

The revised earn-in commitment for stage two has also been wound back from $15 million to $14 million. Dynamic believes this is still a considerable investment, underpinning MinRes’ continued belief in the potential of the Widgiemooltha region to deliver another significant lithium discovery.

With cash to splash from MinRes’ final $1 million stage-one lithium payment, Dynamic will tackle the drill program with gusto to see what the drill bit reveals.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au