Good Gold Recoveries Pushes De Grey Share Price Up (ASX:DEG)
De Grey’s Mining Ltd’s [ASX:DEG] share price has been pushed in reach of the key $1 mark on the back of high gold recoveries at its Hemi prospect.
The latest metallurgical work looks like DEG could be one step closer to beginning development at Hemi.
DEG’s announcement this morning coincides with the gold price breaking the US$1,800 mark for the first time since 2011.
At time of writing the DEG share price is up 4.89% or 4.5 cents to trade at 96.5 cents per share.
Over the past 12 months DEG shares have returned ~1,200%.
Metallurgy results pave way forward for DEG
Maybe you’ve read today’s announcement and were a bit confused by all the jargon — or maybe you haven’t.
Basically, the results of DEG metallurgy test work suggest that if they were to begin developing the site for mining, they would be able to recover the vast majority of gold ore dug up.
Without getting too into the nitty-gritty geology stuff, there are two types of ore to be aware of: oxide and fresh.
The important thing to note is that both can require different treatment methods to extract the contained gold.
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Oxide is typically easier to recover.
Fresh is often sulphide-rich and can require a more process heavy treatment method.
For oxide, using a method called a conventional carbon in leach (CIL) circuit (an industry accepted method), DEG claim they have produced a recovery rate of 93%.
CIL treatment, source: De Grey Mining
In the case of fresh, commonly used method called pressure oxidation (POX) was used.
This produced a recovery rate of around 96.3%.
POX treatment, source: De Grey Mining
Development a green light?
According to DEG, metallurgical works are still ongoing in order to optimise gold recovery.
DEG Managing Director Glenn Jardine said the results significantly de-risks the potential development of Hemi.
DEG said that we could expect further test work results later this quarter.
From previous metallurgical work done, the deposits neighbouring Hemi indicate they could also be treated using the same processes.
Be mindful that these results are not a firm green light for development go ahead.
However, they could be seen as a subtle nod.
The Mallian project, which hosts Hemi, is thought to contain about 2.2 million ounces of gold.
The objective now is figuring out how to extract it.
Which can be easier said than done.
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