Nexus Minerals Ltd (ASX:NXM) has initiated a new underground mine study for the Pinnacles Joint Venture (JV) Gold Project, opting to reassess the asset’s potential after gold prices more than doubled since the last review.
Pinnacles deposit sits within the jointly owned tenements with Northern Star Resources (NXM 90%:ASX:NST 10%), host to a mineral resource estimate of 609,000 tonnes at 4 g/t gold for 78,000 ounces.
The underground portion of the resource accounts for 450,000 tonnes at 4.6 g/t gold for 66,000 ounces of gold, representing the majority of the resource.
Just 13 kilometres from the Northern Star Carosue Dam Processing Plant, with a sale agreement already in place for Northern Star to buy any ore from the project, NXM sees Pinnacles as a potentially valuable near-term opportunity.
Gold prices continue to set highs
“With the gold price continuing to break all historic records this is a great time to be reviewing Pinnacles,” Nexus Minerals managing director Andy Tudor said.
“Over the last year, we have seen gold price continuing to diverge above costs, generating improved margins across Australian gold mining operations.
“The Pinnacles project is uniquely positioned with much of the permitting already in place and an Ore Sale and Purchase Agreement providing a treatment solution.
“This agreement stipulates that Nexus must sell all ore to Northern Star and Northern Star must buy the ore as per the agreed terms.
“Updating the Pinnacles Gold Deposit Mine Study is being undertaken in tandem with the scoping study work currently being undertaken at the Crusader-Templar Gold Deposit at the nearby Wallbrook Gold Project.
“We look forward to sharing updates on both projects”
Development studies well advanced
Nexus has also already completed geotechnical, groundwater, waste rock characterisation and metallurgical studies (recoveries exceed 97%) for Pinnacles, with flora and fauna surveys cleared.
The project sits on a granted mining lease, with a clearing permit in place, allowing for a rapid, low-cost development should the underground mining study point to favourable economics.
Importantly, the deposit also has potential to grow further, having previously generated results up to 5 metres at 20.9 g/t gold from 88 metres of depth and remaining open for further exploration below 300 metres.
NXM has engaged its chief operating officer and mining engineer Will Coverdale to lead the mine study update, with the aid of several underground mining contractors and support services contractors to refine mine planning and provide detailed costings.