The Marydale Project is a virgin gold discovery of possible high sulphidation epithermal origin located 60km from the PC Project. In November 2015 the Company announced the signing of a binding term sheet giving Orion the right to acquire the unlisted company, Agama Exploration & Mining (Pty) Ltd (Agama), a South African registered company which through its subsidiary companies, ultimately holds an effective 73.33% interest in the PC Project and the Marydale gold project (Option). The commercial terms were revised in May 2016 and are detailed below. The projects have a well established Broad Based Black Economic Empowerment (BBBEE) ownership structure (26.66% ownership) in place with strong local partners.
Marydale was initially discovered by Anglo American Prospecting Services (“AAPS”)during exploration primarily focussed on Cu-Zn mineralisation between 1978 to 1981. Exploration included geophysical and geochemical surveys (IP, ground magnetic, soil and sub calcrete sampling) as well as 732 shallow scout percussion holes for 1,600.5m, followed by 13 deeper percussion and diamond holes for 2,011.2m which tested induced polarisation (“IP”) and geochemical anomalies.
AAPS returned to site between 1988 and 1989 to assess the potential for gold mineralisation in the area. This exploration phase included a programme of trenching, pitting and drilling. Drilling included 157 shallow percussion scout holes, four diamond holes for 329m and seven other holes for 193m.
Like many others in the belt the project was relinquished due to prevailing economic circumstances with the next phase of work was carried out by Agama between September 2011 and May 2013. Following review and confirmation of AAPS results 74 percussion holes for 3,056m were followed by 31 diamond holes for 3,341.1m being drilled.
Agama’s drilling returned very encouraging results, including the following intersections:
(Refer ASX Release 18 November 2015)
However historical drilling following the discovery was carried out in various orientations and, despite wide zones of mineralisation being returned, the majority of these intersections are now seen to be at sub optimal orientation.
Orion’s Exploration – NW Quadrant
Orion’s recent drilling has focused on obtaining oriented drill core through the higher grade zones intersected in historical drilling. Structural geological data from these holes is being used to generate a robust geological model for the prospect.
Assay data has been received from OWCD032, the first of the two completed drill-holes at Marydale, with a thick intersection of 64m at 1.55g/t gold and 0.26% copper returned from 22m down-hole. This intersection includes a higher grade interval of 21m at 2.93g/t gold and 0.34% copper including 5m at 5.09g/t gold and 0.37% copper (see Figures 1 and 2). The broad zones of mineralisation intersected in this hole are consistent with historical drilling.
Figure 1: Plan showing results from OWCD032 and historical drilling at the NW Quadrant area of Marydale Project.
Figure 2: Cross Section showing results from OWCD032 and adjacent historical drilling.
Initial interpretations based on data from the oriented core have made it clear that the host lithology is in a structurally complex folded and sheared package. Significantly, multiple zones of elevated mineralisation were intersected in OWCD032, which may imply a repetition of the mineralised strata due to folding or faulting. Individual lenses of mineralisation may also be fault or shear bounded and terminate abruptly (Figure 3). Structural data is being collected and interpreted for input into the geological model and use in targetting follow up drilling.
Figure 3: Highly mineralised core intersected in hole OWCDO33 between 70m – 74m. Pyrite (5%-15%) is partially oxidised to haematite and limonite at this depth. Lithology is structurally complex, folded and sheared. The white line marks orientation reference line.
Most importantly, a strong correlation between gold-copper mineralisation and sulphide content (reaching >25%) is observed (Figure 4), indicating that electrical geophysical techniques may be used to identify accumulations of mineralisation and placing higher significance on historic induced polarisation (IP) survey data, which indicates an extensive conductive body (Figure 5).
Figure 4 Highly sulphidic, blebby and net-textured sulphides associated with elevated gold-copper mineralisation, indicating suitability for EM detection.
Orion’s Exploration – Regional
Orion’s geological team has concluded that the primary tool to effectively target the highly sulphidic mineralisation similar to that intersected in the NW Quadrant area of the prospect, will be a combination of magnetic and conductivity data (from IP surveys). AAPS carried out an IP survey in the 1970’s which successfully delineated conductivity anomalies which led to the successful drilling in the NW Quadrant summarised above (Figure 1).
This IP survey also delineated further large anomalies to the south-east which are coincident with low order, surface, copper and/or zinc geochemical anomalies (Figure 5) that are of similar intensity to those encountered over the NW Quadrant area. Historically, only first-pass testing of these anomalies was undertaken with reconnaissance drilling, yielding the following anomalous results that are consistent with drill results drilled in the halo around the mineralisation in the NW Quadrant:
It should be noted that hole EYP3 was abandoned before reaching target depth. The intersections above are not significant intersections as they are not above 1g/t gold, but the anomalism present is geologically important and is being used to guide future exploration.
The Company considers that the historical IP survey also did not adequately cover the historical geochemical anomalies. Accordingly, plans are being progressed for geophysical surveys to be undertaken to verify the historical surveys and completely cover the prospective horizon for mineralisation at the Marydale Project. The IP survey will be done with higher powered and more modern instruments than the 1970’s survey with the objective of looking deeper and to provide more defined targets. In addition based on the sulphidic nature of mineralisation the Company plans to trial high powered EM techniques in parallel with the IP survey.
Figure 5: Plan showing historical drilling and geochemical anomalies over conductivity response in IP survey at the Marydale Project. The box indicates the NW Quadrant area, where Orion carried out recent drilling (Figure 1).
Option Agreement - Agama option (South Africa)
The Company has secured an exclusive option to acquire a 100% interest in Agama Exploration and Mining (PTY) Ltd who holds an effective 73.33% interest in the Prospecting Rights over the historic Prieska Copper Mine (PC) and the nearby Marydale project.
Option term expires 31 December 2016. As part of the terms of the agreement, the Company is currently undertaking a drilling and survey program across the PC and Marydale projects as part of the due diligence process.
The effective option price is ZAR85.5 million (~A$8 million) = ZAR64 million cash and ZAR21.5 million in Orion shares. Each share issued will have an attached unlisted option, exercisable at a 100% premium to the share issue price and expiring on the date which is 24 months following the date of issue of the unlisted option. The PC project has also secured ZAR30 million facility to partly fund a feasibility study.
Refer ASX Release 13 May 2016 for further information.