(Alliance News) - Empire Metals Ltd on Wednesday said its Eclipse gold project in Western Australia will require further drilling after test results showed that gold mineralisation occurred at greater depths, scuppering plans for an open-pit mine.
Empire shares sunk 20% to 1.61 pence each in London on Wednesday morning.
"The results from the company's drilling campaign has provided confidence in the potential of the Eclipse gold project whilst continuing to add to our understanding of the nature of the mineralised lodes," Managing Director Shaun Bunn said.
The resource exploration and development firm, which has assets in Australia and Austria, said drilling has delivered "encouraging" results that confirm the existence of a number of parallel veins in addition to the main Eclipse vein.
The Eclipse gold project is located 55 kilometres north-east of Kalgoorlie in Western Australia and comprises of a single mining lease covering 305.6 hectares.
"Equipped with these results, we believe that the main gold mineralisation at Eclipse is more prevalent at depth, and is perhaps orders of magnitude larger than originally anticipated," Bunn said.
Consequently, the company believes that the development of a small-scale open pit operation is not the best path for "unlocking the value of Eclipse", and may ultimately lead to the sterilisation of the higher value gold mineralisation within the high-grade primary lodes and supergene enrichment near the base of weathering.
"We will continue to build a resource base around the existing high grade targets, both at depth and along strike, and focus on the wider potential that is offered by combinations of the Eclipse lode with the Jack's Dream extension and the Twin Shaft lode," Bunn said.
Empire will now expand its exploration efforts and focus on the wider potential of the combination of the Eclipse lode with other's, like the Twin Shaft lode, with the objective of delivering a larger mineralised inventory to advance towards feasibility stage.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Empire Metals (EEE)