K92 Mining (KNT.V) is currently completing a 2,400 meter drill program to drill-test a previously discovered mineralized system in an attempt to figure out if the copper-gold mineralization could be viable. KNT plans to drill 6 holes that reach a depth of 400 meters, and the assay results of the very first hole have now been released.
After intersecting a narrow gold-dominant zone at just 5 meters down hole, the first hole intersected almost 175 meters containing 0.28 g/t gold and 0.22% copper, as well as 2 g/t silver. The thick interval and type of mineralization indeed shows all characteristics of a copper-gold porphyry system, but the grade is just a bit too low to be amenable for underground cave mining methods (a good example would be Newcrest’s (ASX:NCM) Cadia East underground project, which has an average grade of 0.36 g/t gold and 0.26% copper and is profitable at the current metal prices. An open pit mine doesn’t look very likely at this point, as the mineralization starts approximately 260 meters down-hole, and roughly 200 meters vertically from surface.
K92 Mining definitely seems to be onto something and discovering a thick layer of almost-economic copper-gold mineralization in the very first hole into a prospect is a clear win. The assay results of the next five holes will be interesting as well, and although we wouldn’t want to read too much into the first six holes of the program, it would be excellent if most of those holes would confirm the existence of a thick layer of copper-gold mineralization, and the data gathered from this drill program will help the K92 geologists to further update the geological interpretation of the system and design a follow-up drill program.