Legacy Minerals: Diamond Drilling Delivers Exceptional Gold Results at Drake Project
Legacy Minerals (ASX: LGM) has reported outstanding results from diamond drilling at its Drake Project in New South Wales, confirming significant gold mineralisation that builds upon the recently delivered Mineral Resource Estimate and Scoping Study.
High-Grade Gold Intercepts Demonstrate Untapped Resource Potential
The latest Legacy Minerals gold drilling results have confirmed substantial gold mineralisation across multiple zones, highlighted by:
- 95m at 0.9g/t Au and 0.35% Zn from 2m in drill hole GT005, including a high-grade zone of 10m at 6.0g/t Au from 69m
- 18m at 1.4g/t Au, 10g/t Ag and 3.8% Pb+Zn from surface in drill hole GT001
- 52m at 0.7g/t Au and 0.9% Pb+Zn from 3m in drill hole GT004, including 9m at 3.0g/t Au and 1.1% Pb+Zn from 35m
- 17m at 0.5g/t Au and 0.7% Pb+Zn from surface in drill hole GT002
These results are particularly significant as they come from previously unassayed diamond drill holes that were originally completed by a previous explorer for a planned Definitive Feasibility Study. Legacy Minerals' technical team identified these cores as worthy of analysis, demonstrating the company's ability to extract additional value from existing assets.
Building on an Already Impressive Resource Base
The latest Legacy Minerals gold drilling results build upon Legacy's recently updated Mineral Resource Estimate (MRE) at Drake, which contains a substantial:
- 0.65Moz Au, 24.3Moz Ag, 147kt Zn, 33kt Pb, and 20kt Cu
- Equivalent to 0.8Moz AuEq (from gold-rich deposits) plus 35Moz AgEq (from silver-rich deposits)
The results demonstrate resource continuity at the Strauss deposit and delivered extensions to known gold mineralisation at Kylo, with both deposits remaining open in all directions, pointing to significant expansion potential. Furthermore, understanding the geology of ore deposits is crucial for evaluating the full potential of such resource bases.
Robust Economics Demonstrated in Scoping Study
These encouraging drilling results enhance the recently completed Stage 1 Scoping Study, which already demonstrated compelling economics:
| Economic Metric | Base Case ($4,250/oz Gold) |
|---|---|
| NPV (8%) | A$290.4 million |
| IRR | 112% |
| Free Cash Flow | A$314.1 million |
| Total Gold Production | 172,600oz Au |
| Mine Life | 5.5 Years |
| All-in-sustaining cost | A$1,726/oz |
Importantly, the Scoping Study only evaluated 209.5koz of the total 650koz Au and 24.3Moz Ag defined in the updated MRE, suggesting substantial upside in a potential Stage 2 study. Additionally, many mining giants tackle emissions with innovative strategies that could further enhance the project economics.
Understanding Epithermal Gold Systems
Epithermal gold deposits like those at Drake are formed relatively near the Earth's surface (within 1-2km) and are commonly associated with volcanic activity. These systems typically feature:
- Gold mineralisation occurring in veins, breccias, and disseminated zones
- Association with volcanic activity and hydrothermal fluids
- Variable gold grades ranging from low (0.5-1 g/t) to exceptionally high (>10 g/t)
- Common association with silver and base metals (copper, lead, zinc)
The Drake Project's characteristics are similar to other major porphyry and epithermal deposits worldwide, including the Porgera deposit and Kainantu deposit (18Moz AuEq) in Papua New Guinea, suggesting world-class potential.
Future Plans and Exploration Strategy
Legacy Minerals has completed an airborne mobile-magnetotelluric (MT) geophysical survey at Drake, providing the first systematic look at the broader region in 30 years. This approach has been successfully used by companies like K92 Mining, which grew their Kainantu resource from 0.88Moz AuEq in 2015 to an impressive 18Moz AuEq in 2024.
The company's exploration strategy focuses on three clear goals:
- Resource extension assessment targeting brownfield areas
- Discovery drilling for new greenfield epithermal-porphyry discoveries
- Increasing resource confidence by confirming historical drill results
Investment Thesis: Why Legacy Minerals Warrants Attention
Legacy Minerals presents a compelling investment case based on:
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Established Resource with Growth Potential: The current resource of 0.8Moz AuEq and 35Moz AgEq provides a solid foundation, with new Legacy Minerals gold drilling results confirming expansion potential in all directions.
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Robust Economics: The Scoping Study demonstrates attractive returns with an IRR of 112% and NPV of A$290.4 million using a A$4,250/oz gold price. At A$5,000/oz gold, the economics improve substantially to a pre-tax NPV of A$404 million and IRR of 151%.
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Significant Upside: The Stage 1 Scoping Study only evaluated about one-third of the defined gold resource, suggesting substantial additional value in future studies.
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Favourable Location and Infrastructure: The Drake Project benefits from existing infrastructure including a tailings dam, water source, site office, and processing facilities, reducing potential development costs. In addition, proximity to top copper mines in the region creates potential synergies for future development.
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Geological Setting with World-Class Potential: The similarities to major deposits like Kainantu (18Moz AuEq) in Papua New Guinea suggest the potential for significant additional discoveries.
The latest Legacy Minerals gold drilling results represent an opportunity to invest in a gold project with proven economics and substantial resource expansion potential. With continued exploration success and development progress, the company appears well-positioned to deliver significant shareholder value. However, as with all junior mining investments, investors should carefully consider both the risks and rewards.
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