Medallion Metals Strikes Gold with Significant Extensions at Gem Deposit
Medallion Metals (ASX:MM8) has reported promising drill results that significantly extend high-grade lodes at its Gem deposit, part of the flagship Ravensthorpe Gold Project in Western Australia. The new intercepts push mineralisation up to 80 metres beyond current resource boundaries, potentially adding substantial value to the project.
High-Grade Intercepts Extend Resource Potential
The company's recent reverse circulation (RC) drilling has yielded impressive results from two extensional holes at the Gem deposit, with standout intercepts including:
- 6m @ 4.6g/t Au, 1.0% Cu, 9.1g/t Ag (6.3g/t gold equivalent) from 343m, including
- 2m @ 11.2g/t Au, 2.4% Cu, 19.5g/t Ag (15.3g/t gold equivalent) from 345m
- 3m @ 6.8g/t Au, 0.6% Cu, 5.5g/t Ag (7.8g/t gold equivalent) from 346m
- 2m @ 3.9g/t Au, 0.6% Cu, 2.9g/t Ag (4.9g/t gold equivalent) from 355m
These results are particularly significant as they extend mineralisation 60 metres below the current mine plan limits and 40-80 metres beyond the current Inferred resource boundary. The findings demonstrate that above cut-off grade mineralisation at mineable widths continues well beyond the previously modelled resource.
"These results are extremely positive and have important implications for the project as the business looks toward near-term development. Project economics are significantly levered to mine life extensions and these results demonstrate that above cut-off grade mineralisation at mineable widths extends up to 60 metres down plunge from the current limits of the mine plan," said Managing Director Paul Bennett.
Strategic Implications for Project Development
The Medallion Metals Gem deposit extension holds substantial significance for Medallion's current sulphide Mineral Resource Estimate at the Kundip Mining Centre, which stands at 5.6Mt @ 4.3g/t Au & 0.6% Cu for 770koz Au and 36kt Cu. Any expansion of this resource base could potentially enhance the economics outlined in the company's December 2024 Scoping Study.
These findings align with the technical team's assessment that there remains considerable untapped potential within this mineralised system. The recent drilling results suggest that rather than approaching the limits of the deposit, Medallion may have only begun to uncover the full extent of the resource. Furthermore, thorough mining feasibility studies will be crucial to determine how these extensions impact the overall project economics.
Understanding Gold Equivalent Calculations
Gold equivalent (AuEq) values represent the combined value of multiple metals expressed as a gold grade. For Medallion's calculations, they use the formula:
AuEq g/t = Au g/t + (Cu % × 1.61) + (Ag g/t × 0.01)
This calculation factors in metal prices (Au = A$2,946/oz, Cu = A$16,768/t, Ag = A$42/oz) and metallurgical recoveries (Au = 94.6%, Cu = 86.1%, Ag = 73.3%) to present a single value that represents the economic potential of multi-element mineralisation.
The gold equivalent calculation allows investors to understand the combined value of all metals present in the ore, expressed as a single gold grade. This is particularly important for deposits like the Gem, where copper and silver contribute meaningful additional value beyond the gold content alone. Many investors use systematic investing approaches to evaluate such multi-metal opportunities.
The Medallion Metals Gem Deposit Extension in Context
The Gem deposit is part of Medallion's Kundip Mining Centre within the Ravensthorpe Gold Project located 550km south-east of Perth in Western Australia. The Gem deposit has historical significance, with previous mining having extracted approximately 82,557 tonnes at 19.0g/t Au for 50,269 ounces of gold up to 1991.
The recent drilling results reported are from two Reverse Circulation (RC) extensional holes specifically targeting down-plunge extensions of the Gem lode. These holes were part of a broader 17,000-metre drilling programme at the Kundip Mining Centre, of which approximately 15,000 metres had been completed at the time of the announcement.
What makes the Medallion Metals Gem deposit extension particularly noteworthy is that these holes were specifically designed to test the deposit's limits. Unlike the majority of the current drilling programme, which focuses on infill drilling to increase resource confidence, these extensional holes explicitly aimed to determine how far the mineralisation extends beyond the current resource model.
Advancing the Forrestania Acquisition and Development Strategy
In parallel with these drilling results, Medallion continues to advance negotiations with IGO Ltd regarding the acquisition of the Forrestania Nickel Operation and Cosmic Boy Process Plant. The exclusivity period for these negotiations has been extended to August 2025.
The company is pursuing a multi-faceted approach to reach a Final Investment Decision, including:
- Converting Inferred resources to Indicated category to maximise potential ore reserves
- Conducting metallurgical, geotechnical, and hydrogeological testwork
- Progressing environmental permitting at state and federal levels
- Finalising the Forrestania transaction
An updated Mineral Resource Estimate for Gem is expected in June 2025, followed by an update for the Harbour View deposit in July. These will form the foundation of a Feasibility Study assessing the technical and commercial merits of the company's Sulphide Development Strategy. This approach mirrors Rio Tinto's strategy of investing in copper and other clean energy metals.
Geological Understanding of the Gem Deposit
The Gem deposit mineralisation is hosted within several historical systems (Kaolin, Two Boys, Beryl, Western Gem and Hillsborough) that follow east-northeast striking, shallowly to moderately south dipping, sub-parallel, quartz-sulphide lodes.
The mineralisation is characterised by sulphide-quartz veins with chlorite alteration haloes. In the recent drilling, high-grade sections showed quartz veining with 10-30% chalcopyrite (a copper-iron sulphide mineral) and 5-10% pyrite (iron sulphide).
The Medallion Metals Gem deposit extension confirms that the high-grade mineralisation previously identified continues beyond the current resource model. This suggests that the geological structures hosting the gold-copper mineralisation are more extensive than previously understood, opening up potential for further resource growth with additional drilling. A proper geology of ore deposits understanding is critical for evaluating the full potential of such discoveries.
Why Investors Should Follow Medallion Metals
Medallion Metals presents a compelling investment case with several key factors worth monitoring:
- Resource Growth Potential: The latest drilling results confirm significant upside in resource expansion, with mineralisation remaining open at depth
- Near-Term Development Path: With feasibility studies underway and a clear pathway toward production decisions
- Strategic Infrastructure Access: The potential acquisition of the Forrestania operation provides a ready-made processing solution
- Multi-Metal Exposure: The project offers exposure to gold, copper, and silver, providing natural diversification
- Experienced Management: The technical team continues to demonstrate exploration success and strategic vision
For investors seeking exposure to advanced gold-copper projects in tier-one jurisdictions, Medallion Metals offers an increasingly attractive proposition as it advances toward development decisions in late 2025. Moreover, the company's focus on ESG considerations positions it well in the modern mining landscape.
The significance of the Medallion Metals Gem deposit extension should not be underestimated. The results reported from just two extensional drill holes demonstrate that high-grade mineralisation continues well beyond the current resource model, potentially adding considerable value to the project as it moves toward development.
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