Alice Queen uncovers new high-grade zones at Horn Island

Horn Island drilling delivers high-grade intersections

Alice Queen Limited (ASX:AQX) has found some of its strongest gold intersections at Horn Island just as the Queensland project moves from study work into a more consequential drilling phase. The first 11 assays from a 20-hole, 4,157-metre Stage 1 reverse-circulation program included 15 metres at 10.3g/t gold from 30 metres, including a one-metre interval at 68.0g/t, within the existing Mineral Resource.

Other results inside the resource included 83 metres at 1.2g/t gold in hole 26NGRC001, 14 metres at 5.9g/t in 26NGRC004 and 13 metres at 3.5g/t in 26NGRC006. The company says the results provide further evidence of localised continuity and higher-grade zones, but also says additional drilling and geological modelling will be needed before their significance to a future resource estimate can be assessed.

The result builds on the 68g/t Horn Island intercept reported earlier in October, when nine assays were still outstanding. That uncertainty remains: the final nine holes are expected in the fourth quarter, subject to quality-control procedures.

Step-out holes extend the mineralised corridor

The more important question for Horn Island is not simply whether high grades exist, but how far the mineralised system extends beyond the current resource. Alice Queen says step-out drilling identified gold mineralisation over an approximate 50-metre to 550-metre strike extent outside the resource boundary, with the northwest extension still open.

Initial assays from the Exploration Target included three metres at 2.7g/t gold from 48 metres in 26NGRC011 and four metres at 1.4g/t from 54 metres in 26NGRC010. Fourteen holes totalling 3,385 metres tested ground south and northwest of the resource, including areas up to about 600 metres from its boundary. The company’s preliminary interpretation is that several zones have shallow-plunging geometries and geological similarities to mineralised trends within the existing resource.

Those observations are encouraging but remain exploratory rather than resource growth. Portable XRF readings, visible gold in a pan-concentrate sample and geological similarities cannot establish representative grades, widths or continuity. Laboratory assays, validation and modelling will determine whether the apparent extensions translate into a material resource update.

Yarindury sale sharpens focus but cash remains finite

Alice Queen has also completed the sale of its non-core Yarindury exploration licence in New South Wales to Alkane Resources (ASX:ALK) for $900,000 in cash. The transaction was completed after quarter end, so its proceeds were not part of the $2.454 million cash balance reported at 30 September. The divestment follows the $900,000 Yarindury sale, which was previously announced as a way to redirect capital towards Horn Island, new project generation and working capital.

The Appendix 5B recorded $1.076 million of net operating cash outflow for the quarter, including $558,000 in exploration and evaluation expenditure. On that reported spending rate, Alice Queen calculated 2.28 quarters of available funding, with no financing facilities disclosed. That leaves the company with a stronger cash position after the asset sale, but also a clear need to balance further drilling and development work against its remaining funding runway.

Resource update now depends on assays and modelling

Horn Island currently hosts a JORC 2012 Mineral Resource of 21.1 million tonnes at 0.84g/t gold for 569,000 ounces, including 404,000 ounces classified as indicated and 165,000 ounces inferred. The drilling was designed to expand that inventory, improve grade confidence and test satellite targets including Southern Silicified Ridge and Cable Bay, while feeding into ongoing feasibility study work.

There is also a management transition underway. Founder and managing director Andrew Buxton is stepping down as managing director and a director in October, with an executive search to begin and chief financial officer Leonard Math taking a greater interim role in day-to-day activities. The next technical milestone is more immediate: the remaining assays and the geological model will decide whether the promising step-outs amount to a meaningful change in Horn Island’s development proposition.