The Two Mile Hill gold deposit in Western Australia is a significant resource despite it being low grade, operator Troy Resources said in its latest resource estimate.

The mine, located in the Sandstone Mine area of Western Australia, has an inferred mineral resource estimated at 10.5 million tonnes grading 1.3g t/y for 452,000oz of gold.

The new estimate is based on two reverse circulation/diamond core drilling programmes, which significantly changed the scale and geological interpretation of the deposit, Troy said.

Troy previously reported an indicated resource of 487,000t grading 1.64g/t for 25,700oz and an inferred resource of 102,000t at 2.63g/t for 8,600oz.

Diamond drilling also has intersected high grade mineralisation in an adjacent Banded Iron Formation, which will be the focus of future exploratory drilling, Troy said.

Troy CEO Paul Benson said the geometry of the intrusive allows it to be amenable to low-cost high-tonnage mining methods.

“We are currently planning a Phase 3 exploration programme to test the extent of the high-grade BIF mineralisation. If we can prove up sufficient high-grade it’s easy to see a concept where a decline is mined through the tonalite to access the BIF horizon,” Benson said.