Southern Gold Raises $10 Million From Institutional Placement

THE BOURSE WHISPERER: Southern Gold (ASX: SAU) received binding commitments from sophisticated and institutional investors to raise $10 million.

Southern Gold said the objective of the placement of just over 71.4 million ordinary shares at 14 cents per share was to lift the company’s gold exploration effort in South Korea to higher level, including a doubling of the field teams and diamond drilling rate.

The placement resulted in AIM-listed investment specialist, Metal Tiger subscribing for a cornerstone position under a subscription agreement that provides the right for Metal Tiger to nominate one director to the company Board.

Prominent geologist, Terry Grammer has been nominated under this provision.

Also joining the Southern Gold Board, effective immediately, is economic geologist, Douglas Kirwin, who has been acting in a technical advisory capacity for Southern Gold but now steps up into a much more prominent role as non-executive director of the company.

“This is a truly transformative transaction as it injects significant project advancement funding that can immediately lift the exploration work rate across our South Korea gold holdings,” Southern Gold managing director Simon Mitchell said in the company’s announcement to the Australian Securities Exchange.

“Metal Tiger, as a new cornerstone investor, is technically sophisticated and highly selective.

“Its investment is an important vote of confidence in Southern Gold’s ability to leverage this unique position in South Korea into one of advanced discovery and value uplift.

“This is reinforced by the appointment to the Board of two industry-leading geologists, Douglas Kirwin and Terry Grammer, both with enviable discovery records, are top tier area-selection geologists and who appreciate what we are uncovering in South Korea.”





Middle Island Drilling at Sandstone to Improve Mill Recommissioning Chances

THE DRILL SERGEANT: Middle Island Resources (ASX: MDI) is set to commence a substantial multi-rig, reverse circulation (RC) drilling campaign of over 1200 metres within four kilometres of the company’s 100 per cent-owned gold processing plant at the Sandstone gold project in central Western Australia.

Middle Island said the drilling is being carried out to confirm, expand and/or test some 14 open pit gold targets in order to increase and/or upgrade existing open pit Mineral Resources.

This is expected to be finished prior to the completion of an updated pre-feasibility study (PFS) in the June quarter and revisiting a project recommissioning decision.

“Commencing 2020 with approximately $2.8 million in cash (at bank or fully underwritten) provides a rare opportunity to realise a long-held ambition to deploy significant drilling metres across a multitude of open pit gold targets (and deposits) that have remained untested or poorly tested due to prior funding constraints,” Middle Island Resources managing director Rick Yeates said in the company’s announcement to the Australian Securities Exchange.

“The planned multi-phase drilling campaign has the potential to add significant open pit Mineral Resources to the Sandstone gold project.

“With the Australian dollar gold price near record levels, any additional Mineral Resources identified during the drilling campaign should significantly enhance the outcome of the current Sandstone updated PFS, which is planned to be completed in the June quarter of 2020, prior to reviewing a recommissioning decision.”

The company completed an initial aircore drilling program, comprising 200 holes late in January, in advance of the RC drilling to determine the limits of previously defined gold anomalies and maiden palaeosurface drilling of one new target.

At this stage, the aircore drilling results are pending, but Middle Island anticipates they will be returned in sufficient time to refine planned RC drilling of the palaeo-surface gold geochemical targets.

The company explained the aircore and RC drilling programs are the first of a substantial multi-phase drilling campaign, the progressive results of which will be reported on a continuous basis.

If required, additional RC and diamond drilling programs are planned for late in the March quarter to upgrade any defined Inferred Mineral Resources to an Indicated classification, and confirm oxide bulk densities, metallurgical and geotechnical parameters, and waste rock characterisation for a planned tailings facility expansion.







Ramelius Resources Makes Move on Spectrum Metals

THE BOURSE WHISPERER: Ramelius Resources (ASX: RMS) and Spectrum Metals (ASX: SPX) have struck a Bid Implementation Agreement (BIA) that will result in Ramelius offering to acquire all of the issued and outstanding ordinary shares in Spectrum that it does not already own.

Red 5 Increases Darlot Reserve and Resource Estimates

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) updated the JORC Code 2012-compliant Ore Reserve and Mineral Resource estimates for the company’s Darlot gold mine in Western Australia.


Ramelius Resources Makes Move on Spectrum Metals

THE BOURSE WHISPERER: Ramelius Resources (ASX: RMS) and Spectrum Metals (ASX: SPX) have struck a Bid Implementation Agreement (BIA) that will result in Ramelius offering to acquire all of the issued and outstanding ordinary shares in Spectrum that it does not already own.

Spectrum Shareholders will receive one Ramelius share for every ten Spectrum shares held and cash consideration of 1.7 cents per Spectrum share held, valuing Spectrum shares at 15 cents each – a 52 per cent premium to Spectrum’s last closing price of 9.9 cents on 7 February 2020.

On Ramelius’ radar is Spectrum’s 100 per cent-owned Penny West gold project, located approximately 150 kilometres south-east of Ramelius’ Mt Magnet mining and processing operations north-east of Perth in Western Australia.

Spectrum recently announced a maiden Mineral Resource estimate for the Penny West gold project of 799,000 tonnes at 13.8 grams per tonne gold for 355,500 ounces, including 569,000 tonnes at 16.8g/t gold for 306,800 ounces at Penny North.

The two companies consider the proximity of Ramelius’ Mt Magnet processing facility to Spectrum’s Penny West gold project provides potential to realise capital cost savings and operational synergies in developing the Penny West while maintaining exposure to ongoing exploration potential.

“There is clear logic in the combination of Spectrum’s assets with Ramelius’ WA operations,” Ramelius Resources managing director Mark Zeptner said in the company’s announcement to the Australian Securities Exchange.

“After the successful acquisition of the Marda and Tampia Hill gold projects in 2019, Ramelius is focussed on building on its growth strategy to extend mine life and maximise the value of existing infrastructure in its portfolio.

“This compelling offer is the next step in that growth strategy and is expected to provide significant benefits to both Spectrum and Ramelius shareholders.”

The deal appears a good one for shareholders of Spectrum, who will not only remain exposed to all of the upside from exploration and development of Penny West but will benefit from having access to cash flow generating assets at Edna May, Mt Magnet and Vivien, while gaining exposure to the Marda and Tampia Hill projects through being a shareholder of the enlarged combined group.

“The last year has been one of exceptional growth for Spectrum which we are particularly proud of,” Spectrum Metals chairman Alex Hewlett said.

“The Penny West gold system is developing into one of significant value, I am firmly of the view that this transaction with Ramelius will unlock the full value of Penny West for the benefit of all of our shareholders.

“The combination of Penny West with the existing assets of Ramelius will build a gold business capable of delivering exceptional future returns for our shareholders.”





Red 5 Increases Darlot Reserve and Resource Estimates

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) updated the JORC Code 2012-compliant Ore Reserve and Mineral Resource estimates for the company’s Darlot gold mine in Western Australia.

Red 5 has increased the contained ounces at the Darlot mine with the updated Proven and Probable Ore Reserve for the mine now totalling 2.6 million tonnes at 3.3 grams per tonne gold for 275,000 ounces of contained gold.

This represents a 26 per cent increase in contained ounces for Darlot since 30 June 2019, net of mining depletion of 37,738 ounces to 31 December 2019.

“Darlot is an exceptional gold system and our ongoing Resource and Reserve development programs are delivering growth across multiple fronts,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“This announcement is part of a number of workstreams currently underway to progress Red 5’s Darlot Hub Mining Strategy, which is aimed at establishing a five to ten year mine life at Darlot, as a stand-alone mining operation, complementing the proposed development of King of the Hills and establishing two growth pillars of a leading mid-tier Australian gold producer.

“When Red 5 purchased the Darlot Gold Mine in 2017, the acquisition included a significant high-grade non-JORC mineral endowment that required review, confirmation and design by our Geology and Mining Engineering team before it could be included within our Resource and Reserve estimates.”

Red 5 explained that the increase in the Reserve base is due to it having completed mining studies to confirm suitable mining methods to extract gold mineralisation within the Centenary orebody along with areas that had previously been classified as sterilised and/or not economical.

“This includes areas deemed by the previous owner to have been sterilised, together with additional areas – including several oxide open pit deposits – that were modelled but never upgraded to JORC compliance,” Williams said.

“Red 5 has been working to convert these areas to Resource and Reserve status, with the work completed to date, together with extensional drilling at Lords Felsics, increasing our Reserve base by 26 per cent to 275,000 ounces and our Resource base by 16 per cent to 1.2 million ounces since the previous estimates reported as at 30 June 2019, net of the ounces produced up to 31 December 2019.”

The Ore Reserve is based on an updated Measured, Indicated and Inferred Mineral Resource for the Darlot gold mine of 10.8 million tonnes at 3.5g/t gold for 1,203,900 ounces of contained gold – representing a 16 per cent increase in contained ounces since the previous Resource estimate the company reported as at 30 June 2019 (net of mining depletion).

This Total Resource figure includes an updated underground Mineral Resource of 8.1 million tonnes at 4.3g/t gold for 1,122,000 ounces of contained gold (at a 2g/t gold cut-off grade), and a maiden open pit Mineral Resource of 2.7 million tonnes at 0.9g/t gold for 81,600 ounces of contained gold (at a 0.5g/t gold cut-off grade).

“Importantly, we also see opportunities for further growth,” Williams continued.

“We have recently increased our budget for Darlot expansion programs in FY20, committing an additional $2.3 million for Resource drilling as well as $2 million to accelerate underground mine development to access new mining areas and open up new underground exploration platforms.

“This brings our total geology budget for Darlot to $10.1 million for current financial year.

“Work programs include 12,500 metres of underground drilling and 6,000 metres of surface drilling at the Darlot mine, as well as an 11,000 metres regional drilling program, with processing studies also underway with the goal of extending our Reserve base within trucking distance of the Darlot mill.

“With the Final Feasibility Study well advanced for the establishment of a stand-alone mining and processing operation at King of the Hills, this would potentially provide Red 5 with two high-quality, long-life mining hubs in the world-class Eastern Goldfields region of Western Australia.”





Magmatic Resources Grows Lady Ilse Gold Target

THE DRILL SERGEANT: Magmatic Resources (ASX: MAG) informed of the receipt of the remaining three of four lines from a recent MIMDAS geophysical survey undertaken at the Lady Ilse prospect within the company’s 100 per cent-owned Wellington North project in New South Wales.

Magmatic Resources reported that its interpretation of the MIMDAS data indicates the Lady Ilse target has grown substantially in relation to the previous interpretation based on the first line, and remains open to the south.

“The results, in combination with the wide zone of gold and porphyry pathfinder anomalism (tellurium-bismuth-arsenic) associated with upper level pyrite-rich porphyry alteration suggest the potential for the preservation of a Cadia East-style porphyry system at Lady Ilse,” Magmatic Resources said in its ASX announcement.

Magmatic considers the Lady Ilse prospect exhibits the same characteristics as Alkane’s nearby Boda porphyry discovery at the equivalent stage of exploration.

The company believes the much wider zone of upper level pyrite-rich porphyry alteration defined at Lady Ilse represents a larger scale porphyry opportunity than Boda.





Image Resources (ASX: IMA) Explorers 2020

THE CONFERENCE CALLER: Image Resources kicked off 2019 by loading its first bulk shipment of nominally 10,000 wet metric tonnes of heavy mineral concentrate (HMC) from the company’s 100 per cent-owned Boonanarring mineral sands project, located north of Perth in Western Australia.

From there on the company barely looked back with production and sales results from Booonanarring in line with expectations and meeting its 2019 Calendar Year guidance figures, which were increased twice during the year.

“It is pleasing…preliminary results for our inaugural full year of operations meet guidance and representations to our shareholders and the market and we look forward to our second year of operations and opportunities to further grow the value of the Company,” Image Resources managing director and CEO Patrick Mutz said.

“In 2020 we will seek to build upon our operational successes by prioritising the addition of new Ore Reserves from existing and new Mineral Resources, while maintaining profitable operations and striving for continuous improvement of our safety, environmental protection and community support programs.

“We have already commenced a robust and systematic exploration program which is designed to extend the mine life at Boonanarring and we are focusing on areas within economic pumping distance of the existing Wet Concentrate Plant.

“We will also continue to assess opportunities to add further incremental value to our high-quality HMC product.”

2019 was not just about production and shipping targets and the company made great advances in exploration from drilling aimed at extending the mine-life at Boonanarring by identifying a new mineralised shoreline trend to the west of and parallel to the Boonanarring Ore Reserve area.

Based on drill sample assays and ground based magnetic survey results, it is believed this trend may potentially extend for up to 40 kilometres.

These results came in addition to an independent program of close-spaced drilling conducted across the eastern strand of the Boonanarring Ore Reserve for the purpose of reassessing the current Ore Reserve.

Further drilling aimed at extending the mine life at Boonanarring was conducted in target areas to the north, south and west of the current Boonanarring Ore Reserve.

The early results from this were positive and were what led to the identification of this new mineralized shoreline which was labelled 50mRL Strandline, as mineralised intercepts range from 48 to 55m RL.

The 50mRL Strandline was interpreted to extend up to 40km from south of the town of Gingin to north of the Boonanarring Northern Extension and includes previously identified mineralisation in the western sections of Image’s Gingin South and Gingin North projects, and was subsequently found to include the Boonanarring West mineralisation.

At the time of writing an extensive drilling program of a total 528 holes was being planned over the most promising areas identified along the 40km 50mRL Strandline.

Access for drilling was available for 40 per cent of the planned holes and the company was seeking to complete the remaining access with three landholders.

All planned drilling is within economic pumping distance of the current Boonanarring wet concentration plant and is considered high-priority.

Just before the Christmas break Image Resources updated the Ore Reserves at Boonanarring, resulting in a 24 per cent increase in the total heavy minerals (THM) ore grade and a 50 per cent increase in the in-situ zircon grade.

Ore grade increased to 8.9 per cent THM (up from 7.2% in 2017 Ore Reserve);
Zircon content increased to 27.5 per cent in the THM (up from 22.7%);
In-situ zircon grade in the ore increased to 2.4 per cent (up from 1.6%).

Higher THM ore grade and much higher in-situ zircon grades in the Ore Reserve provides for increased total HMC production for 2020, 2021 and 2022.

Total forecast production for the three calendar years ended 31 December 2022 is now estimated at 830,000 tonnes HMC compared to the 2017 Bankable Feasibility Study updated in July 2018, of 740,000 tonnes HMC over the same period.

“The increase in ore grade, and in particular the significantly higher in-situ zircon grade from the new Ore Reserve reaffirms Boonanarring as one of the highest grade, zircon-rich mineral sand projects in Australia,” Mutz said.

“While the reduction in ore tonnes is disappointing, the improved project economics due to higher overall ore grades and the elimination of marginal ore will almost certainly provide a net positive result for shareholders.

“We are also confident in our ability to add mine life through a robust and systematic exploration program which is already showing great promise on multiple fronts around Boonanarring due to the very high prospectivity of the area.”


Directors: Robert Besley, Patrick Mutz, George Sakalidis, Chong Veoy (Aaron) Soo, Peter Thomas, Chaodian Chen, Fei (Eddy) Wu, Huang Cheng Li

Breaker Resources (ASX: BRB) Explorers 2020

THE CONFERENCE CALLER: Breaker Resources kicked off a major reverse circulation (RC) and diamond drilling program last year, designed to grow the one million-ounce Bombora Resource within the company’s Lake Roe gold project, east of Kalgoorlie in Western Australia.

The Lake Roe project is located between two large gold deposits, the 3.5 million-ounce Carosue Dam mine and the 0.9 million-ounce Karonie gold deposit, located 60km north and 40km south of Lake Roe respectively.

The main focus of the drilling is intended for extensions and discovery outside the Resource envelope, both along strike and at depth.

Drilling is expected to continue throughout 2020, using at least three drill rigs.

Diamond drilling at Bombora South is looking to extend the 3.2-kilometre-long gold system to the south with the objective to discover and extend the main mineralised structures (faults) controlling the gold mineralisation observed at Bombora, prior to follow-up resource drilling.

RC and diamond drilling earmarked for Claypan will test a 2.5km by 500m gold anomaly identified by earlier aircore drilling 1.3km southeast of Bombora.

The Claypan anomaly is partially coincident with a newly identified, Bombora Sill-like quartz dolerite and has a geochemical signature comparable with that associated with the Bombora and Crescent primary discoveries.

As with Bombora South, the initial objective is discovery and to pin down the main structures controlling the mineralisation to guide further drilling.

The diamond and RC drill rigs were scheduled to drill up to Christmas and then resume early in the New Year.

Drilling undertaken earlier in the year had led to the discovery of a new steep lode with abundant coarse visible gold approximately 420m below surface in the southern part of the Bombora gold deposit.

Drill hole BBDD0086 encountered a 160m step-out hole that also hit a strong intersection of the high-grade Tura Lode, extending its known strike length to over 800m.

This result was considered important by the company, which interpreted it to further highlight the potential to increase the existing 1.1-million-ounce Resource at depth, and collectively reinforces the emerging underground mining potential at the Lake Roe project.

Breaker reported the Tura Lode intersection in hole BBDD0086 intersected 4.44m of sheared and altered lode with 2 per cent to 20 per cent sulphide, approximately 320m below surface.

“Of the ten wide-spaced, exploratory drill holes that have tested a significant thickness of the favourable quartz dolerite below the current Resource (250m below surface), four have intercepts exceeding 30 gram-metres and a further two intercepts exceed 15 gram-metres,” Breaker Resources executive chairman Tom Sanders said.

“This is an outstanding strike rate for reconnaissance-style drilling, and it says that the long-term underground mining potential is wide open.”

2020 will see a third diamond drill rig targeting the down-plunge extensions of the Tura, Daisy and Mindil lodes below the current Resource where reconnaissance drilling has previously identified high-grade gold mineralisation.

The initial hole in this area will be a deep (~1,200m) diamond drill hole at the southern end of the Bombora deposit and will be conducted as part of a Department of Mines, Industry Regulation and Safety’s Exploration Incentive Scheme (EIS) co-funded drilling program.

“The drilling campaign was designed to accelerate the unlocking of the immense exploration potential at Lake Roe,” Sanders said.

“Our team has done a great job unravelling the geology and believes there is huge scope to grow the one-million-ounce Resource based on a good understanding of the geology after 225,000 metres of drilling and detailed modelling.

“We are now applying this understanding outside the 3.2-kilometre Resource area to the rest of the 8.5 kilometre mineralisation system.

“The targets are a mix of prospects, some of which have already yielded strong reconnaissance intersections but which are poorly understood and inadequately drilled due to the early focus on Bombora (Bombora South, Bombora Deeps, Crescent).

“Other targets have compelling geochemistry with significant aircore drilling intersections that elevate the probability of fresh discovery (Claypan, Claypan North).

“I think this will translate into cost-effective extensional ounces and further discovery but it is now time to let the drill bit do the talking.

“The business case for our strategy is sound and simple.

“Our discovery cost at Bombora is approximately $18 per ounce…and the market is valuing resource ounces like ours at around $65 per ounce, rising to over $250 per ounce in many cases as projects develop.

“We believe drilling to expand the resource base is likely to add significant value and expand our development options.”


Directors: Tom Sanders, Mark Edwards, Mike Kitney, Linton Putland



Azure Minerals Hits Impressive Gold Infilling Loma Bonita

THE DRILL SERGEANT: Azure Minerals (ASX: AZS) announced first assay results from mineral resource infill and extension drilling of the Loma Bonita gold-silver deposit, located at the company’s 100 per cent-owned Alacrán project in Sonora, Mexico.

Musgrave Minerals Commences Drilling on Lake Austin

THE DRILL SERGEANT: Musgrave Minerals (ASX: MGV) reported the commencement of aircore drilling on Lake Austin within the company’s Cue gold project in the Murchison district of Western Australia.

Magnetic Resources Hits High-Grade Gold Adjacent to Hawks Nest Feeder Zone

THE DRILL SERGEANT: Magnetic Resources (ASX: MAU) reported further results from a comprehensive 465 RC-hole program completed at the company’s Hawks Nest prospect, located near Laverton in Western Australia.

Lithium Australia Now 90% Owner of Battery Recycler Envirostream

THE BOURSE WHISPERER: Lithium Australia (ASX: LIT) announced that it has taken its stake in Envirostream to a 90 per cent ownership interest.


Azure Minerals Hits Impressive Gold Infilling Loma Bonita

THE DRILL SERGEANT: Azure Minerals (ASX: AZS) announced first assay results from mineral resource infill and extension drilling of the Loma Bonita gold-silver deposit, located at the company’s 100 per cent-owned Alacrán project in Sonora, Mexico.

Azure Minerals encountered some hefty intersections of gold mineralisation over substantial widths commencing close to surface with highlights including:

Mineral Resource infill drilling:

126 metres at 2 grams per tonne gold from 1.5m, including 64.5m at 2.8g/t gold, including 34.5m at 3.9g/t gold.

Mineral Resource expansion drilling:

36m at 1g/t gold from 12m.

To date the company has completed 10 Reverse Circulation (RC) holes, from which it has received gold, silver and base metal assays for the first six holes.

Azure’s previous exploration on Alacrán discovered the Mesa de Plata silver deposit and the adjacent Loma Bonita gold-silver deposit.

These two deposits contain total resources of:

Mesa de Plata:

10.5 million tonnes at 82g/t silver for 27.4 million ounces silver

This includes an at-surface high-grade resource of:

1.8 million tonnes at 275g/t silver for 15.5 million ounces silver

Loma Bonita:

5.4 million tonnes at 0.9g/t gold and 28g/t silver for 150,000 ounces gold and 4.8 million ounces silver.

“The Loma Bonita deposit, as defined by the current Mineral Resource, extends over 600 metres north-south, up to 200 metres east-west, and remains open to the north, east and south,” Azure Minerals said in its ASX announcement.

“Mineralisation starts at surface and in places the true width/thickness of the mineralised zone exceeds 100 metres.

“Resource infill drilling is being undertaken to improve definition of internal high-grade zones and obtain samples for additional metallurgical testwork, while resource expansion drilling is stepping out from the eastern resource boundary to increase the resource size.”