Inventory Expanded Despite Fund Raising Restrictions

THE CONFERENCE CALLER: Being the recent target of three formal takeover attempts has not stopped Alto Metals (ASX: AME) from adding gold ounces to its Lord Nelson deposit in Western Australia’s East Murchison. By Mark Fraser

Despite restricted access to regular fund-raising mechanisms during these corporate shenanigans, the WA-based junior has still managed to increase Lord Nelson’s inventory by 60 per cent (or 41,000 gold oz) since the start of last year.

As a result, the company has now established an inferred mineral resource for the deposit of 1.8 million tonnes grading 1.9 grams per tonne gold for 109,000 ounces.

Lord Nelson is just one of a number of targets which makes up the company’s wholly-owned – and obviously sought after – Sandstone gold project.

The others are Lord Henry, the Indomitable and Vanguard camps as well as Havilah and Ladybird.

Covering around 800 square kilometres of prospective greenstone belt, the Sandstone project sits some 600km north of the WA capital of Perth and currently boasts a resource of 6.2 million tonnes at 1.7g/t for 331,000 ounces of yellow metal.

During its previous life Lord Nelson – which was discovered by former owner Troy Resources (ASX: TRY) – yielded around 200,000 gold ounces at 4.6g/t from an open pit that was only dug down to 90m depth.

The mining house, however, lost interest in the deposit after it hit transitional fresh rock – mainly because it was looking for oxide material to feed its processing mill, which is now owned by former Alto suitor and current neighbour Middle Island Resources (ADX: MDI).

During his appearance at the recent RIU Resurgence Conference, Alto Metals managing director Matthew Bowles said the company’s immediate exploration focus was on the extensions of known mineralisation at both Lord Nelson and Lord Henry (located 3km to the south) and the corridor (a granodiorite intrusion) in between.

So far, drilling down to 200m depth at the former has revealed an “underground grade” of 16m at 5.5g/t.

Furthermore, Alto has discovered a new lode – Orion – along the Lord’s corridor just to Lord Nelson’s south.

Here, the drill rig has returned a number of promising gold intercepts, including: 10m at 4.1g/t (from 34m depth), 12m at 3.4g/t (66m) and 23m at 3.8g/t (106m).

Bowles said Alto was now confident it was on the verge of finding a “much bigger system” at Lord’s, which boasts historical production of 250,000 ounces from material mined at just 50-80m depth.

This includes 48,000 ounces at Lord Henry, where the current inferred mineral resource sits at 1.82 million tonnes at 1.9g/t gold for 109,000 contained ounces, while drilling has yielded substantial yellow metal intercepts like 2m at 51.3g/t from 70m, 6m at 10.2g/t (50m) and 2m at 20.3g/t (64m).

“What we’ve done is taken a lot of the fantastic work that Troy’s exploration geologists did, we’ve analysed that (and) we’ve overlaid it with a lot of the geology, a lot of the interp(retation) that we’ve had,” Bowles explained.

“We’ve identified a number of cross cutting structures, and coinciding with those cross cutting structures is … a lot of the original shallow drilling that Troy did when they were going up that corridor.

“And bear in mind they were looking for oxide ounces at surface. So there were a lot of those things that weren’t drilled very deeply.

“So we’re going back in – we are not restricted by the mill, and we are looking at finding a big discovery.”

 

Web: www.altometals.com.au

 

Not Quite a Geological Comparison, But Point Made

THE CONFERENCE CALLER: Although it was only the briefest of references in passing, Stavely Minerals’ (ASX: SVY) boss Chris Cairns made an interesting observation when – at the recent RIU Resurgence Conference in Western Australia – he suggested the mineralisation of his company’s namesake Victorian exploration project may be similar to that of one of Australia’s great historic copper operations. By Mark Fraser

No doubt investors who attended the event, which was held in the explorer’s home town of Perth in WA, took note when Cairns hinted the polymetallic Stavely play in west Victoria might resemble Mt Lyell in Tasmania.

Located 175 kilometres north west of Hobart in the prospective Mt Read volcanics, the Mt Lyell camp has hosted – at least in the words of some information provided by the Tasmanian geological survey – “some of the oldest significant mines in Australia”.

Discovered in 1883, the project area had, by 1999, been responsible for a large portion of Tasmania’s gold production as well as most of its copper – yielding 1.4 million tonnes of copper, 43 tonnes of gold and 733 tonnes of silver from 119 million tonnes of ore.

According to some news sources, when Mt Lyell was put on care and maintenance during 2014 by the publicly-listed Vedanta Resources (LSE: VED), its historic output of red metal had risen to 1.8 million tonnes.

Cairns told RIU delegates that, just after listing on the ASX via a $6 million initial public offering during 2014, Stavely raised a few eyebrows when it decided to concentrate its field efforts in western Victoria.

“At the time people said you need your head read if you go into Victoria – it’s very low in the Fraser Institute’s rankings of exploration destinations,” he noted.

“(And) it’s funny how, six years later, it is one of the hottest destinations in the world for exploration, with Fosterville and Kirkland Lake (ASX: KLA) having so much success there.

“And we’ve made a discovery in a completely different terrain. When we moved in there, there was no mining history whatsoever in western Victoria – certainly not for porphyries or copper.

“But we persisted for a number of years seeking a porphyry target and eventually discovered a magma Arizona-style of deposit, and hopefully the porphyry is sitting underneath.

“It’s almost unique in Australia in terms of the style of mineralisation – I don’t know of any other deposit (like it … but it’s been suggested that) maybe Mt Lyell may have some attributes of this style of mineralisation.”

Since then Stavely – with its 1461 square kilometres ground position – has established itself as a first mover within Victoria’s Stavely Arc, where the company is developing its wholly-owned Stavely and Ararat projects.

The majority of the junior’s exploration has focused on Thursday’s Gossan, where the initial target was a Tier-1, Cadia-style copper-gold porphyry system that included an extensive chalcocite-enriched blanket occurring 30-80m below surface.

When this was starting to resemble something of a “rabbit hole”, however, the junior began looking for lode-style mineralisation closer to surface – a move which led to the discovery of the shallow (0-200m), high grade copper-gold-silver Cayley Lode. So far Stavely has established an inferred mineral resource of 28 million tonnes at 0.4 per cent copper for 110,000 tonnes of contained red metal at Thursday’s Gossan.

Describing the Cayley Lode as a game changer, Cairns indicated it could well be the tip of a new copper province iceberg.

As it stands Stavely is now planning to complete a mineral resource drill-out of the shallow (0-200m) Cayley open pit mineralisation.

And, aside from also starting a scoping study on the first phase of the proposed above ground development, the company is also looking to re-deploy drill rigs to define the Cayley Lode at depth in order to lay the foundation for a phase two underground operation.

In addition, drill testing of further porphyry and regional targets is scheduled.

“We’ve defined it down to a kilometre and, if it’s continuous, we’re thinking about a two decade mine life at the phase two underground after the open pit,” Cairns added.

Stavely is now well positioned to complete this early due diligence, having a healthy $32 million cash in the bank.

 

Web: www.stavely.com.au

 

 

Climate Risks Coming Under Closer Financial Scrutiny

THE CONFERENCE CALLER: Australia’s next generation of gold producers may face being snubbed by investors if they do not adequately plan to mitigate the intensity of their expected greenhouse gas emissions. By Mark Fraser

Moreover, mining houses chasing lower grade deposits are likely to come under closer scrutiny given the higher amount of energy required to process increased ore tonnages.

According to CSA Global (part of the ERM Group) Mining Industry Consultants principal geologist Sam Ulrich, industry financiers were now looking to fund resource projects with lower carbon footprints.

This not only included banks, institutional investors and individual shareholders, but also superannuation fund managers and metal end users.

Speaking after his appearance at the recent RIU Resurgence Conference in Western Australia, Ulrich told Resources Roadhouse that mineral proponents now faced a number of choices when it came to managing their emissions intensity.

Current miners connected to coal-fire power infrastructure, he suggested, could look at measures like maintaining grade via the fast-tracking of underground operations or infusing available renewable technologies (like solar and wind) into their energy mix.

Also, as many mines have worked on a 3-4 year annually incrementing life-of-mine (LOM) plan, owners may want to consider extending the LOM plan in order to take financial advantage of technological developments in the power market.

Meanwhile, newer producers with an initial longer LOM plan have an advantage in this area – they have more electricity-generating options at their disposal.

At the moment, Ulrich said, Australia’s gold sector was 26th out of 35 based on greenhouse house gas emissions intensity by gold ounces produced.

The lowest was Finland, followed by Bulgaria, Canada, Armenia and Argentina. South Africa came in last at 35th.

“On the one hand you could say Australia’s got to lift its game, but the other problem is that a lot of the country’s gold mines – maybe half – are still connected to the grid, and grid electricity in Australia is still obviously dominated by coal,” he explained.

“So, there’s that issue, whereas if you take somewhere like Canada or Finland, it’s mostly hydro, so they’ve got a competitive advantage from the start.

“And this is not related just to gold – it covers all commodities.

“So when some politicians say we should be using more coal, it doesn’t actually help the competitiveness of our industries.”

While the new emerging generation of investors, such as Gen Z and Millennials, who were keen to see their retirement nest eggs beefed up by low carbon emitting enterprises, end users – like car manufacturers – also wanted to be associated with suppliers who had successfully mitigated their air pollution.

“Being able to say, like the nickel, cobalt and lithium miners, that you are producing metals which enable a low emissions future may be great, but if you are a car maker, or other end user, might you want to be able to say that you got your materials from the cleanest source possible?” Ulrich asked.

“Do you want to say you sourced your product from a high emissions intensity mine or a low intensity one?

“This too is also going to be a consideration as the industry moves towards its emissions reduction goals.”

During his RIU presentation, Ulrich said recent studies had predicted the average grade for Australian gold mines would drop by just over a gram per tonne by 2029 which meant, depending on the type of mine, a possible increase in emissions intensity of up to 50 per cent.

Mitigating these kinds of carbon risks, though, would give companies access to lower cost equity and debt capital.

“Climate risks are financial risks and it is never too early to start addressing them,” Ulrich said.

“There are financial benefits for good disclosure, being carbon aware or having a climate change plan.

“And these benefits are not only for large companies, but also for junior ones.

“Being able to demonstrate a lower carbon risk should lead to a higher firm value, and easier access to investment funding.”

 

Web: www.csaglobal.com

Eagle Mountain Mining seeks geological wisdom for Oracle Ridge

THE CONFERENCE CALLER: ASX-listed Western Australian junior Eagle Mountain Mining (ASX: EM2) could well be on the way to making its mark on the American copper sector. By Mark Fraser

The Perth-based company has just started a 2,000 metres diamond drilling program at its 80 per cent-owned Oracle Ridge project just north of Tucson in the US state of Arizona, where it is initially looking to substantially grow an historic close-to-surface underground skarn-hosted polymetallic deposit which hasn’t received much attention since mining of the ore body ceased during the 1990s.

This field program has been funded via a $3 million capital raising conducted on the ASX earlier this year.

As it stands Oracle Ridge has an NI43-101-compliant measured, indicated and inferred resource estimate of 11.76 million tonnes of ore grading 1.57 per cent copper, 17.47 grams per tonne silver and 0.18g/t gold for a contained 409 million pounds of copper, 6.8 million pounds of silver and 68,000 gold ounces.

While one of the key aims of the current field program is to boost this resource two-to-three fold, past drilling in the area has also indicated there is further mineralisation outside of the resource’s footprint – with results like:

7.7 metres at 5.11 per cent copper, 0.72g/t gold and 55.8g/t silver, and
7.6m at 4.63 per cent copper, 0.74 per cent gold and 43.06g/t silver, catching the company’s eye.

In addition, the exploration house is trying to determine if there is a copper porphyry located beneath Oracle Ridge – a proposition not out of the question given the geological profile of the other major copper deposits found along the Arizonan section of the Laramide Arc.

Speaking before his presentation at the RIU Resurgence Conference, Eagle Mountain chief executive Tim Mason told Resources Roadhouse that many of the high-grade skarn-based mines found around Oracle Ridge had porphyries sitting beneath them.

“In our case the porphyry has never been found – and the reason for this is there is an intrusion just below the deposit, which would effectively have masked any geophysics conducted in the area,” Mason noted.

“This alone presents us with some really big exploration potential.”

Also working in Oracle Ridge’s favour is the fact the project already has underground mining infrastructure in place, it is located in an established and vibrant mining jurisdiction and its current ore reserve is actually close-to-surface, being located near the side of a hill.

“Because it is a stacked zone, it lends itself to being opened up to multiple production fronts … (which means) we can achieve higher production rates,” Mason later said during his RIU Resurgence Conference presentation.

“It is amenable to a lower cost mining operation compared to, say, a deeper ore body when you have to get the ore up from depth.

“So higher production rates and lower costs certainly bode well for our mining studies going forward.”

Eagle Mountain’s second Arizona project is the greenfields Silver Mountain, which sits north west of Phoenix and where previous drilling has identified highly anomalous assay values as well as the presence of porphyry indicator minerals – including molybdenum and bismuth.

Mason said while the company was focused on advancing Oracle Ridge over the next 12 months, it would not lose sight of Silver Mountain as this project obviously had plenty of potential.

“We’ve just finished off a geophysics program there,” he added.

“Eagle Mountain has also been doing a raft of mapping, it’s been following up on old targets and we’ve had crews out there in the last few weeks. But we have yet to start drilling it.”

 

 

Image Resources has Growth Options in Place

THE CONFERENCE CALLER: Having quickly established itself as Australia’s premier mid-tier heavy minerals (HM) producer, Image Resources (ASX: IMA) is now facing another major challenge – to find further feed for its hungry processing plant. By Mark Fraser

Although the company’s high-grade flagship operation Boonanarring – located just 80 kilometres north of Perth in its home state of Western Australia – has only another two-to-three years’ mine life left in it, Image has enough expansion options up its sleeve to make sure the project remains an ongoing concern.

First cab off the rank is Atlas some 70km to the north, where an already-established resource of 18 million tonnes of ore grading 6 per cent heavy minerals (HM), including a combined 15.8 per cent zircon plus rutile (Z+R), looks set to add another three years of dry mining production.

Following this are the North Perth Basin dry deposits of Red Gully (6Mt at 7.7% HM; 15.5% Z+R), Regans Ford (9.9Mt at 9.6% HM; 14.3% Z+R), Helene/Hyperion (18.2Mt at 4.8% HM; 14% Z+R), Gingin South (8.1Mt at 6.1% HM; 13.5% Z+R) and Gingin North (2.4Mt at 5.5% HM; 9.1% Z+R).

All up this equates to an extra 93 million tonnes at 6.3 per cent HM; 17 per cent Z+R on top of Boonanarring’s current inventory of 30.3Mt at 6 per cent HM; 23.1 per cent Z+R.

Further exploration is expected to boost these figures.

In addition, Image has a number of dredge mining options – including Bidaminna (where the current resource sits at 45Mt at 3% HM and combined 6.5% Z+R), Titan-Telesto (140Mt at 1.9% HM; 12.8% Z+R) and Calypso (51Mt at 1.7% HM; 15.9% Z+R). Together, these add an additional 236Mt at 2.1 per cent HM and 11.5 per cent Z+R to the mining house’s inventory.

During the RIU Resurgence Conference, Image Resources chief financial officer John McEvoy indicated the company was initially looking to move its 3.7 million tonnes per annum Boonanarring wet concentration plant (WCP) to Atlas, where it had another three years of reserves, “with potential for further expansion”.

After that further relocation options included the neighbouring Hyperion and Helene deposits.

“At Boonanarring, as well as the potential to expand reserves to the north and west, there is also the potential to pump or truck ore from Gingin south and Gingin North,” McEvoy noted.

“For Atlas, there is the potential to increase mine life by pumping from the nearby deposits Hyperion and Helene.

“In addition, Red Gully and Regans Ford provide an option for a future WCP location.”

McEvoy added it was possible one of the dredging targets (particularly Bidaminna) could also be an option for a second operating centre.

Thus far this target has some fairly positive attributes – including a 90 per cent-plus HM grade, less than 5 per cent slimes, a 25-67 per cent leucoxene content as well as a 100Mt exploration target.

McIvoy told RIU delegates that while COVID had inflicted a, “limited impact on our operations”, the key issue for the first half of 2020 came from shipping, with China slow to ramp up production post its new year.

Image, he said, shipped 109,000 tonnes during that period.

However, since about May or June, Chinese demand has been increasing and the company remained on track to ship at its target rate of 90-100,000 tonnes in both the third and fourth quarters.

Moreover, this kept Image on track to meet its 2020 sales guidance of 300-330,000 tonnes, “despite the significant challenges thrown at us this year”.

One interesting development at Boonanarring, which looks set to moderately boost Image’s standing (or image) amongst the sustainability crowd, is the recent on-site construction of a 2.3 megawatt solar farm.

McEvoy told RIU delegates the resources house was now expecting to generate power within the next month.

“Whilst not providing a significant cost saving, renewable energy in terms of solar is expected to provide at least 25 per cent of our electricity requirements for the remainder of the mine life,” he said.

 

 

Venture Minerals Poised to Cross Production Threshold

THE CONFERENCE CALLER: Diversified junior Venture Minerals (ASX: VMS) looks set to become Australia’s next iron ore miner – possibly by late October – at its Riley hematite operation in north west Tasmania. By Mark Fraser

The company currently boasts a diverse exploration portfolio covering a slew of mineral commodities and recently consolidated its position in Western Australia’s premier volcanic massive sulphide country following its acquisition of some new gold/zinc-copper-gold tenure at its Golden Grove North project in WA’s mid-west.

During late August, Venture announced it had started dry screening and associated mining activities at Riley, which sits around 85 kilometres south west of the port city of Burnie.

A direct shipping ore project sourcing a deposit that sits at surface, Riley has current reserves of 1.6 million tonnes grading 57 per cent iron and an expected strip ration of zero.

While activities started at the site in 2013, they were subsequently suspended due to a softening of the iron ore price.

So far Venture has secured an off-take agreement with a tier-one global iron ore trader (Prosperity Steel) for the (current) two year mine life, assembled a highly experienced project team to advance the completion of the decision-to-mine study and reboot of operations, as well as signed road and port access agreements.

During the RIU Resurgence Conference, the company’s managing director Andrew Radonjic said dry screening and associated mining operations had already begun, while the project economics were currently well above the 2019 feasibility study numbers, which were based on a US$90/t-62 per cent iron case.

He also noted the resources house currently had $17 million in the bank, meaning it was in a good position to get Riley up and running.

“The feasibility study done back in August 2019 …. gave us a $13 million profit, and today obviously the price is US$125 per tonne, so (the profit margin) is significantly higher than that,” Radonjic said.

“So certainly, in terms of the project only having a two year mine life, we are certainly well positioned (with) these higher prices over the next couple of years.

“In the meantime, while we are doing our dry screening operations, we’re looking to lock down our funding for the wet screening plant – we’re looking at around about circa $5.5 to $6 million to get that done.

“So, we are probably targeting late next month, and obviously the company has a great opportunity to … move from explorer to producer, so a fantastic outcome for the company.”

In terms of Venture’s expansion of its Golden Gove North project, Radonjic said the acquisition of the strategic landholding in the Yalgoo Goldfield complemented the company’s emerging VMS discovery strategy.

The additional real estate contained a “fantastic intersection” of 22m at 0.76 grams per tonne gold, 0.64 per cent copper and 1.3 per cent zinc from 38m – including 10m at 1g/t old, 0.74 per cent copper and 2.1 per cent zinc from 50m – and sat on a trend between two recently delineated VMS targets (Vulcan North and Vulcan West).

As a result of the purchase, the company’s Golden Grove North project now covers 288 square kilometres of prospective land and sits just 10km from the Golden Grove polymetallic mine.

“So, the first thing we’ll be doing is heading up there to get an EM survey done,” Radonjic told RIU delegates.

 

 

Panoramic Resources Expects to Make Triumphant Return

THE CONFERENCE CALLER: After what has effectively been a four-year hiatus, Panoramic Resources (ASX: PAN) is on the verge of once again becoming a formidable Australian mid-tier base metals producer as it prepares to fully relaunch its wholly-owned Savannah nickel project in Western Australia’s East Kimberley. By Mark Fraser

The refurbished operation, which originally started life in 2004 sourcing open cut ore, had initially been put on care and maintenance during 2016, but was recommissioned in 2018 following the discovery of the Savannah North ore body. It was temporarily suspended earlier this year due in part to the COVID virus.

In July, Panoramic announced a new mine plan for the project based on a healthy reserve inventory of 8.3 million tonnes grading 1.23 per cent nickel, 0.59 per cent copper and 0.08 per cent cobalt for 102,000 tonnes of nickel, 48,500 tonnes of copper and 7,000 tonnes of cobalt.

With the addition of some further inferred resources (located near the above-mentioned reserves), this inventory increases to 10.4 million tonnes at 1.22 per cent nickel, 0.54 per cent copper and 0.08 per cent cobalt for 127,000 tonnes of nickel, 56 million of copper and 8,500 tonnes of cobalt in contained metal.

Panoramic is now confident the project will enjoy a life of around 13 years, with the majority of ore expected to be sourced from Savannah North. It is currently anticipated that the average annual production for years one to 12 will be 8,810 tonnes nickel, 4,579 tonnes of copper and 659 tonnes of cobalt in concentrate.

Over the mine plan, recoveries should average 83 per cent nickel, 98 per cent copper and 92 per cent cobalt based on the historical plant performance for Savannah ore as well as the metallurgical test work conducted on the Savannah North material during 2017.

Meanwhile, the average site all-in costs for years one to 12 of are $7.54/pound payable nickel (US$5.27/lb) net of copper and cobalt by-product credits.

In addition, there are some attractive base case financials involved – namely a pre-tax cash flow of $468 million and a net present value of $262 million.

Located 240 kilometres south of Kununurra, the Savannah project boasts two nickel sulphide ore bodies (Savannah and Savannah North), the underground mine, a 1 million tonne per annum processing plant, a tailings storage facility as well as a 14-megawatt power station.

All up, this represents a $100 million investment which should, according to Panoramic Resources managing director and chief executive Victor Rajasooriar, enable the operation to be brought into production straight away.

Speaking at the RIU Resurgence Conference, Rajasooriar described Savanah as a high-quality asset, with Savannah North being, “the prize that we were going into”.

“When you look at Australian nickel sulphide projects, they are like hen’s teeth – they are very hard to find (and) the nickel sulphide operations that are currently operating are producing grades of less than 1 per cent – I think that the average grade is about 0.6 per cent – and most of those mines are coming to their natural end as well,” he explained.

“And (in terms of) Australian nickel sulphide projects, we are quite well placed when you look at the nickel equivalent grades.”

Rajasooriar also said the updated mine plan was conservative.

Mine dilution at Savanah, for instance, was 12 per cent – it’s now 22 per cent.

Ditto for plant recoveries, which in the old days was 114 per cent as opposed to the current 90 per cent.

Meanwhile the plant, which can churn through one million tonnes per annum, was now set to process 900,000 tonnes a year.

“We’ve been very transparent – we have put all of the costs into the project so that it is very clear,” Rajasooriar said.

“On a base case we are running on about $7.54/lb, and at the consensus case it’s about $7.14.

“Today’s nickel price is about $9.14/lb, so there is a good margin to be made on this project.”

A recent recapitalisation conducted by Panorama, Rajasooriar said, had erased debt and hedging arrangements as well as provided the company with a sufficient runway to progress development to both enable the operation’s reboot as well as fund near term exploration.

It was therefore not surprising that, on the day of Rajasoorier’s RIU presentation, the resources house announced it had launched an exploration program for both Savanah and Savanah North.

At Savannah, surface activities would complete preliminary nickel prospectivity assessments and look at the previous untested oxide and Stoney Creek intrusions.

Meanwhile, the underground drilling at Savanah North would complete an initial test of a series of strong downhole electromagnetic anomalies that were previously identified in several holes.

Earlier this month the company announced that over half of its planned 468 metre ventilation access drive – which has been designed to establish a platform well above the previous zone of instability at its Savannah North underground mine – had been developed, with the remainder to be finished by the end of September.

Upon completion of this ventilation raise and certain other underground works, the project would be significantly de-risked and capable of being fully rebooted by the end of 2021.

 

Strategically Placed in Two Highly-Prospective Regions

THE CONFERENCE CALLER: Despite recently spending a fair portion of its energies promoting its recent gold acquisition and exploration developments in Western Australia’s Pilbara, Kalamazoo Resources’ (ASX: KZR) non-executive director Paul Adams spent the bulk of his time at the RIU Resurgence Conference podium talking about the company’s yellow metal assets in Victoria – a state which has been hard hit by the COVID curse. By Mark Fraser.

There was, however, a good reason for this – and it wasn’t because Adams ran out of time.

Rather, Kalamazoo sees plenty of exploration upside at its Central Victorian holdings, where historical production at its Castlemaine and South Muckleford projects has yielded 5.6 million ounces and 2.1 million ounces respectively.

In particular, the company is cognisant that average historical drilling (at least in the Castlemaine project area) has only been to 137 metres depth.

Moreover, there have been two recent developments which have further piqued the junior’s interest.

The first has been Kirkland Lake’s (ASX: KLA) ongoing success at the Fosterville gold mine just to the north east.

Second, Kalamazoo’s maiden 4,500m drill program back in March returned an intersection of 1.42m at 261 grams/tonne gold – a stunning result, which caught the eye of the investment community.

The WA-based explorer is now planning to start a 3,000-4,500m diamond drilling campaign at Castlemaine’s Lightning prospect – which is located at the northern end of the project area – within the next few weeks testing known high-grade historically mined areas.

Another 5,000m of diamond drilling has also been earmarked for Castlemaine’s Wattle Gully and Wattle Gully South targets, which will focus on gold in-soil anomalies as well as test previously identified mining locations.

In addition, Kalamazoo has a 7,000m RC program planned for its South Muckleford project – again focusing on in-soil anomalies.

Speaking after his RIU presentation, Adams told The Resources Roadhouse that the initial work at Lighting would probably go to 400-500m depth.

“This area has really not been drilled too much before, so there will be initially some shallower drilling, and then an expansion of that as we see the results come through,” he said.

“Most of the deeper drilling in the Castlemaine project has been around Wattle Gully, where they produced 4,000 ounces at 11 grams per tonne gold.

“It just hasn’t had any attention for many decades, so we are using advanced geochemistry techniques looking at things like alteration patterns and mica compositions to help us determine where the fluid flow is, and where the heat sources are, and therefore where the fluids will probably come from.”

During August Kalamazoo expanded its gold exploration footprint in WA with the acquisition of the 1.65 million oz Ashburton project from Northern Star Resources (ASX: NST) for $5 million (based on the mining of 250,000 tonnes of ore) and a net smelter royalty.

Covering 217 square kilometres of prospective real estate, Ashburton sits on the edge of the Pilbara Craton around 30 kilometres south east of the iron ore mining town of Paraburdoo. It currently has a JORC-compliant mineral resource of 2.08 million tonnes at 2.5 grams/t gold for the 1.65 million oz.

Ashburton covers four mining leases and three exploration licences – including Mt Olympus (15Mt at 2,2 g/t for 1.080 million oz) and Peake (3.7Mt at 3.4g/t for 399 gold oz), both of which were mined by WA resources house Sipa Resources (ASX: SRI) as part of its Pilbara operation between 1998 and 2004.

Then there’s Zeus (1Mt at 2.2g/t for 72,000 oz), Waugh (600,000t at 3.6 g/t for 68,000 oz) and Romulus (300,000t at 2.6 g/t for 27,000 oz).

During its stay in the region, Sipa produced 350,000 oz from ore grading 3.5g/t, with the majority of the yellow metal coming from Mt Olympus, where 25Mt of ore grading 3g/t yielded 242,000 gold oz.

Under the terms of the agreement with NST, Kalamazoo will pay a 2% NSR on the first 250,000t mined, after which the rate will drop to 0.75%.

Although Adams indicated Kalamazoo is now looking to embark on an extensive exploration and drilling campaign to substantially increase the project’s combined oxide-sulphide gold resources, another of its targets in the region has also starting to gain some serious exploration traction.

Located about 120 km south east of Karratha, the 136 square km (The) Sisters sits on the region’s Wohler Shear some 50 km south west of De Grey Mining’s (ASX: DEG) Malina gold project and the company’s recent world class yellow metal discovery at Hemi.

It is one of three assets the Kalamazoo picked up in 2018, with the others being the Marble Bar and DOM’S Hill gold projects to the east and north east respectively.

Last month the exploration house said numerous geochemical and geophysical gold targets had been identified in the area after a geochemical soil sampling program – incorporating the CSIRO’s Ultrafine+ soil analysis and interpretation technology – identified a broad 2.1km by 1km in soil anomaly, with up to 70 parts per billion gold, near a north-south offset in the Wohler Shear.

This geochemical survey at The Sisters was the first large scale gold-focused exploration program undertaken in this area, and had targeted the Wohler Shear Zone over a 14km long structural corridor.

Importantly, these gold anomaly zones were consistent with magnetic features recently identified by airborne magnetic and radiometric surveys.

 

Junior in Right Geological Setting for Field Success

THE CONFERENCE CALLER: An active field campaign is helping Apollo Consolidated (ASX: AOP) set itself up within the next generation of domestic gold producers as it expands the inventory of the company’s wholly-owned one million-ounce (plus) Lake Rebecca project in Western Australia’s Eastern Goldfields. By Mark Fraser

Since announcing Lake Rebecca’s total indicated and inferred mineral resource of 27.1 million tonnes at 1.2 grams per tonne gold for 1.035 million ounces (in optimised pit shells) earlier this year, the junior has been busy in the field, with infill, extensional, RC and diamond drilling continuing to deliver mouth-watering results.

Comprising 160 square kilometres of tenure located some 150km east of Kalgoorlie-Boulder, the project covers the eastern margin of the Norseman-Wiluna Greenstone Belt and sits at the southern end of the Laverton Tectonic Zone.

Located in a similar geological setting just 140-150km to the north-west are three world class gold operations – Barrick Gold Corp’s (TSX: ABX) Granny Smith and Wallaby mines as well as AngloGold Ashanti’s (ASX: AGG) Sunrise Dam project.

As it stands, Apollo is currently targeting three key Lake Rebecca prospects – the flagship Rebecca, which contains 775,000 oz (indicated and inferred), Duchess (180,000 inferred oz) and Duke (80,000 indicated oz).

Although Apollo managing director Nick Castleden told delegates at today’s RIU Resurgence Conference in Perth that Rebecca would “drive the project forward”, he was also keen to point out that the company had not been resting on its laurels when it came to its field activities.

Deeper diamond drilling since the announcement of the inferred resource, for instance, had revealed underground mineralisation with gold intercepts of:

5m at 2.5g/t
5m at 5.53g/t
14m at 1.3g/t and
22m at 3.44g/t.

Additionally, during late August, the junior announced it had identified further mineralisation at Cleo, situated some 2km to the west of Rebecca, where an anomalous zone of at least 150m wide was established.

According to the company, this material is hosted by fine grained disseminated sulphides in micro-diorite to amphibolite, as opposed to the granodiorite gneiss found at Rebecca, Duchess and Duke.

Two RC holes in particular – 38m at 2g/t gold from 65m depth (including 2m at 20.4g/t from 74m) and 2m at 9.39g/t (with 1m at 17.2g/t) – were particularly encouraging as they sit within widespread gold anomalism totalling 113m at 0.46g/t from 31m.

Meanwhile, another drill hole located 100m to the north also intersected widespread gold anomalism (70m at 0.34g/t from 15m). A fresh rock result of 2m at 9.39g/t from 47m, including 1m at 17.2g/t from 48m, was also welcomed by the junior.

Further shallow infill RC drilling at Duchess – which sits just 4km south of Cleo and Rebecca – also came up with the goods, returning gold intercepts like 9m at 1.82g/t from 11m and 24m @ 0.87g/t from 50m, 12m at 1.15g/t from 76m, 9m at 1.17g/t from 113m (as well as multiple plus-5m hits at 0.50g/t), 14m at 0.74g/t from 40m, 35m at 0.90g/t from 94m, 10m at 1.46g/t from 148m and 18m at 0.74g/t from 161m.

Drilling will continue around the three key deposits at Lake Rebecca and along further exploration targets, including Cleo, throughout the remainder of the year.

Further diamond drilling will also test specific high-grade step-down exploration targets at the Rebecca deposit.

An additional 12 infill RC holes have also been completed at the 80,000oz Duke deposit as part of a planned mineral resource definition program, while the RC rig is now undertaking infill and step-out drilling at Rebecca.

Apollo also plans to start some of the longer-lead project fieldwork that will feed into option analysis and future mining studies.

Castleden told the conference delegates Lake Rebecca represented, “a window to what can be done in a pretty mature terrain”.

“Certainly, there is a lot of interest in this company because we do things in a constrained and conservative sort of way,” he said.

“These are real ounces – we think they can be dug up with real machinery.

“The metrics for our shareholders are undemanding, we think, compared to some of our peers; certainly, it’s not a high-grade system, but it is a very solid system.”

The company remains in a strong financial position to continue its exploration endeavours, with $21 million in the bank as at the end of June 2020.

Although it had been active in the west African nation of Cote d’Ivoire, Castleden indicated Apollo was now strongly focused on developing its WA assets.

It does, however, retain a valuable royalty interest (1.2%) over the growing (plus) 1 million oz Seguela gold project, which is being developed by Canadian gold miner Roxgold (TSX: ROXG), where an NI 43-101 indicated resource of 529,000 oz at 2.3g/t and an inferred one of 508,000 oz at 2.9g/t, covering four deposits, has been established.

Castledine said he was expecting the Canadian company to make a mining decision regarding this project within the next 12-18 months.

 

Argonaut Chief Lauds ASX at RIU Resurgence Conference Opening

THE CONFERENCE CALLER: Argonaut chairman & head of corporate finance Eddie Rigg opened the RIU Resurgence Conference in Perth with an interesting look at the importance of the role played by the ASX to the well-being of the resources industry.

The resources sector is the number one sector on the ASX by number of companies – around 750 in total.

That means approximately 40 per cent of all companies listed on ASX are resource companies that are currently operating in 80 different countries.

“Without question…the ASX is now dominating the global stock markets in resources,” Rigg told the opening session audience.

Rigg said the ASX has led the world over the past three years in terms of the number of resource Initial Public offerings (IPOs) and Follow On (FO) raisings.

“The number of transactions over in the last three years on ASX is more than all the other exchanges combined,” he said.

“Yes. New York has raised more money, but on a very few transactions.”

In the 2017- 2020 time-frame, the ASX saw over 1800 capital raisings, raising around $28 billion.

This compares most favourably versus the TSX, which used to be Australia’s biggest competitor, that raised around $13 billion featuring very few transactions- less than 200 over three years.

Since COVID the TSX welcomed around 30 raisings, while back home there have been over three hundred companies to have raised money since mid-March to the end of August (2020)

“Thankyou to marijuana and thankyou to crypto-currency because effectively you have imploded their market, making our market the dominant (resources) market,” Rigg said.

Follow-on raisings completed on ASX since COVID have resulted in over $7 billion hitting the boards, although this figure is partly distorted by $1.1 billion raised by Newcrest, nevertheless that is a lot of money going into the local industry.

Only 10 companies raised $100 million or more, make that 11 companies now with the raising completed by De Grey Mining this week.

“That lot of money is going to come up with a lot of discoveries,” Rigg declared.

“85 per cent of the raisings completed were done by companies with less than $100 million market cap.”

Rigg put the success being enjoyed by the local bourse down to its modus operandi, which he said stood out from the rest of the world’s exchanges.

“The ASX has wonderful rules, they are actually enhancing the rules to make sure we don’t get the undesirables back in our industry,” he stressed.

“It is a market that has enormous integrity. The capital raising rules in Australia are so far superior.”

“It’s a wonderful opportunity, it’s a wonderful industry, and it’s a wonderful market.”