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.