As its moniker suggests, the recently listed Kalgoorlie Gold Mining (ASX:KAL) sees no reason to stray beyond what chief executive Dr Matt Painter dubs “one of the world’s most prolific gold provinces.”
To detractors, the storied gold region may have a lustrous history, but the easy stuff has been exploited already. WA’s state-wide labour shortage and supply chain problems (such as lab assay delays) have also been well documented.
But to Painter, the Kalgoorlie-Boulder regions till boasts “incredible” prospectivity – and one doesn’t have tor drive too far to get excited. The company’s flagship project, Bulong Taurus, is a mere 35 kilometres east of the town – and on a sealed road.
At the most, the company’s five key projects are within three hours by car – a drive around the block by expansive WA standards.
Painter says the projects are based on regional structures which are both well-known and vastly underexplored. “We have plans to rapidly build robust gold resources in the region on the back of these,” he says.
The company’s exploration efforts to date have focused on Bulong Taurus, on the prolific Goddard Fault.
The district includes Silverlake Resources’ one million ounce plus Daisy Milano project at Mt Monger to the south, Horizon Resources’ Glandore Project to the near south and the Black Cat Syndicate’s Kal East Project (including a proposed mill) to the west.
“They are good neighbours and they are there for a very good reason – because the ground is so prospective,” Painter says.
The company’s geologists are excited by both the rich nature of outcropping and near surface gold, as well as the potential for mineralisation at depth.
The company has 39 tenements at Bulong Taurus, consisting of both mining and prospecting licences. The area had been mined by prospectors almost continuously since 1890s.
KalGold’s priority target is La Mascotte, which has already revealed outcropping gold and gold mineralisation within 150 metres from surface.
The key areas of interest boast a historic resource, which needs to be “thoroughly revised” to meet modern Joint Ore Reporting Committee (JORC) standards.
Painter says the company is pursuing the theory that La Mascotte is actually a fractal system, with faults branching off the main Goddard line.
“Daisy Milano is like that and we think La Mascotte is as well,” Painter says. But he reckons the best comparator is Ramelius Resources’ 1.1 million ounce Rebecca Gold Project, on the Norseman-Wiluna Greenstone Belt 145 kilometres east of Kalgoorlie.
“Both La Mascotte and Rebecca contain widespread, shallow gold intercepts at several centres,” he says.
“At Rebecca, these were followed up and brought together to define extensive resources.”
A spin-off from nickel miner Ardea Resources, KalGold listed last November under the ASX code KAL. This followed a $7.48 million capital raising at 20 cents apiece.
True to its “go get ‘em” mantra, the company has already drilled 8540 metres across 92 holes on Bulong Taurus, 85 of them reverse circulation (RC) and seven of them diamond. About one-third of the holes were sunk at La Mascotte.
The activity to date has resulted in ten new targets and four discoveries.
Painter points to the “beautiful” intercepts at La Mascotte, such as ten metres at 39 grams per tonne gold, at a depth of 128 metres.
Another was 3 metres at 7.25 g/t, from 11m and 2m at 16 g/t at from 43 metres.
A program of 90 holes in the 1980s and 1990s included grades of 7m at 14.87 g/t at surface and 18m at 1.23 g/t at 1m (including 2m at 4.95 g/t/).
“We are hitting a lot of high quality, high grade mineralisation near surface and it is oxide material which is very much in demand,” Painter says.
In coming months, work will centre on expanding on these discoveries to show continuity of the down-dip extensions at La Mascotte.
Painter notes that several of the richest holes were at depth, which opens the possibility of the surface oxide material being the tip of the iceberg.
The company also intends to further explore the north-west segment, which has been largely undrilled, as well as checking shallow areas to the west for hanging wall structures (additional mineralisation above the main body).
Painter notes the initial 250 metres strike length – on which the initial resource estimate was based – has been extended to around 700 metres. This enhances the potential for a bigger and better resource.
Painter says KalGold’s gold rights over all of the tenements allows for full appraisal of the mining centre – the first time in decades this has been achievable.
At Knockhill – another Bulong Taurus target – first-pass geophysics identified “exceptional” results on four of the five targets, including 12 metres at 2.09 grams per tonne gold, from only four metres depth.
“You could almost get down there with a shovel,” Painter says.
“If you get above 0.1 grams per tonne in first-pass exploratory drilling, you would think to do more work, so to get four out of five new target areas returning these sort of numbers means we are doing something right.”
As for those labour shortages, Painter says there are advantages in being based in Kalgoorlie rather than Perth.
“Our geologists spend more time in the bush and less in the office,” he says.
“We also have good relationship with drilling companies, we can pick up the phone and call them.”
Somewhat unusually, the company welcomes the ongoing presence of individual prospectors who have worked the tenements historically. “They have an incredible understanding of the landscape and where gold structures fit in with that,” he says.
“It’s like having another set of eyes on the ground.”
Despite the promising initial drilling hits KalGold shares are trading at a sharp discount to their issue price, which Painter says does not reflect the “assets, activities and potential” of the company.
“It’s a good opportunity for investors to get in before we test for high-grade shoots at La Mascotte,” he says.
“We will also look further, given we have a good handle on the scientific reasoning about where the gold is and we’re zooming in on particular areas so we can get the best bang for our buck.”