Aurumin land grab widens search for Sandstone gold

Following the sale of its Mt Dimer asset, Aurumin has wasted no time in making good its promise to home in on its Sandstone gold play in Western Australia’s Mid West region, with the addition of a new tenement containing three historic gold mines.

The mines – Queen of the Range, Welcome and Phoenix – were worked in the early 1900s and produced 197 tonnes grading 10.58 grams per tonne gold for 67 ounces, 376 tonnes at 27.45g/t for 331 ounces and 82 tonnes at 5.92g/t for 15 ounces, respectively.

Although the new tenement has been mined in the past, Aurumin believes there is plenty of exploration potential left at the site. Anomalous rock chip samples have assayed at up to a solid 8.5g/t gold and soil samples show gold anomalism around historic mine workings that is yet to be tested at depth by the drill bit.

Management now plans to mature its understanding of the tenement with more surface sampling and field mapping as it leverages its debt-free position achieved through a $3million sale of its Mt Dimer project to Beacon Resources late last year.

The sale meant a $6.4 million convertible note held by Collins St Asset Management, relating to the company’s purchase of its Sandstone gold project last year, could finally be consigned to the past.

Aurumin managing director Brad Valiukas said: “Following recent divestments, the Company has a clear focus on advancing our flagship 946koz Sandstone Gold Operations and generating the critical mass for future production. We are pleased to be further solidifying our tenement footprint in the Sandstone region with this additional tenement grant.”

The company says the new tenement (“E57/1254”) consolidates the greenstone trend that also hosts the Bellchambers and Bulchina gold mineralisation.

The Bellchambers gold deposit, owned by Venus Metals, is about 15km south-west of E57/1254 and has historic reported gold production of 3688 ounces from 5620 tonnes of ore at an average grade of 21g/t gold. Venus says Bellchambers has a resource estimate of 22,000 tonnes at 1.31g/t gold for 30,500 ounces.

Some of the reverse-circulation (RC) drill hits from Bellchambers include 34m at 1.25g/t gold from 160m including 11m at 2.93g/t, 1m at 9.47g/t from 178m, 25m at 1.19g/t gold from 86m including 4m at 2.06g/t and 17m at 1.16g/t from 155m including 4m at 2.12g/t.

The Bulchina gold mine is an abandoned open pit about 20km south-west of Aurumin’s ground and has produced 223,000 ounces of gold.

The successful grant of E57/1254 signifies another expansion of Aurumin’s footprint at its Sandstone operation, which already boasts a mineral resource of 881,000 ounces of gold in its central portion. The nearby Birrigrin and Johnson Range operations make up the remainder of the project, bringing the total gold resource to 946,000 ounces.

Johnson Range has a mineral resource of 64,700 ounces at a grade of 2.51g/t gold and sits about halfway between Southern Cross and Sandstone, while the Birrigrin project area, about 70km north of Sandstone, has 39 mapped shafts dating back to the early 1900s, with recorded production grades of up to 196g/t gold.

Since the discovery of gold at the end of the 19th century, the Sandstone greenstone belt has produced more than 1.3 million ounces from many underground and open-pit mining operations.

Now, Aurumin has sent a clear message to the market with its aggressive land grab at Sandstone, leaving no doubt that management thinks those miners may have left something behind.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au