Kalgoorlie Gold Mining is set to pocket up to $12 million following the closing date of its initial public offering on the 26th of October. The company is set to list on the Australian Securities Exchange on 12 November and plans to use the money to follow up on some bonanza historical gold hits east of Kalgoorlie that inexplicably were never really run to ground. Kalgoorlie Gold will spin out of ASX-listed Ardea Resources who has been quietly amassing some serious gold tenure amongst its massive nickel holdings in WA.
The company will come to market with some seven gold projects scattered around WA that were previously housed under Ardea’s roof but did not receive enough love from Ardea given its principal focus on its massive nickel deposits near Menzies.
The flagship Kalgoorlie Gold asset will be the Bulong-Taurus project about 40km east of Kalgoorlie in the renowned Bulong mineral district that has been giving up precious metal riches for decades.
Of the list of notable historic drill hits that were never pursued fully at Bulong-Taurus, one stands out in particular. A 5m intersection came in at a whopping 52.1 grams per tonne gold – and from only 15m downhole at the Great Ophir prospect within the greater Bulong Taurus gold project.
It is hard to understand why hits like this were never properly followed up by past explorers. One possible explanation is that it was very close to the tenement boundary which is no longer an issue as Kalgoorlie Gold and Ardea have now brought multiple tenements together under the one roof in the region – a feat that had not been achieved for decades.
The Bulong Taurus gold project that takes in 82 square kilometres hosts four significant prospects including Great Ophir, the Central prospect, the Trafalgar prospect and the Turnpike prospect. The four prospects are all situated on or in close proximity to the Goddard fault that is a splay structure of the regionally significant Mount Monger fault, hosting the multimillion-ounce Daisy Milano gold mine.
Despite the eyebrow-raising gold sniffs historically drilled at the Bulong Taurus gold project, surprisingly the area has seen no modern and systematic exploration efforts since the 1990s with the majority of drill holes barely scratching the surface. Kalgoorlie Gold Mining considers 90 per cent of historical drilling to be ineffective, including many drill holes that reached a meagre 10m in depth.
Another stellar gold intersection at Bulong-Taurus, this time from the Central prospect that again was never followed up, was 10m going 39.1 g/t gold from 128m.
Both the 5m and the 10m high-grade intersections have Kalgoorlie Gold’s attention and both are screaming to see the drill bit – something that will happen almost straight away after the IPO is locked away.
Trafalgar and Turnpike are no slouches either with a historical 4m intersection grading at 9.34 g/t gold from 16m at Trafalgar and 4m grading 6.81 g/t gold from 24m at Turnpike also patiently awaiting the arrival of the rotary truth diviner.
Ardea previously did a deal with some Kalgoorlie prospectors at Turnpike who have managed to unearth at least one serious pan load of sizable gold nuggets.
Listed companies will often use local prospectors as “forward scouts” to scope out an area that is prospective for potential gold at depth based on surface alluvial nugget discoveries and Kalgoorlie Gold has done this to great effect and will get a serious leg up from these nugget occurrences when drill targeting.
The basic theory is that eluvial gold nuggets often only manage to travel a very short distance historically from their source rock and can sometimes lead to a Eureka moment when probing deeper structures below these nuggets with the drill rig. Fine filigree gold has also been seen in the area attached to quartz veins that provide some supplementary evidence to support the hypothesis of a larger scale obscured bedrock lode nearby.
The company is currently re-evaluating a shallow, non-JORC resource at the Central prospect that was subject to extensive RC and some diamond drilling in the 1990s. High-grade mineralisation has been noted there including historical drill hole BD6 that returned a 3m mineralised parcel running at a cracking 115.7 g/t gold from 135m. All historical drill holes lie within a 21m thick mineralised and altered zone. Proposed drilling at the Central prospect will aim to confirm the mineralisation recorded in drill hole BD6 and follow up on fresh mineralisation at depth whilst testing the near-surface oxide potential.
The Trafalgar prospect has seen some limited RAB drilling in the 1990s that identified shallow gold mineralisation yet to be followed and the company has determined that a re-assessment of Trafalgar will be part of a larger play in determining the priorities at Bulong-Taurus.
Back in 2013, Turnpike caused a bit of curiosity when RC drilling unearthed an 8m intersection grading 2.64 g/t gold from 72m.
The greater Bulong Taurus area has been mined by prospectors as far back as the 1890s, however ownership of the tenement package has been fragmented with minimal meaningful exploration efforts undertaken as a result. For the first time in decades, the Taurus mining centre has tenure continuity meaning modern and systematic exploration strategies can be utilised to gain a thorough understanding of the geology.
Ardea resources recently completed detailed mapping and took 54 rock chip samples from around the historic Taurus Great Ophir underlay shaft in addition to multiple other workings in the Bulong Taurus project area. 22 of the rock chip samples contained 1 g/t gold or greater with the average grade for all samples collected coming in at an impressive 4.86 g/t gold. Locations of the rock chips will be included in the extensive arsenal of information being transferred from Ardea to Kalgoorlie Gold geologists.
In addition to the flagship Bulong Taurus gold project, the company will focus on three other projects initially including the Laverton Tectonic Zone hosted Zelica South and Pinjin West prospects, the Keith Kilkenny Tectonic Zone hosted Aubils prospect, Boyce Creek-Jump Up Dam and Lake Rebecca gold targets and the Kalgoorlie group Ninga Mia tenements.
The Kalgoorlie group is made up of seven tenements covering 14.5 square kilometres with numerous surface workings, strongly altered outcrop and historic anomalism that has never been followed up.
The Ninga-Mia tenements are just a good tennis ball throw from the tip of the iconic world-class Kalgoorlie Superpit. The area is composed of the black flag suite of rocks that host a known mineralised geological contact with common structures in the golden mile, part of the same sequence that hosts the multimillion-ounce Superpit. The regionally significant gold-controlling structure, the Boorara Shear, trends northwest through the area.
The Kalgoorlie Gold Mining spin off is not Ardea’s first rodeo when it comes to spin outs. The company previously successfully spun its NSW base metals assets out into Godolphin Resources in 2019.
Between 35 million and 60 million shares will be offered to the public in Kalgoorlie Gold at $0.20 per share to raise a minimum of $7 million and up to a maximum of $12 million.
Ardea shareholders will get an in-species distribution of 35 million shares and Ardea itself will hang onto a further 9 million shares in the new entity. Bulong-Taurus and Ninga-Mia vendors will pick up another 5 million shares, taking the total shares on issue to between 84 million and 109 million depending on how much is raised.
Kalgoorlie Gold will be run by experienced Geologist Matt Painter who previously amassed and nurtured much of Ardea’s gold tenure from the back room at Ardea.
Ardea and Kalgoorlie Gold Mining will continue to assist each other post spin out through a shared office in West Kalgoorlie and most importantly, joint access to Ardea’s extremely valuable pulp archive.
If you talk to the Kalgoorlie locals about the Bulong area to the east of Kalgoorlie you will get a lot of knowing looks – particularly from the old-timers who are only too aware of the gold prospectivity of Bulong.
It is curious how Ardea and Kalgoorlie Gold managed to put together so much contiguous ground in Bulong with so many historic targets to follow up.
If Kalgoorlie Gold Mining can even come close to replicating the historic 5m at 52 g/t hit or the 10m at 39 g/t intersection, it will be game on for the aptly named and newly listed company.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
