To play in a land of the giants, you need the right address, the right backers and, most importantly, the right results. ASX-listed junior Kuniko Limited appears to be ticking all three boxes as it methodically pieces together an emerging precious metals and polymetallic puzzle in the revered New South Wales’ Lachlan Fold Belt.
This is a region that hosts some of Australia’s most significant mineral deposits. Newmont’s Cadia-Ridgeway operation weighs in at a colossal 40 million ounces of gold and 10 million tonnes of copper, while nearby Evolution Mining’s Cowal mine holds an impressive 14 million ounces of gold. Its elephant country, pure and simple and not a place for the faint of heart.
With a neat and uncontroversial pivot out of Norway recently, early drill results have delivered some of the most spectacular silver-gold grades seen in the region in recent times, hits that all scream "keep drilling here" for Kuniko.
The company’s new focus is its flagship Commonwealth-Silica Hill project, where a recently completed phase-one drill campaign has not only validated Kuniko’s pivot, but also uncovered a serious new discovery.
Initial step-out drilling at the known Silica Hill deposit was already throwing up some quality extensions, including a 50-metre hit running 2 grams per tonne (g/t) gold equivalent, before a bold step-out hole into the beyond uncovered a bonanza grade prize that could open up the entire project area.
The headline discovery intercept returned 0.5m grading a whopping 27g/t gold and a jaw-dropping 20,603g/t silver from 230m downhole, as part of a broader 84m zone grading a solid 2.6g/t gold equivalent.
The single half-metre hit is equivalent to more than 347g/t of gold, a discovery that has understandably prompted the company to accelerate its phase-two programs and chase up this precious metals-rich prize.
The discovery was importantly intersected on the opposite side of a major structural fault to its high-grade Silica Hill deposit, on the same side as its shallower Commonwealth prospect.
The fact that high-grade mineralisation is now occurring on both immediate sides of the fault, suggests mineral-rich fluids have been escaping from a potentially large and fertile system at depth and dispersing through the surrounding rock package in multiple directions.
Every single hole of the initial six-hole program hit mineralisation over roughly 500m of strike length, which crucially, remains open in all directions and at depth.
Just 200m away at Commonwealth - a polymetallic volcanogenic massive sulphide (VMS), rich in gold, silver, zinc and lead - Kuniko’s initial drilling also hit paydirt, with one hole intersecting 7.1m at a solid 9.7g/t gold equivalent, including a richer 3.1m core going 21.6g/t gold equivalent.
The proximity of these two distinct but high-grade mineralised systems has geologists excited, with one theory suggesting the recent discovery below Silica Hill could even be linked back to Commonwealth from an expanded and daring step-out hole in phase-two. A successful hit there could be the eureka moment that proves a potentially interconnected big mineralising event. It could in fact be that a much larger, porphyry system is lurking below – the exact type of massive copper-gold source that made the Lachlan Fold belt so revered in the first place.
With a drill rig secured for a phase-two campaign in early July, Kuniko is planning to test that theory.
The geological intrigue does not stop there.
Management believes Commonwealth may represent Australia's only known precious-metals-rich VMS system, displaying many similarities to Canada's world-renowned Eskay Creek deposit, one of the richest precious metal mines ever discovered.
The company is busy earning into the project from Impact Minerals, with Kuniko now layering on its own successful drill data for a maiden JORC resource estimate, slated for the second half of this year.
Impact’s historical estimate sat at a solid 88,800 ounces of gold, 3.3 million ounces of silver and considerable base metals credits, with Kuniko confident it can comfortably expand on that.
Kuniko Limited managing director Maja McGuire said: “The Phase 1 drilling program was a resounding success, with all holes hitting mineralisation and delivering several bonanza-grade intercepts of gold and silver. Our confidence in the project's potential has grown significantly, and we are now well-positioned to advance a larger Phase 2 drilling campaign.”
Beyond the steady growth of the known deposits, the blue-sky potential across Kuniko’s 575-square-kilometre tenement package is undeniable. Such high grades and different styles of mineralisation simply don’t appear out of thin air, prompting the company to complete a MobileMT airborne geophysical survey. The assessment defined a 4km-long prospective corridor running through the project area showing geophysical responses in places that are remarkably similar to the known deposits at the project.
The regional corridor, highlighted by a high-resistivity signature, links the known mineralisation at Commonwealth and Silica Hill and points to a raft of new, untested targets along a major controlling fault structure.
Adding to the regional exploration potential are the historically mined Stringers and Walls workings, just a kilometre from the main deposits. These areas host old mine shafts from a bygone era when grades were king.
Rock chip sampling by previous explorers at Stringers returned grades up to 6.3g/t gold and 120g/t silver, yet the prospect has never seen a single drill hole.
At Walls, a lone historical hole hit a promising 20m at 0.5g/t gold and 27g/t silver, but it was never followed up, with both representing compelling, walk-up drill targets for Kuniko in the immediate future.
The prospectivity of the Lachlan Fold Belt continues to churn out major discoveries, including Alkane Resources recent 10-million-ounce Boda Kaiser porphyry, attract serious global major attention.
This kind of major-league interest underscores the potential that lies within the belt and Kuniko seems to have its own share of influential backers.
Global automaker Stellantis, a leader in the electric vehicle space, is Kuniko’s largest shareholder with an 8.2 per cent stake. The company was spun out of Vulcan Energy Resources, which retains a strategic holding. And notably, Kuniko’s Chairman is Gavin Rezos, who also serves as the family office manager for Australian mining entrepreneur John Hancock.
For a junior explorer with a market cap of just over $7 million, Kuniko is punching above its weight. It has secured a foothold in one of Australia's premier mineral belts, the backing of serious corporate and financial players and now, a string of high-grade drill results that point to the potential for a significant precious metals deposit.
With the drill rods set to start spinning again in July on a campaign aimed at both growing the known resource and chasing the blue-sky, Kuniko is no longer just a hopeful explorer in a land of the giants. It is steadily building the foundations of what could become its own seat at the table of NSW’s mining elite.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
