Reach to drill out Murchison South as toll treating options loom

With a myriad of listed companies now making serious money out of toll treating, Reach Resources has moved to drill out its Murchison South gold project about 800km north of Perth in Western Australia.

The company is set to mobilise a reverse circulation (RC) drill rig in mid-November for a ~5000m infill and extensional drilling program at the project with a view to exploring a fast pathway to cashflow via toll treating in the region.

The infill campaign will focus on closing up of drill spacings within its Blue Heaven deposit which comprises the company’s four conceptual pit shells - North, Central, South and Southeast - to convert inferred resource material into the higher indicated category, which is a key input for the company’s ongoing scoping study. 

The current combined resources at Blue Heaven amount to 681,000 tonnes at an average grade of 2.8g/t gold for 61,300 ounces of gold and the company is looking to get a number of those ounces scrubbed up initially to make a start on toll treating options.

 Other extensional drilling will chase-up underexplored and unmapped quartz veining and historical workings immediately adjacent to the open pit shells.

Recent structural and geophysical reviews have pinpointed high-priority targets along strike of the Blue Heaven resource. A dedicated rock-chip sampling program will test these zones, with results to shape the next exploration phase.

Reach Resources CEO Jeremy Bower said: “As we continue to progress our Scoping Study, we have identified several gaps in drilling near our current conceptual pit shells. In light of the strong gold price this new information warrants a targeted infill drill program in order to maximise the Indicated resource category and further test for additional mineralisation lodes.” 

In October, Reach completed two diamond holes for a total of 127m, successfully capturing the targeted triad of oxide, transitional and fresh rock across various gold grade ranges. 

Logging of the core has revealed two previously unrecognised vein sets - one near-vertical and perpendicular to the dominant NNW structural trend, the other shallow-dipping with similar strike. 

The trends align with surface mapping at the company’s nearby Pansy Pit which sits about 2km south of Range’s Blue Heaven deposit and might signal additional structural controls on mineralisation. 

The drill core has been sent to Bureau Veritas in Perth for cutting ahead of metallurgical testwork to be undertaken by JT Met Services.

The metallurgical studies are proposed to be structured with one eye on private firm Gylden Resources’ nearby Kirkalocka gold processing plant which is conveniently located on the Great Northern Highway, between Mount Magnet and Paynes Find.

The Kirkalocka plant is a carbon-in-leach facility with a nameplate capacity of 2.0 million tonnes per annum. It is currently being refurbished ahead of a planned CY Q2 2026 restart and is capable of efficient treatment of oxide, transitional and fresh ores and has achieved high gold recoveries in the mid to high 90% realm. 

Whilst Reach has not locked away a deal to use Kirkalocka at this stage, the plant’s location puts it within direct haulage range of Reach and could provide a toll treating option. 

The scoping study continues to advance multiple streams - hydrology, hydrogeology, waste characterisation and engineering design - with discussions ongoing with downstream stakeholders.

Reach is upgrading its resource confidence, expanding the footprint of its conceptual pit shells and confirming processing compatibility with the nearby Kirkalocka plant, all of which are logical steps in a well-considered development pathway.

And whilst 61,000 ounces may seem modest, when it comes to toll treating that number could blow the doors of any financial modelling done at today’s gold price. In fact with gold currently trading just north of $6000 an ounce, Reach would not even need to drill out the entire 61,000 ounces (or anything close to it) to start stuffing hundred dollar notes in the tin.

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