Reach Resources has kicked off a 5000-metre reverse circulation drill program at its Murchison South gold project near Paynes Find in Western Australia, targeting a mix of infill and extensional drilling.
The work is centred around the company’s flagship Blue Heaven deposit, where it already holds a handy resource of 681,000 tonnes at 2.8 grams per tonne (g/t) gold for 61,300 ounces of relatively shallow gold.
Importantly, the Blue Heaven resource sits within Reach’s existing mining lease at Murchison South, opening the door to a near-term toll treating production scenario that would see it get into early cashflow.
Management says its infill drilling of about 2400m will tighten spacings to lift the inferred gold material into the indicated category – a critical input for the ongoing scoping study that is looking to fast-track production.
The remaining 2600m will chase undrilled quartz veins and historic workings immediately beside the four conceptual pit shells – North, Central, Southeast and South.
Eleven holes are planned east of the Central pit and north of the Southeast pit beneath a dense cluster of mapped veins and old diggings that have never seen a drill bit.
Reach will simultaneously conduct an extensive rock-chip program at Murchison South, to collect up to 500 samples guided by geophysical structures and surface quartz.
Targets include the company’s Pansy pit, which recently added 5800 ounces to its resources from historical data alone.
The Murchison South project sits on a granted mining lease alongside the highway at Paynes Find, a humming gold address less than 70km south of the privately owned 2 million tonne per annum Kirkalocka carbon-in-leach plant that is being readied for a 2026 restart.
The company says metallurgical test work from two October diamond holes is already underway to confirm compatibility with Kirkalocka’s oxide, transitional and fresh ore circuits, which could deliver 90-98 per cent gold recoveries.
With gold again pushing north of $6400 an ounce, Reach’s conservative $3500 an ounce pit shell could be considerably expanded to add more ounces and even a modest indicated resource upgrade could underwrite an early toll treatment operation.
The infill program could give rise to toll mining within weeks of assays, while extensional hits could quickly swell the inventory available for haulage.
As Reach tightens its resource confidence it is proving to its big production neighbours that it is worth tangoing with. And with gold trading at huge prices, the company would only need to mine a small amount of its current 61,000 resource to create meaningful cashflows.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
