Kingwest Resources (ASX:KWR), the owner of the Menzies Gold Mine located around the namesake town in Western Australia. KWR bought the Menzies asset in September 2019, for a consideration of $8 Million in cash and shares, on a base valuation derived from the existing JORC open pit mineral resources from Horizon Mining.
Drilling Plan and Targets Source: Kingwest Resources
An au courant audience needs to know that the wholly owned Menzies brownfield project is located 130 kilometres north of Kalgoorlie and hosts local established infrastructure of roads, water, power with existing processing plants.
The Menzies goldfield is located on one of the hottest mineralization grounds of Norseman-Wiluna greenstone belt and is ~10 kilometres long with ultramafic instrusions further ahead.
Historic production & geology
Source: Kingwest Resources
Menzies Gold mining project historically operated till the late 1990s with over 800-kilo ounces of gold production at 19 grams a tonne grade of Gold including 650-kilo ounces of Gold at 22.5 grams a tonne from underground and 150-kilo ounces from the near-surface open pit operations across multiple deposits.
Kingwest commenced 8,000 metres initial drilling program in September with significant diamond drilling, considering the historical mining data and the intrusive gold mineralisation of the deposit. The brownfield targets had been dormant for the past 20 years and hold additional high-grade underground mining potential which is yet to be evaluated.
A total of 5 deposits namely, Yunndaga, Lady Shenton, Pericles, Selkirk and Lady Irene Deposits, were drilled with gold intersections in all the deposits.
Kingwest completed a diamond drilling program during Q4 2019 which was designed to identify and target high-grade gold lodes from the historically mined zones at Menzies. A total of five prospects were tested with outcomes of high-grade mineralisation from each one of them.
Important insights from initial drilling campaign at the five deposits are as follows:
- 21.1 gm Au from 105.7m in KWD003 at Selkirk
- 41.5 gm Au from 125.27m in KWD008 at Pericles
- 40.7 gm Au from 99.65m in KWD032 at Yunndaga
- 21.5 gm Au from 291.50m in KDW027 at Lady Shenton
- 57.6 gm Au from 121.52m in KWD030 at First Hit
High-Grade Gold Mineralisation Open at Menzies Gold Project: Read Here
The 2019 drilling program has already started to bear the benefits, leading to almost 87% increase in the contained Gold in mineral resources at Pericles. The near-surface mineralisation now stands at 3.29 Mt at 2.0 g/t Au for 208,300 ounces.
Most of the drilling program used diamond core drilling, which was essential to understand the structural control of the multiple deposits at Menzies. Prior to the acquisition, only 22 drill holes deeper than 200 metres existed, KWR understands and evaluates a requirement of at least a 100 more deeper holes with depth more than 150 metres.
Must Read: Pericles Gold Resource Nearly Doubles at Menzies Gold Project
The drilling program intersected with very high gold mineralization in all the five deposits, they explored.
High grade mineralisation continues in the deeper sections of Lady Shenton underground workings
As per the archive data, which has been recently acquired by KWR, the Lady Shenton mineralisation corridor are open at depth also suggest the same for other historically mined deposits in the area.
Lady Shenton Gold pit produced over 191,000 ounces of Gold using 185,000 tonnes of ore at 32 grams per tonne gold grade.
The best mineralization was a 45m interval within the deepest level of the Lady Shenton Gold Mine from which 37 channel samples were collected yielding an average grade of 22.3g/t Au.
The UG channel samples are almost a century old, taken quite closely at every 2-3 metres distance confirms presence of over 20 grams per tonne mineralisation at Yunndaga and Lady Shenton deposits.
The channel samples also included 22 metres interval at a very high grade of 49.5 g/t. The archived data suggests a requirement of an extensive drilling program for the deeper sections of the deposit to potentially identify the high-grade gold intrusions in different deposits.
Secures $3.5 Million firm commitments to fund the future drilling program
The 3.5 million fundraise would be utilised for the exploration drilling activities at the Menzies Gold project targeting high-grade extensions to the existing mineralisation, and for the general working capital.
KWR has already received firm commitments worth $3.5 million via a placement of 21,212,121 ordinary shares at an issue price of $0.165 per share.
Next Drilling Program to commence in the Upcoming Weeks
Source: Kingwest Resources
The next drilling program has been scheduled to start in the upcoming weeks and would include over 12,000 metres of combined RC and diamond core drilling in the initial drilling plan. Successive follow-up drilling may be planned in future based on the outcomes from the initial drilling, which would focus on Yunndaga and Lady Shenton and the new targets from the aeromagnetic surveys.
Future drilling would be planned based on results from the forthcoming drilling program. The pre-mined high-grade deposits such as Yunndaga and Lady Shenton, as well as new targets identified in recent aeromagnetic surveys, would be considered as the priority targets for the upcoming program. A total of 4,000m of diamond core and 5,000m of RC has been planned for the known targets with a further 3,000 metres RC drilling at the new targets during H1,2020.
Major deposit across the historically mined underground regions spread over a few kilometres reveal the presence of high-grade gold mineralisation in the deeper sections.
The 15 kilometres strike length consists of multiple shear zones, all within the mineralised region, and given the high cost associated to the drilling programs, KWR aims to conduct drilling program at 100 to 200 metres depth at already identified high-grade mineralisation targets. A drilling program over the entire strike length would lead to huge capital cost for exploration activities, and any overruns might not be beneficial to the company.
To sum up: KWR seeks to explore and develop the Menzies, original large scale and the high-grade gold project will lead to high margin for the operations with little capital requirement due to the existing infrastructure.