Catch Sight of Kingwest’s Operational Highlights in 1H FY20

1H FY20 was certainly a prosperous half-year for the Australian miner and explorer, Kingwest Resources Limited (ASX:KWR), which made considerable development at its Menzies Gold Project (MGP) over the period. The Company has recently released its interim financial report for the half-year ended 31 December 2019, highlighting its key developments during the period.

Let’s gaze though these highlights at some length below:

Acquired MGP from Intermin Resources Limited

The Company finalized the acquisition of Western Australia’s major historic gold fields, Menzies Gold Project (MGP) from Intermin Resources Limited (now known as Horizon Minerals Limited) (ASX:HRZ) in September 2019. The Company acquired the MGP for a total consideration of $8 million in cash and shares that will be paid over a period of more than 18 months.

The acquisition resulted in the following changes in Company’s board and management:

• Mr Ed Turner took over the role of CEO,
• Mr Adrian Byass took over as Chairman,
• Mr Jon Price joined the Board as Non-Executive Director, and
• Mr Jonathan Downes also joined the Board as Non-Executive Director.

Completed 7,466m Inaugural Drill Program at MGP

A drilling programme incorporating 27 holes for 6,907.6 metres altogether consisting of 919 metres of RC and 5,989 metres of diamond core drilling, along with an additional nine RC pre collars for 558m at Lady Irene and Lady Shenton was completed at MGP.

The drilling programme turned out to be successful in attaining its objectives, including:

• High-grade gold intercepts drilled beneath previous workings at all prospects.
• Considerable new lodes discovered at Lady Shenton and Yunndaga.

As the Company has now successfully determined the position of high-grade shoots below the high-value mines, it will now focus on defining these lodes in a better way to form a resource for mine studies.

Summary of Drilling at MGP Prospects

1. Yunndaga

The Company completed drilling of 10 holes (KWD011 - KWD016, KWD031 - 034) for a total of 3,124 metres, which returned significant results:

• 2.28m @ 17.87g/t Au from 99.65m, inc. 1.20m @ 33.80g/t Au from 99.65m in KWD032 (new footwall lode beneath Princess May workings at Yunndaga).
• 1.3m @ 19.82g/t Au from 92.0m, inc. 0.3m @ 64.4g/t Au from 92.3m in KWD032 (in hanging wall of Princess May stope at Yunndaga).

As per the Company, the intersecting remnant mineralisation in the hanging wall of the stope is highly significant, which means there are likely to be more similar high-quality mineralisation remaining in the stope walls throughout the Princess May shoot, which need to be drill tested in 2020.

2. Selkirk

The Company finalized three holes (KWD001 – 003) for a total of 443.6 metres with high grade intersections in each of the holes, including:

• 3m @ 4.54g/t Au, inc. 1.14m @ 12.54g/t Au in KWD001.
• 2.3m @ 8.36g/t Au, inc. 0.78m @ 21.6g/t Au in KWD003.

3. Pericles

Seven holes were completed at Pericles (KWD004 – 010) for a total of 1,514.79 metres. Several high-grade intersections were reported, with the best being 0.93m @ 36.20g/t Au from 126.27m in KWD008.

Interesting Read A Breakthrough for Kingwest, Pericles Gold Resource Nearly Doubles at Menzies Gold Project

4. Lady Shenton

The Company completed four holes (KWD026 – 029) for 1,428 metres, along with seven RC pre collars for 408 metres (KWD020 – 025). The Company has planned drilling of the diamond core tails to these pre collars in 2020.

Despite deviating significantly to the south, KWD027 successfully targeted the down dip extension of the Lady Shenton lode and intersected 1.50m @ 14.33g/t Au from 291.5m, inc. 0.30m @ 71.3g/t Au from 292.1m. The Company notified that this hole seems to target the southern edge of the shoot and it will drill another hole in 2020 further to the north targeting the centre of the shoot.

Drill hole KWD027 also intersected a new lode to the west of the Lady Shenton lode: 2.90m @ 5.84g/t Au from 52.1m, inc. 0.30m @ 45.8g/t Au from 52.1m. This is likely to align with one of the Pericles lodes, which will be validated by a follow up drill test this year.

The 2019 drilling programme results validated the grade and widths of high-grade historic underground mining with identification of the thicker ‘plunging shoots’ now feasible.

Also Read Kingwest Makes Headway, Commenced Drilling at Menzies

Reassessing 2018 Feasibility Study for Goongarrie Lady

Kingwest is reassessing 2018 Feasibility Study for its Goongarrie Lady deposit, which returned a strongly encouraging result. The Company owns the Goongarrie Lady deposit, located on a granted Mining Lease, about 40km south of the MGP.

The Company is reviewing Feasibility Study amidst robust AUD gold price environment with an intention to partner/share risk in development via either asset sale or profit share development.

Review of Financial Performance

During the half-year, the Company completed a $4 million Placement to professional and sophisticated investors via issue of about 26.7 million ordinary shares at $0.15 per share to:

• pay the cash purchase consideration to Horizon for Stage 1, and
• fund the proposed exploration activities at the MGP.

Moreover, it issued about 2.5 million ordinary shares and 7.85 million unlisted options expiring 30 June 2022 to facilitators of the MGP acquisition.

Subsequent to the half-year, the Company also completed a Placement of $3.4 million to sophisticated and professional investors via issue of ~21.2 million ordinary shares at $0.165 per share, to fund exploration drilling at MGP. It also issued ~110.5k ordinary shares at a deemed issue price of $0.19 per share on 27^th February 2020.

To Know More, Read Miner and Explorer, Kingwest Resources Receives Strong Investor Support To Raise $3.5 Mn

As at 31 December 2019, the Company had ~$1.51 million in cash and reported a loss of ~$4.67 million for the half-year.

Simply put, Kingwest delivered a considerable operational performance in the half-year, observing significant developments at MGP. Moreover, the Company seems to be ideally positioned and well-financed to conduct further exploration at its flagship project.

KWR closed the trading session at $0.120 on 9^th March 2020.

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