In a considerable achievement, mining and exploration firm, Kingwest Resources Limited (ASX:KWR) has commenced 8,300m drilling programme at its flagship Menzies Gold Project (MGP), one of the highest-grade and significant scale Australian gold fields.
Located 130km to the north of Super Pit in the Goldfields of Western Australia, Menzies has recorded historic production of over 800,000 oz gold at 19 g/t Au, which includes 650,000 oz gold at 22.5 g/t Au from underground prior to 1950 and 150,000 oz @ 2.6g/t Au from open cuts in the 1990’s.
Commenced Drilling at Menzies
The recently commenced drilling programme at the MGP includes:
- 3,600m of RC (Reverse Circulation); and
- 4,700m of diamond core targeted at infill and extensions to high-grade mineralisation within the prospects - Yunndaga, Lady Shenton and First Hit Systems.
Kingwest notified that initially, the exploration drilling activities at MGP will be focused on high-grade extensions to the current known mineralisation within the prospects - Yunndaga, Lady Shenton and First Hit Systems. All these prospects lie within the Menzies Mineralised Corridor, and extend over lengths of between 1,200 and 1,800m each (see figure below).
These mineralised systems also contain multiple shear zones hosting high-grade gold deposits. The Company has planned to conduct RC drilling at these systems firstly as it will utilise some of RC drilling as pre-collars for the diamond core tails.
The diamond core drilling is expected to be undertaken in late March 2020. The Company will plan additional follow up resource definition drilling on the basis of results from these initial programmes.
Drilling Contractor “Challenge Drilling” Engaged for RC Drilling
In early February, Kingwest informed that it has engaged Kalgoorlie based drilling contractor, Challenge Drilling to carry out RC drilling at its MGP. After recording the widespread and high-grade gold mineralisation at Menzies below old workings and in the deepest drilling to date, the Company planned to conduct RC drilling to extend these mineralised zones at depth.
The Company planned RC drilling for relatively shallow infill (less than 250m downhole) and RC precollars for deeper diamond drill holes, to test the Yunndaga and Lady Shenton lodes as priorities in addition to other targets.
In February this year, the Company confirmed that very high-quality gold mineralisation remains open at depth at the lowest levels of the Lady Shenton and Yunndaga underground workings. The following assays were reported from face samples taken along development drives and rises at Yunndaga and Lady Shenton:
Announced Placement to Fund Exploration Drilling Activities
To fund exploration drilling activities at the MGP targeting high-grade extensions to the existing known mineralisation, the Company has recently announced a placement of about 21.21 million ordinary shares at an issue price of $0.165 per share to raise around $3.5 million (before costs).
The Company received firm commitments from professional and sophisticated investors for the placement, whose joint lead managers were Cannacord Genuity (Australia) Limited and Peloton Capital Pty Ltd.
The Company especially welcomed the support of a major North American precious metals investment fund, which raised its stake above pro rata in raising this capital.
In a nutshell, the Company seems to be well-positioned to finance ongoing and planned exploration drilling activities at its flagship MGP, backed by strong support from sophisticated and institutional investors.
KWR closed the trading session at $0.150 on 4th March 2020 with a rise of 7.14 per cent whereas it remained flat on 5th March 2020.