Highlights 

• Alchemy Resources’ first-half report boasts a flurry of developments at its high-grade diversified mineral project portfolio
• The Company undertook a high-resolution magnetic survey over multiple targets across the Karonie Gold Project.
• A government grant of AU$111,300 was secured for drilling operations over two target areas on the Karonie Project.
• During H1, Alchemy raised AU$3.1 million in a capital raising program.

Australian mineral explorer Alchemy Resources Limited (ASX:ALY) is in a fine fettle, marking a half-year of encouraging developments across its project portfolio. The period ended 31 December 2021 saw encouraging outcomes from exploration across the Karonie Gold Project in Western Australia. Moreover, the Company made significant developments at the Lake Rebecca Project, Lachlan Projects, and Bryah Basin Project.

Let us explore the recent activities that are boosting the Company’s exploration journey across its highly prospective assets. 

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Encouraging exploration outcomes for Karonie Gold Project

The Karonie Gold Project, covering an area of 1,252km², comprises 15 exploration licences including three licence applications.

The first-half period witnessed the completion of two key Heritage Surveys including detailed archaeological and ethnographic surveys with no areas of significance discovered. The objective was to evaluate potential exploration areas at the Karonie East, Western Brown, Gilmore, Esplanade, and Challenger targets. The areas were found to be clear.

Prospects and major structures at Karonie Project (Image source: Company update, 2 February 2022)

A high-resolution aerial magnetic survey was conducted over the key targets at the Karonie tenement. The magnetic survey was designed to improve Alchemy's gold exploration drill targeting in existing locations while also generating new ones.

A drilling program was kickstarted at the Karonie East prospect post the reported period in early 2022.

Related Read: Alchemy Resources (ASX:ALY) discovers two gold systems at Karonie East

Alchemy secures government grant

The Department of Mines, Industry Regulation and Safety gave a go ahead to the Company’s proposal for an Exploration Incentive Scheme (EIS) financing grant of up to A$111,300 for its Western Brown and Gilmore target areas on the Karonie Project.

The purpose of the grant is to encourage innovative exploration drilling in greenfield and under-explored areas of the State.

Alchemy believes that the potential for short strike length but high-grade structures in the area has not been tested adequately. The EIS grant validates the Company’s belief and will aid in fast-tracking the exploration operations.

Related read: Alchemy Resources (ASX:ALY) reports visible gold at Karonie Project              

Lake Rebecca Project makes headway

The Lake Rebecca Project consists of 11 extremely promising exploration licence applications covering 562km².

During the reported period, the Company won ballots for three significant exploration licence applications - E28/3048, E28/3053, and E28/3058. The new licences encompass 51km² and are located 140km to the east of Kalgoorlie, in a highly advantageous geological position along the Claypan Shear, adjacent to Breaker Resources’ (ASX:BRB) 1.7Moz Bombora gold deposit to the south and St Barbara (ASX:SBM) to the north.

Map of Lake Rebecca tenement (Image source: Company update, 16 March 2022)

Related read: Alchemy Resources (ASX:ALY) looks to work with new JV partner on Lachlan Projects

Lake Rebecca Project is surrounded by major projects, including Carosue Dam (Northern Star Resources), Bombora Gold Deposit (Breaker Resources) and the Rebecca, Duchess & Duke deposits of Ramelius Resources.

Cobar Basin Projects

Alchemy operates the Cobar Basin Projects in a joint venture with Heron Resources. The Company holds an 80% interest in the Cobar Basin Projects in New South Wales.

The projects lie in the prolific Lachlan Fold Belt and consist of four assets- Overflow Gold-Base Metal Project, Yellow Mountain Copper-Gold Project, West Lynn Nickel-Cobalt-Alumina Project, and the Eurow Copper-Gold Project. Each of the above-mentioned projects contains multiple drill-ready targets for gold, base metals, and nickel-cobalt.

The reported period saw the commencement of a heritage survey on the Yellow Mountain Mine prospect, completed in early 2022. A final report is awaited.

Related read: Alchemy Resources’ (ASX:ALY) December quarter sees major progress across multiple projects

Bryah Basin Project

The Bryah Basin Project is spread over an area of 488km². Through farm-in and joint venture agreements with Sandfire and Billabong Gold Pty Ltd, Alchemy retains a 10% to 20% interest in the base metal and gold-rich project.

Alchemy retains a 1% Net Smelter Royalty over 20,000oz of gold extracted from the Hermes Deposit. The royalty payment will start once production reaches 70,000oz.

At the Peak Hill North Prospect, 244 aircore holes were drilled for a total of 13,893m during the reported period. These holes were initially drilled in an 800 x 100m pattern to provide high-quality litho-geochemical data as well as critical geological information for stratigraphy delineation at Peak Hill North.

At Peak Hill, a three-line IP survey was conducted over the area of geological interest and the survey results are awaited.  

Related read: Inside Alchemy Resources’ quest to unlock value from diversified mineral assets

Financial position

Alchemy raised capital during the first half, completing a placement to raise AU$1,848,669. This was followed by a significantly oversubscribed pro-rata non-renounceable 1 for 6 entitlement offer, which raised AU$1,232,448.

The proceeds raised are planned to be used for funding exploration drilling at the Karonie Gold Project, Lake Rebecca AC drilling and focused geophysics, and RC and Diamond Core drilling at Yellow Mountain and Overflow Gold/Base Metals Projects.

ALY shares traded at AU$0.013 on 21 March 2022.