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Forgotten but not gone.

That’s one way of describing Ausgold, a WA gold explorer with a unique project set in sheep paddocks, and a double connection to one of Australia’s best recent gold discoveries.

For much of the past decade Ausgold (ASX:AUC) has been quietly beavering away at its Katanning gold project located 300km south-east of Perth, a place better known for sheep studs and wheat farms.

Gold, however, is not totally foreign to the region. Oldtimers picked up nuggets more than a century ago before being lured (along with most farm hands) to the rich gold discoveries near Kalgoorlie.

As recently as the mid-1990s a small mine called Jinkas was operated by Otter Exploration, recovering around 20,000 ounces of gold – only to be closed after the gold price collapsed when Britain sold much of its gold, an exit which knocked the price down to less than $US300 an ounce.

Ausgold’s theory is that Jinkas, and a number of other gold deposits in the region, are part of a common, elongated, geological feature which is the sixth and western-most of a series major gold-bearing structures that include the Kalgoorlie, Laverton and Yamarna gold provinces belts.

Of those, Yamarna is the parallel which management at Ausgold likes to use as a reason for investors to take a closer look at what’s happening at Katanning, both because of the north-to-south trend of the geology and the success of Gold Road Resources, a company which once looked a bit like Ausgold – small and working in under-explored country.

As recently as four years ago Gold Road was a true “penny dreadful” trading at 4c a share as it explored the Yamarna region’s semi-desert that is closer to the South Australian border than Perth, a region long-regarded as too isolated, inhospitable and lacking much in the way of rocky surface outcrops to aid explorers.

Through sheer persistence Gold Road made what is now the Gruyere discovery that lies at the heart of a joint venture with South African mining major, Gold Fields. Their deal has been a factor in Gold Road rocketing up from a market value of $20 million to $610 million since mid-2013.

Money and geology are the parallels that connect Ausgold with Gold Road because Ausgold does look somewhat like Gold Road of four years ago complete with a lowly share price of 3c, a stock market value of $12 million, and an exploration project which is off the beaten track.

Differences, at first glance, are more obvious than the parallels because while Gold Road is working in the true outback, with passing emus for company, Ausgold is working in sheep paddocks which, at this time of the year, are a lush green.

The job Ausgold has set itself is not an easy one. But it has attracted a loyal band of investors, many who have followed the company’s well-connected chairman, Richard Lockwood, from his time as a prominent London stockbroker with firms such as Hoare Govett. Ausgold has also formed a strong relationship with another explorer, Chalice Gold.

The recent appointment of a new managing director in Matthew Greentree, plus the award of a small government grant to help fund a fresh round of drilling at Katanning should see Ausgold, start to develop traction and generate news flow which has been lacking recently.

One of the challenges facing the company is knowing where to start with a project that has found gold along 17 km of strike stretching to the north and south of the original Jinkas pit, which could be amenable to a production re-start by cutting back the old pit walls to reach an estimated 315,000 oz of gold in 6.75 million tonnes of ore grading 1.45 grams a tonne.

In total, Ausgold’s Katanning project (as currently understood) contains 785,00 oz of gold, but in multiple locations, which is another interesting parallel with Gold Road’s Yamarna project before it focused in on Gruyere with a well-heeled partner to get the cash flowing in rather than out.

Ausgold, potentially, has a tiger by the tail.

There is ample evidence of gold in the south-west of WA, which was proved conclusively by the bauxite-miner and alumina producer, Alcoa, when it discovered (by accident) the world-class Boddington goldmine now operated by the US gold giant, Newmont.

Reasons for not looking closer at the south-west corner of WA include the issues of alternative land use, mainly farming and forestry, which can raise political and environmental obstacles.

Ausgold’s Katanning project is not burdened by land access issues because most local farmers welcome the prospect of an additional source of income.

The trick now for Ausgold is to do what Gold Road did, find a deposit big enough to justify a start on development while continuing to explorer a large tenement holding, a process which could see the stock significantly re-rated.