Alto attracting interest again as exploration starts to reveal Sandstone’s true potential
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Alto Metals finds itself at the centre of corporate interest again as it continues to receive encouraging results from the intensive drilling program underway at its Sandstone Gold Project in Western Australia.
Company filings show that established gold miner Westgold Resources, which owns two mills within roughly 150km of Sandstone, spent $1.42 million buying Alto (ASX: AME) shares on market over the course of six days in late May and early June.
The purchases lifted Westgold’s interest in Alto from 8.58% to 12.10% and have fuelled speculation that Westgold is the latest party interested in taking full control of the highly prospective +900km2 Sandstone tenement package.
Over the course of about 18 months in 2019 and 2020, Alto was subject to takeover bids from no less than three separate entities: fellow ASX-listed explorer Middle Island Resources, Chinese-connected Goldsea Australia Mining and privately owned Habrok Mining.
All ultimately failed to gain any significant traction, with Habrok Mining’s the last to lapse in October last year.
Free from the unwanted distraction of having to defend against the bids, Alto managing director Matthew Bowles subsequently launched the largest drilling campaign undertaken by the company at Sandstone.
That campaign is still in progress and was recently expanded by 10,000m to 40,000m of reverse circulation drilling.
A maiden 3,000m diamond drilling program has also begun.
“Alto has already drilled more metres in 2021 than it has in any of the last five years and the rigs are still turning,” Bowles said.
More than 1.3 million ounces of gold has been produced from Sandstone since the 1890s, including from the shallow Lord Nelson and Lord Henry pits that lie 3km from each other in the south-east corner of the tenements.
However, past owners were only focused on the near surface oxide material and very little drilling has been undertaken below 100m depth.
Alto’s current campaign has initially focused on “low-hanging fruit” along the Lords Corridor – expanding on existing mineralisation through deeper drilling and identifying repeat gold lodes similar to the Lord Nelson deposit.
The company has had success on both fronts.
In June, hole SRC259 drilled below the Lord Henry pit returned 72m at 1.2 g/t gold from 60m including 12m at 5.1 g/t from 108m including 4m at 10.1 g/t gold from 112m.
Hole SRC259 was sunk 230m to the north of hole SRC252, which returned 12m at 6.1 g/t from 40m including 4m at 16.8 g/t gold from 40m in April.
The search for repeat lodes along the Lords Corridor started promisingly with the Orion discovery mid-last year, while the new Central Zone, further to the south of Orion, has now been defined over a 1km strike length and remains open.
Results from the Central Zone include 16m at 1.6 g/t gold from 116m including 4m at 5.3 g/t gold from 124m and 24m at 1.1 g/t from 88m including 8m at 2.6 g/t gold from 100m.
There is also plenty of untapped potential elsewhere on the Sandstone tenements.
The company reminded the market of this fact in mid-May when drilling at the Vanguard camp 8km from the Lords Corridor delivered an intercept of 12m @22.5 g/t gold from 40m including 4m @ 60.6 g/t Au from 40m.
Bowles sees the underexplored nature of Alto’s ground as a big part of its appeal to others.
“It is unusual for a company of our size to have such a dominant position on an entire greenstone belt and I have no doubt that is one of the reasons we’ve attracted the takeover interest,” he said.
Westgold emerged as a substantial holder in Alto at the start of April after picking up the stake held by Middle Island and purchasing more shares on-market.
Its intentions are not clear at this stage, but it has its two mills in the Murchison region, Tuckabianna and Bluebird, to keep optimised and Sandstone offers a potential source of feed for that purpose.
Along with its undeniable exploration potential, the project has existing indicated and inferred resources of 331,000 ounces at a grade of 1.7 g/t.
Alto is awaiting assays for 59 RC holes (~12,000m of drilling) targeting extensions to known mineralisation along the Lords Corridor and at Vanguard and from first-pass RC drilling at the Chance prospect.
Meanwhile, the company is forging ahead with the additional 10,000m of RC drilling and the 3,000m of diamond drilling along the Lords Corridor.
This story was developed in collaboration with Alto Metals, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.