Barry FitzGerald: these two explorers aim to restore the high-grade Menzies goldfield to its former glory
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A successful strategy in recent times for investors has been to follow ASX-listed explorers looking to revive old and forgotten high-grade goldfields in WA.
Today’s interest though is where, and who, might be next. On that score, it is hard to go past the Menzies goldfield, 130km north of Kalgoorlie on the Goldfields Highway.
Menzies had its heyday in the 1890s. It then became an on-and-off producer from high-grade underground operations until the Second World War and had a second coming in the 1990s from open pit operations until gold prices crashed to $US278 an oz in 1999.
Nothing much has happened since, despite its high-grade production history from 440 known workings making Menzies one of the biggest and highest-grade gold producers in WA’s Eastern Goldfields.
Menzies has long been the sleepy town that people drove through to get to the big gold further north at places like Leonora, Laverton and Leinster.
Part of the problem has been the patchwork of small mining leases that covered the goldfield, originally a function of the proximity of the workings to the township, and the small holdings secured by hobbyist gold bugs over the years coming up from Kalgoorlie for the weekend.
But the consolidation of the ground in more recent years in to a scale more suited to modern exploration techniques means that there is no longer any excuse for Menzies not to recapture some of its former glory as a high-grade gold producer.
A pair of ASX juniors are leading the charge – Resources & Energy (ASX:REZ), trading at 4.3c for a market cap of $13m, and Kingwest Resources (ASX:KWR), trading at 26c for a market cap of $23m.
Through recent acquisitions the pair have pretty much tied up the goldfield, with REZ’s ground position to the east of the Menzies township on the Goldfields Highway, and Kingwest’s to the west.
The companies have not been messing around either. REZ has completed a maiden drilling program and has started another program (results should be available in 2-3 weeks), while Kingwest kicked off its maiden program on September 24.
REZ’s maiden program returned high-grade gold hits at the Goodenough prospect which is home to old shallow pits and two underground shafts.
The results included intersections assaying up to 9g/t gold with the results being fed in to an update of the existing resource estimate of 36,850oz at 2.08g/t gold. The mineralisation style is repeated at old workings along a 10km long corridor to the south.
REZ’s new drilling program is about 10km away at the Spion Kopp and Lady Kathleen/King Dam prospects in another of the five zones REZ has divided its tenement package in to, with each zone having a particular focus, including both historic high-grade mine targets and greenfield opportunities.
Both of the prospects have historic working and past drilling results with grades of more than 14g/t gold.
REZ has expanded its geology team for the Menzies effort, with a former Northern Star geologist specialising in turning near mine targets in to production assets the latest addition.
Across the highway, Kingwest’s initial focus is on five priority targets considered to have the potential for extensions of known high-grade shoots. Its exploration model also encompasses finding repeats of high-grade mineralisation.
Kingwest’s land package covers 15km along the Menzies shear zone which has seen limited modern-day exploration in the last 20 years.
The initial drilling program involves 26 holes for 6,500m and is expected to be completed before December.