Bellevue comes up trumps for Draig… and Tolga
Old mines have a habit of having a second, third or fourth wind. Even after 100 years of production.
And so it was with last year’s discovery of the high-grade Tribune lode by Draig Resources (ASX:DRG) just to the west of the shear zone at the old Bellevue gold mine near Leinster in Western Australia.
The historic Bellevue – it produced 800,000 oz at a rich 15 g/tonne gold between 1897 and 1997 – was acquired by Draig in 2016 on the suspicion that it had more to give, even if its exploration potential had been ignored for close to 20 years.
Draig originally planned to poke a few holes to test for new ore positions below the original mine which stopped at 450 metres. And it still does.
But before doing that it decided to drill some targets on the western side of the shear zone – a sand-covered area where it was previously assumed no gold would be found.
The gamble paid off, with Draig shares taking off in November in response to the first holes in the campaign returning shallow Bellevue-type hits of 5m grading 37.5 g/tonne gold and 5m at 16.5 g/tonne.
An additional three step-out holes since returned visible gold. Assay results from the latest holes, which extended the strike length of the Tribune lode to 500 metres, are imminent.
The run-up in Draig’s share price from 12c in November at the time of the Tribune discovery hole to 24c this week reflects Tribune’s potential to become another Bellevue.
Draig executive director Steve Parsons is backing home the idea that it could be. He spent $75,000 of his own hard-earned on December 28 to top up his shareholding.
He knows a bit about gold too. Before joining Draig, Parsons was managing director of the ASX-listed West African gold stock Gryphon Minerals.
Gryphon outlined a big gold resource which attracted the attention of Canada’s Teranga Gold. Teranga made Gryphon its own with a $100 milliom successful takeover bid in 2016.
Draig is to get busy in coming months with three drilling rigs due on site to begin a resource definition program.
Maiden resource not far off
So a maiden resource estimate for the Tribune lode is not far off.
While there is a lot of confirming work to do, future development options include the possibility of a standalone development, or having the Tribune’s high-grade ore toll treated at one of the many processing plants in the region.
Draig was one of many investment wins for Melbourne’s bustling mining investor Tolga Kumova last year.
In a perverse stroke of good luck, Kumova took up a 9 per cent stake in Draig in August at 5c a share when it raised $3.3 million to fund its Bellevue drilling program.
It was perverse because Kumova’s original investment was an act of revenge against nickel group Western Areas for not selling him some lithium assets elsewhere in WA that he thought they would.
Western Areas owns the old Cosmos nickel operation next door to Bellevue, with Cosmos having used an old pit on Draig’s leases for de-watering purposes.
It seems Kumova was harbouring thoughts of making life difficult for Western Areas as it sets about reviving Cosmos.
But Kumova was laughing it all off this week. He too is a believer in the potential for Tribune to be a new Bellevue.
He followed Parsons by topping up his holding in Draig earlier this month, pumping in another $1 million to take his holding to 12.08 per cent.
“When I saw Steve Parsons go and buy $75,000 worth of stock, I went and bought another million bucks worth myself,’’ Kumova told Garimpeiro.
“I know he knows his stuff when it comes to gold.’’
Kumova also made his own call on Tribune’s potential: “In my mind this thing has the potential to be one of the best gold deposits in Australia.’’