Black Cat sinks claws into eyewatering gold grades outside existing Paulsens mine plan
Black Cat’s Paulsens gold operation is already one of Australia’s highest grade deposits, but with drilling returning bonanza grade hits outside the current mine plan, there’s clearly room to grow.
It is hard to argue with extensional results such as 1.02m grading 234.35 grams per tonne (g/t) gold from 4.5m (PGGC23012), — which works out to 7.5oz+ per tonne — and 0.22m at 267g/t gold (PGGC23013) in the Main Zone within the lower part of the mine.
Black Cat Syndicate’s (ASX:BC8) grade control drilling within the current mine plan also returned high grades that continue to strongly outperform modelled grades, returning notable intercepts like:
While more drilling and analysis is no doubt required, the results indicate that the company’s current contained resource of 154,000oz gold at an average grade of 10.7g/t gold within the Main Zone might be conservative.
Anyone familiar with the history of the Main Zone is also unlikely to be surprised as drilling during its previous productive phase had consistently discovered new resources that replaced produced ounces, leading to historical production of about 1Moz of gold at about 1,000oz per vertical metre.
It also suggests that drilling is well on track to meet its goal of delivering near-term resource growth; aimed at increasing the initial 136,000oz base case production plan highlighted in the Paulsens Restart Study.
“Grade control drilling is targeting our priority mining areas. The bonanza assays we are seeing demonstrate the potential for Paulsens to both grow and outperform,” managing director Gareth Solly noted.
“Ongoing drilling is aimed at maximising cashflow and extending mine life with a strong focus on the Main Zone Extension.”
The Paulsens in the Pilbara is renowned for being the project that cornerstoned Northern Star Resources’ (ASX:NST) growth into one of Australia’s largest gold miners.
It was picked up by Black Cat – along with the even higher-grade Coyote mine in WA’s remote Tanami Desert – from Northern Star as part of a $44.5m deal last year.
In seven months of drilling, the company upgraded resources at Paulsens by 3.7 times to a meaty 328,000oz at 9.9g/t gold.
More importantly, it has discovered the Main Zone Extension that extends mineralisation by at least 175m and is not included within the Restart Study.
This is hugely significant as the Restart Study already outlines some very attractive numbers from the production of 136,000oz of gold over an initial three years.
Key takeaways are estimated revenue of $355.9m, an all-in sustaining cost of $1,892 per oz that’s at the bottom half of Australian producers, and operating cashflow of $81.2m.
Pre-production capex is a low $34.3m – with payback of just 14 months, this will be used to refurbish the existing, well maintained processing facility at the project.
Production can also be easily increased as the current plan leaves the processing plant with some 70,000t per annum, or about 15%, of spare capacity.
Besides the Main Zone Extension, Black Cat has other options for increasing resources and mine life.
These include Paulsens Repeat, a potential repetition of the same style system that is immediately adjacent and parallel, and the Paulsens East trend.
Drilling at the Gabbro Veins have also continued to deliver high grade gold hits while regional targets such as Belvedere and Mt Clement already have resources. There are also prospects that remain undrilled.
Black Cat is continuing its hunt for additional resources with ongoing drilling aimed at extending Main Zone resources.
Short-term drill targets include extensional drilling of stope designs in areas where mineralisation is not closed off as well as the up and down-plunge extensions to the Main Zone.
Ongoing drilling also targets the footwall, targeting additional Gabbro Veins and lateral extensions to already identified Gabbro Veins.
Additionally, the company will test for extensions along strike and up dip of the near-surface Apollo Lode to the north of the main underground working.
This article was developed in collaboration with Block Cat Syndicate, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.