Extraordinary gold find at Beta Hunt bodes well for Western Lefroy JV
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Special report: Adjacent to Lefroy’s (ASX:LEX) Western Lefroy gold project is the world-class 15 million ounce St Ives gold camp, owned by major miner Gold Fields.
The St Ives camp surrounds the Beta Hunt underground mine, where operator RNC (TSX:RNX) recently discovered one of the “richest and most prolific gold veins ever found”.
In less than a week, a Canadian miner had unearthed more than 9000 ounces of gold from about 500m underground.
The new discovery included a 95kg stone containing about 2440oz of gold, and a 63kg stone containing about 1620oz of gold.
The haul was worth about $16 million — that equals half the market cap of RNC found in less than a week.
RNC was actually in the process of selling the mine, but now the cashed-up company has hit pause on that process and is kicking off an aggressive exploration campaign beneath Lake Lefroy on its lease holding.
Almost 700km of historic drilling has been done over the last 40 years, but not much was done 100m below contact where the gold is located, the miner told investors.
LEX’s ‘nearology’ advantage
This is excellent news for neighbouring explorers and land-holders – particularly the LEX/Gold Fields Western Lefroy joint venture.
The 372sqkm Western Lefroy joint venture tenements adjoin the Gold Fields tenements that make up the St Ives mining operation.
Gold Fields can earn up to a 70 per cent interest in the project by spending up to a total of $25 million on exploration within 6 years.
In a June research note, well respected geologist and analyst Chris Baker said this was a transformational deal for LEX.
“Gold Fields can spend up to $25m over a 6-year period on exploration aimed at discovering a new gold system that can provide feed to its 4.5mtpa [gold processing] plant,” he said.
“The success case would see LEX participate in 30 per cent of the resources, reserves, and production from any new discoveries.”
The deal also enables LEX to focus its exploration spend on its 100 per cent-owned Eastern Lefroy project.
During the September quarter Gold Fields kicked off a major program to capture ultra-detailed magnetic data across the project.
This major geophysical program will provide key data for drill target generation, with first drilling to commence at Western Lefroy in early 2019.
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