Gold junior Kalamazoo Resources’ (ASX:KZR) share price rocketed as much as 45 per cent today after high-profile Canadian billionaire Eric Sprott and mid-cap gold explorer Novo Resources made a cornerstone investment in the company.

The investment came after Kalamazoo reported bonanza gold grades early in its maiden drilling program at its Castlemaine gold project in Victoria’s goldfields.

Highlights from drilling at the project included a 1.42m intersection grading 261.3 grams per tonne (g/t) gold from 100.32m.

A 0.17m section featured visible gold at a gobsmacking 1,916g/t.

To put that into perspective, anything over 5g/t is generally considered high-grade, and while there is no official definition for “bonanza” grade gold (just a way to describe speccy grades), that particular hit falls into that category.

The cash injection from Novo and Sprott, who is a director of Novo, is likely to power an expansion to exploration and drilling activities at Castlemaine and two other Victorian gold projects — South Muckleford and Tarnagulla Central.

Sprott is the former chairman of Kirkland Lake Gold (ASX:KLA) and familiar with the gold territory near Castlemaine as Kirkland’s high-grade profitable Fosterville gold mine is just 45km away.

Kalamazoo chairman and CEO Luke Reinehr told Stockhead he expected the investment would allow the company to “go harder and faster” with its growth strategy.

“It’s very exciting times — this transaction was completed very quickly and professionally and more importantly for us very positively for our shareholders,” he said.

Reinehr said the funds would allow the company to expand and accelerate its programs, including geophysical and geochemical work.

He noted the investments would support Kalamazoo’s efforts on the Castlemaine and South Muckleford goldfields that Sprott knew so well, through his outfit Kirkland Lake.

Shares were still up over 33 per cent around midday today.


In other ASX gold news today:

Element 25 (ASX:E25) has reached an agreement with the native title holder of its Mt Mulcahy gold and base metals project. The company said the agreement is a positive step for its possible sale of the project to Scorpion Minerals (ASX:SCN).

Kingston Resources (ASX:KSN) has found what looks to be a 16m zone of gold mineralisation during drilling at its Misima North prospect in Papua New Guinea. Diamond drilling at the prospect returned high-grade intersections such as 3.5m at 1.48g/t gold and 78g/t silver from 16.2m. The Misima gold project is already a 2.8-million-ounce deposit.

Mako Gold (ASX:MKG) is starting back up drilling at its Tchaga- Napié farm-in project in Côte d’Ivoire in about 10 days time. The 1,500m reverse circulation (RC) and diamond drilling campaign is testing mineralisation below wide zones, looking at the structure of mineralisation and following up a wide strike seen in the past. Mako owns 51 per cent of the project and is grabbing a bigger stake from owner Perseus Mining (ASX:PRU) subsidiary Occidental Gold SARL.

Yandal Resources (ASX:YRL) has pinpointed some high-priority targets in a 4km strike zone at its Barty prospect 2km south of mining tenements owned by Northern Star Resources (ASX:NST), near a haul road and the Bronzewing processing facility just 45km away. The company says the targets have been barely explored but have returned notable results such as 276 parts per billion gold.