Special Report: The Hemi gold discovery by De Grey Mining and its subsequent growth through 2020 meant many things to many people.

For De Grey (ASX:DEG), it was a company-maker. The share price rocketed from around 4.2c to as high as $1.60 as the results kept coming in from the Pilbara project, a long-neglected but prospective area for the yellow metal.

For near-neighbouring Golden State Mining (ASX:GSM), the discovery of Hemi was vindication that it was both operating in the right part of the world, and potentially on to something great.

“The Hemi discovery shone a spotlight on a long-forgotten part of the world where cover had masked most of the opportunities,” Golden State managing director Mike Moore told Stockhead.

“Some might have thought we were mad for being there, but for someone else to make a meaningful discovery, it really justified our reasoning.

“Now they’re probably thinking we were rather shrewd.”

Golden State holds the Yule project 13km to the south of Hemi and has spent much of 2020 exploring this project – ground originally pegged by famous prospector Graham Hutton – hitting gold in every round drilled under the guidance of exploration manager Geoff Willetts.

The market was hot for Golden State through the year – the company raised $2.2 million in May and its share price almost hit 70c based largely on De Grey’s success in July, before retreating back to around 18c currently.

The company is yet to hit that big discovery hole at Yule – but the fundamentals remain strong and the plans into 2021 are equally so.

Given the nature of deposits in the region, which are typically hidden under a layer of alluvial cover, Golden State Mining has tapped the expertise of the same drilling company used by De Grey during its exploration work in 2020.

“As a company we won’t jump on our pedestal and champion a discovery until we’ve actually made one,” Moore said.

“When people look at us, they can be sure they’re getting a non-promoted version of the truth – we’re not going to dress something up unless we absolutely believe in it.

“At Yule, we haven’t yet made a discovery but we have a heap of very good indicators, and we’re doing some really great work in the background with some well-regarded consultants.

“Hemi took 15 years to find. We’re 10 solid months in at Yule and we’re working with some great signs.”

GSM Yule
The Yule project in the Pilbara. Pic: Supplied.

Yule has been the main focus for GSM in 2020, for obvious reasons, but progress was also made at the Cue gold project in WA’s Murchison region late in 2020 when the mining of remnant tailings and stockpiles kicked off under an equal profit share arrangement with Adaman Resources.

The year ahead

On the back of everything it’s learned over the course of the year at Yule, Golden State is now working on its targeting – pulling together information from two programs of drilling, reviewing all data, and bringing in consultants.

Part of that information set will be sourced from an aeromagnetic dataset acquired from Core Geophysics which mapped a significant portion of the region way back in 2006.

The company intends for this process of combining information to help delineate accurate targets at Yule, with the intention of carrying out multiple phases of drilling into 2021

“We’ll be upping the ante, moving to RC and then planning towards diamond holes at some point into the targets at Yule,” Moore said.

“With every round of drilling there so far we’ve encountered gold. Given the actual targets we’re chasing are undercover, we’ve achieved a great deal, and next year is going to be a huge year as we follow up and refine those targets and start to put some RC into the area.”

The Murchison project has not been forgotten – Moore said there was potential for more drilling at Cuddingwarra in 2021 depending on the metrics.

“It’s a region with a lot of promise, if we consider the likes of Musgrave Minerals (ASX:MGV), Evolution Mining (ASX:EVN) and their JVs with Enterprise Metals (ASX:ENT) and Musgrave – there’s plenty to be excited about in the Murchison too,” he said.

The company also holds prospective ground at its Four Mile Well project in the Eastern Goldfields.

But it’s most likely that 2021, like 2020, will be much about the Pilbara for Golden State.

“We’re feel we’re just lifting the lid on Yule’s potential,” Moore said.

Stay tuned.

This article was developed in collaboration with Golden State Mining, 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.