Pic: John W Banagan / Stone via Getty Images
Grace set to take centre stage when Paterson hits the boards
Mining
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Special Report: There is no doubting in Brian Thomas’ mind what the immediate priority for Paterson Resources (ASX:PSL) will be once the exploration company relists on the ASX, an event he is optimistic will take place before the end of June.
Thomas, currently a non-executive director who will take up an active management role upon the company’s re-listing, is a geologist and mineral economist with plenty of corporate advisory and finance experience.
When he first began with the company and started assessing its asset portfolio from a technical perspective, it was the Grace gold Project in Western Australia’s Paterson Province that stood out.
“Grace is the star for Paterson,” Thomas tells Stockhead. “We’ve said to the market and the people who have shown interest in taking up any shortfall from the rights issue that it will be our primary focus.”
Grace’s location makes it an obvious choice. The Paterson Province has arguably become the hottest exploration address in Australia following the discovery of the Winu copper deposit by Rio Tinto in late 2017 and the Havieron gold deposit by AIM-listed Greatland Gold shortly thereafter.
For Thomas though, there are other aspects that add to the project’s appeal, such as the existing inferred resource, which although small at 69,000 ounces is shallow and looks to be amenable to open pit mining.
Grace also has an exploration target of 64,000-117,000 ounces that could add further to the mining inventory and is within easy trucking distance of Newcrest’s giant Telfer gold operation.
“Assuming you can convert those resource ounces and some of the exploration target, it’s maybe 150-200,000 ounces. It’s outcropping and it’s 25km from Telfer,” Thomas says.
“At the very least, you can dig a pretty shallow hole and send the ore over to Telfer. As a fallback position, it’s pretty strong.”
Based on current reserves, Telfer runs out of ore in 2023. Newcrest has shown its determination to extend its life through recent farm-in deals with Greatland Gold on Havieron and Antipa Minerals (ASX:AZY) on its ground that surrounds the mine.
Deeper rewards on offer?
The Grace resource covers only a small portion of the >4km strike length that has been established, but this near surface, shear-hosted mineralisation is not the only string to the project’s bow.
The broader tenements cover 350sqkm. In his initial investigations, Thomas realised that despite several attempts by previous owners, no one had succeeded in unlocking the deeper potential within this package.
It is deep exploration in the Paterson that is considered most likely to lead to the discovery of another Telfer, which had a pre-mining endowment of 32 million ounces of gold and one million tonnes of copper.
“There’s some geophysics that tells us that there’s some targets there that have never really been fully tested,” Thomas says about Grace.
“The guys that we’ve had doing that geophysics work are very excited.”
Although it is in the hands of the ASX, Thomas anticipates Paterson relisting before the end of the financial year.
Provided that occurs, the company could be drilling at Grace by the end of September after completing the compilation of historic data and the reprocessing of geophysics.
Along with infill drilling to improve confidence in the existing resource and convert ounces from the exploration target, the opportunity will be taken to test some of the deeper targets generated by geophysics.
Sought after ground
Grace was owned by Newcrest up until the mid-2000s when the goldminer dropped a significant amount of its exploration ground around Telfer.
The province went through a period during which it was largely ignored by miners and exploration companies save for Rio striking a $60m farm-in agreement with Antipa over the Citadel project in 2015.
The discovery of Winu changed that with Rio, Fortescue Metals Group and a host of junior companies embarking on a pegging rush that has seen barely a square metre of ground in the region unclaimed.
Grace’s location and attributes including minimal cover have meant that Paterson has had to fend off enquiries about its availability from majors and juniors alike.
The company’s other assets include the Burraga copper-gold project in NSW’s Lachlan Fold Belt, four exploration licences prospective for gold and other minerals in the Pilbara and the Horseshoe South project in WA’s Murchison region.
