Great Southern (ASX:GSN), which now holds a commanding chunk of the gold-rich Duketon greenstone belt in WA, believes the significance of its recent ‘Golden Star’ acquisition has been missed by investors.

It’s no secret that major miner Regis must find a “big whale” gold deposit in the next three to six years to keep its Western Australian mills full.

The foundations of its existing ore supply at Duketon, near Laverton in WA, appear to be reaching their end of life, S&P Global said last year.

Managing director Jim Beyer said Regis – which controls almost 90 per cent of the gold rich Duketon greenstone — is “chasing a 1 million- or 2-million-ounce deposit that gives a significant extension of life.”

Regis allocated $35 million for exploration in fiscal 2021, he said.

In August last year Regis also acquired the 290,000oz Ben Hur deposit to add life to its operations.

But following the Ben Hur transaction, “there are not a lot of bolt-on opportunities inorganically” in the region, Canaccord Genuity analyst Tim McCormack said.

“There’s no company sitting out there with a big asset that’s a logical fix for what is a bulk tonnage operation,” he said.

Which puts Great Southern Mining in a very good spot.

Like Regis, Great Southern believes there are multimillion ounce monsters to be found here.

Following a number of targeted acquisitions over the past year it now holds the other ~10 per cent of the Duketon Belt:

GSN Duketon belt
Great Southern ground (orange and yellow) is surrounded by a number of large gold mines and processing plants owned by Regis Resources.

“The quality and size of this 459sqkm landholding, and the amount of historical data is phenomenal,” Great Southern chief exec Sean Gregory says.

“We have 11,000 historic drill holes and 24,0000 soil samples which give us such a huge head start on exploration up and down that belt.”

Regis are showing a lot of faith in the Duketon belt with their big exploration spend, he says.

“They would also love to see us make a discovery – it enhances the prospectivity of the belt and increases the opportunity to work together to realise the value from that discovery.”

Bigger than Ben Hur

The heart of Great Southern’s latest Duketon acquisition is the Golden Star deposit, which is 4km along strike from the Ben Hur deposit and 32km south of Regis’ Garden Well mill.

It will be a key focus for the company going forward.

Drilling by Duketon Mining in 2017-18 – which pulled up results like 15m grading 6.5 grams per tonne (g/t) gold and 34m at 2.3g/t — shows the deposit is at least 600m long and open in all directions.

This is a potential gamechanger, Gregory says.

“Our plan is to go and do some drilling at Golden Star in the next quarter to expand the footprint of that deposit.

“Also, within the deposit there are some higher-grade zones that we would like to target as well.”

While enough historic drilling has been done to estimate an initial resource, Gregory says there is no point right now because “we know that number is not going to be representative of what it could be”.

“Let’s go and do some drilling to find the edges of this thing,” he says.

Gregory believes the significance of this acquisition has been missed by the wider market.

“I very much believe that this is a material acquisition for the company.”

During the upcoming program Great Southern will also look to drill some exciting greenfields targets.

“We are just finalising those plans now. On both fronts, I think it is going to be a really good drilling program for the company,” Gregory says.

“One – we are going to get some good gold hits at Golden Star which is going to make that story ‘more real’ for people. We haven’t found the edges of this thing yet.

“Two, there is also going to be an opportunity to ‘discover a whale’ when we drill some of the more greenfields targets in our Duketon Belt tenure.”

Near term mining at Mon Ami

There are numerous gold mills in the region crying out for more feed.

Toll treating – or processing ore at another company’s mill for a fee – is perfect for gold deposits too small to justify their own large-scale plant development.

Enter Great Southern’s 59,000oz Mon Ami gold project, which could help fund Great Southern’s hunt for a game changing discovery.

The simple, open pittable deposit is only 10km from an underutilised mill, and close to many other mills in the region.

“While our focus is on bigger exploration, for a pretty nominal investment we can get mining approvals in place for that project,” Gregory says.

“For the big, aging operations around us it is an absolute no-brainer to gather up any nearby feed. For us, that’s exactly what this opportunity is.

“We are well and truly on track to achieve a shovel-ready, fully permitted project well within the 2021 calendar year.”

The Mon Ami open pit could be a useful source of cash, but it isn’t a company maker.

In saying that, the exploration potential at Mon Ami is still open, which Great Southern demonstrated with its most recent drilling.

Great Southern had an intercept last year – 2m at 27g/t – which opened its eyes to Mon Ami’s underground potential.

“We decided to put two holes in at depth to follow up,” Gregory says.

“One of them was actually 100m down plunge from that 27g/t intersection, a serious step out.

“We hit 5m at 5.2g/t gold.

“If you join the dots between the two intersections, there’s real potential for those resources to continue at depth.”

So far, Mon Ami is looking not dissimilar to the nearby Ida H deposit, which started as a small open pit and ended up producing 172,000oz at 22.6 g/t down to 480m in the early 1900s.

“It had a very similar surface expression with an open pitresource at surface but then had an extraordinarily rich taproot to it,” Gregory says.

“Mon Ami is on our radar for near term production, that doesn’t rule out the large exploration potential.” 

North Queensland: Frontier exploration

If Great Southern’s Laverton ground represents an opportunity to make a big discovery, the North Queensland opportunity is bigger still.

“Some of the deposits up along that belt are massive: 2moz, 3moz, 8moz,” Gregory says.

“That’s the sort of opportunity that North Queensland presents.

“Such a huge landholding, so much ground to cover, so much opportunity for big discoveries.”

In 2020, Great Southern completed a co-funded hyperspectral survey with Evolution Mining which identified large 19 targets.

“We have completed soil surveys over five of those targets, and we will soon be updating the market on those results which are really encouraging,” Gregory says.

“Over the next week or two we will be ramping up our field activities again to get out and ‘ground truth’ those anomalies.

“The objective is to progress those targets through the pipeline, and to ultimately drill them.

“The plan is to drill the best of those targets this year.”

This article was developed in collaboration with Great Southern 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.