Like Steven Bradbury on the final turn or Randy Orton pulling off an RKO, S2 Resources (ASX:S2R) came from out of nowhere to score the exploration coup the year in 2021.

Amid the crowd of companies eagerly awaiting the announcement of the winner of Australia’s most coveted exploration licence, S2 was lurking in the shadows.

The piece of land in question was a 394km2 block covering 55km of strike immediately next to Victoria’s Fosterville, one of Australia’s highest grade and largest gold mines.

Incredibly S2, a spin off several years ago from Mark Bennett’s $1.8 billion Sirius Resources after its takeover by IGO (ASX:IGO) in 2015, won the land dubbed Australia’s most wanted in October.

Canada’s Kirkland Lake, the owner of the 600,000-odd ounce a year Fosterville and now part of Agnico Eagle after a multi-billion dollar merger, received the three other blocks tendered in the Victorian Government release. But they were the consolation prize.

Block 4, the land picked up by S2, wraps around Fosterville and contains the north and south extensions of its structure and stratigraphy.

Total elephant country.

S2 and its esteemed chairman Dr Mark Bennett, known for winning two explorer of the year awards for the Thunderbox gold discovery with LionOre in 2002 and the Nova-Bollinger nickel discovery in 2012, will hope to find something similar to Fosterville’s Swan Zone discovery.

That orebody’s maiden resource came in at a ludicrous grade of 49.6g/t, something that has helped make Fosterville Australia’s cheapest pure gold mine by a country mile.

Find something remotely similar and S2, with their famed exploration team, could be on to a winner.


The winning bid

S2 has had a few guises since it was formed in the sale of the Nova mine to IGO.

The firm initially focused on the Baloo gold deposit at its Polar Bear project near Norseman before it was sold into Westgold’s (now Karora’s) Higginsville operations for $9 million to reinvest in exploration elsewhere.

With S2 farming out some of their frontier projects in Scandinavia to major North American partners Kinross and Rupert Resources, the resurgent Victorian Goldfields is emerging as one of its main focus areas.

With Kirkland Lake’s merger with Agnico Eagle it ironically makes S2 the Canadian giant’s neighbour in two jurisdictions. S2 owns ground abutting Agnico’s 250,000ozpa Kittila mine in Finland too.

Since winning the two-year long tender process S2’s ASX-listed shares have rerated from 9c to 19c, including a single session gain of over 90% on the day it was announced.

We spoke to S2 managing director Matthew Keane on the sidelines of the RIU Explorers Conference in Fremantle about how Greater Fosterville has changed the direction of the gold explorer.


The Fosterville tender, that was that was a pretty big story, I think you guys went up something like 90% in a day.

“We came off a low bar, so we had done a bit of drifting down, but you’re right, it was a nice, sharp rebound.”


So just how competitive was that tender for what a lot of people were calling the best exploration ground in Australia?

“I can only speak anecdotally. But you know, I have heard secondhand of a number of other companies, junior and major, particularly multibillion dollar companies who have missed out.

“So, you know, there could have been up to 30 or more companies in the mix. Some of those announced in their statements and a lot of the juniors for example, said, OK we’re in the process, but some were a bit more like us, incognito.

“But yeah, it was highly coveted ground, so we’re pretty lucky.

“And the reason being it’s prospective, it’s a mix of structure and stratigraphy and both of those north and south into our block. So it’s a block, which not only abuts but also surrounds the mine.”

Pic: S2 Resources


And in terms of saying that the structures run into it, obviously, the Swan Zone is next to you and they’re mining at something like 50g/t. That must be pretty inspiring for you to know that’s the sort of thing you’re looking to find on your ground?

“Yeah, absolutely. What’s really interesting is, so you’ve got the Swan Zone, and now Kirkland Lake is now Agnico of course after the takeover.

“There’s a parallel structure just further north which they’re drilling out called the Curie Zone, the Robinson-Curie Zone and that looks to be a similar repeat, the grade is getting better at depth.

“So there’s a decline heading there at the moment to start mining it but that’s certainly under investigation as well.

“And then if you jog forward again, effectively the same kilometre distance on another parallel structure there’s another known gold zone called Goornong South. So Goornong South is now in our block.

‘You know a sporting team who has a win, they keep winning, Eagles over Dockers maybe, because the Eagles have that culture of winning…’

“There’s a historic resource at surface, Kirkland Lake before they had to relinquish it did some drilling.

“They found the down dip continuity of that mineralisation, but really only put a few holes in it and didn’t get a chance to finish before they had to relinquish.

“So you know we’ve got the potential of the third repeat just sitting just north of the mine on our block. So that’s a great opportunity.

“Plus if you take that Curie Zone I spoke of, if you project that at the plunge angle that’s currently running at, it rears its head out in our block as well.

“The chances of (hitting) a Swan Zone, it’ll be what it’ll be, but you know we’re in the right environment, on the same structure, same strat, so we’ve got every chance.”


From my memory, you were planning to spend somewhere in the order of $10 million on exploration there, that was part of the tender process.

“So that’s a minimum commitment, $10.4m over five years, $2m in the first two years, but in reality we’ll just spend what we need to spend to make a discovery or head towards a discovery.

“So that’s I suppose the guideline, that’s a commitment we’ve made but we’ll spend what we need to.”


S2 Resources share price today:



It must have changed your prospects of raising money from investors who might be interested in a Fosterville style discovery.

“Right, I mean the obvious point is you open yourself up to a North American market who are really red hot on Victoria at the moment.

“Obviously, with Kirkland Lake and the Swan Zone discovery but also things like Fosterville South.

“So you’ve got a new investor base, but also the inherent Australian investor base is more enthused because you’ve got something which has got real near term prospects with effectively a world class mine just next door.

“But whether we go the market now, we’re pretty well funded, we’ve got $8m cash we’ve got that stake in Todd River, which is probably worth about $5m today.

“So we don’t need to go to the market, but I suppose we have that capability.”


I imagine once people heard you won the tender at Fosterville that they would have been ringing you up?

“There was a number of calls immediately, a number of new people on the register, so that is good.

“Some new institutions came on, and a little bit more reassurance for those guys who have been there longer term.

“So our shareholder base is a little bit quirky in that a lot of our sticky shareholders, funds and high net worths aren’t really there for any particular project.

“They’re there for this team and backing them. It’s the guys who made the Nova-Bollinger discovery, they discovered Thunderbox, Waterloo nickel, they’ve made so many discoveries it’s just really backing the team as opposed to one particular asset within that suite.


And that was going to be my next question. You brought up the team, you would have been an analyst I think at the time Nova was discovered?

“I actually covered it.”


What’s it like working with people like Mark? Are you getting insights into what it was about his exploration techniques that made him so successful with LionOre and Sirius?

“Yeah, absolutely. From my point of view, you take on a job you’re looking for the best possible outcome for yourself, and why not get into a team who’ve made so many discoveries and back the right horse, so to speak.

“Mark is an incredibly strong geologist, there’s no two ways about it, but it’s the team around him too.

“You know a sporting team who has a win, they keep winning, Eagles over Dockers maybe, because the Eagles have that culture of winning.

“And that’s what Sirius has. These guys know what it takes to make a discovery, they know how to do it and they’ve got the confidence to do it again.”


So you’ve had a few other projects, why haven’t they been the discovery before for S2?

“Baloo is actually a very good example. So we’re looking for a company maker, something that is going to project us to being that mid cap to a major resources company as obviously Nova-Bollinger did for Sirius.

“Baloo was a good discovery but probably never going to be a standalone mine, you’re not going to build a mill on it, but we monetised that pretty successfully to further our exploration.

“So we’re not looking for that small deposit, 10-15,000oz or whatever it may be. That’s not what we’re after.

“The key thing is we don’t fall in love with projects, we give them due exploration but we don’t fall in love. And we’re not going to pursue something which really doesn’t suit our market cap at the time or our funding capabilities.”


Finland, you told me earlier, that North American investment markets are probably a better fit for than an Australian company?

“Maybe, that’s for us to explore, we’re looking at options.

“Obviously, we’ve got a bit of a focus back on Australia now with Fosterville, but the options in front of us at Finland are we could do a spin out, we could do further farm outs, we could go it alone, there’s still plenty of options on the table. It’s really just a decision point for us.”