Iron ore, lithium? The Pilbara’s also a top gold exploration address for these small caps
Better known for its giant iron ore mines and more recent lithium production, the Pilbara is gradually emerging as one of Australia’s most active gold provinces.
While there were historic gold rushes in the 1880s it was really only when the conglomerate gold story started making its rounds in late 2017 that interest in the Pilbara as a gold exploration region really started.
“While that (conglomerate gold) hasn’t got as far as some people might have thought, it certainly brought attention to the Pilbara and allowed a lot of money to be raised,” Calidus Resources (ASX:CAI) managing director David Reeves told Stockhead.
Rather, it is the more conventional, greenstone Archean geology that has been defined by companies such as De Grey Mining (ASX:DEG), Kairos Minerals (ASX:KAI), Calidus and Mark Creasy-backed Coziron Resources (ASX:CZR) that hosts the majority of the gold ounces defined to date.
And more recently, De Grey’s and Coziron’s respective Hemi and Top Camp discoveries in the Mallina Basin that have really got the hearts of explorers pumping.
Initial drilling at Hemi returned a top result of 12m grading 9 grams per tonne (g/t) gold within a broader 43m zone grading 3.7g/t gold, just 36m from surface.
Meanwhile, the Top Camp prospect rewarded Coziron with an 8m intercept grading 10.2g/t gold that included a 1m intersection at 66.1g/t gold.
Investors have certainly rewarded De Grey, with its shares still up 275 per cent from the beginning of this year despite the widespread market panic brought about by the COVID-19 pandemic.
De Grey technical director Andy Beckwith says the discovery of the high-grade Hemi discovery opened up a new style of mineralisation that nobody had found there before.
“The dimensions that we are discovering at Hemi are just phenomenal and it just gives you so much more incentive to keep exploring,” he told Stockhead.
Beckwith added the discovery highlighted the fact that by modern standards, the whole Pilbara was still largely unexplored and that the upside potential was “obviously in front of us”.
Hemi also backs up the company’s belief that the Mallina Basin is a large and highly prospective gold province that could yield multi-million ounce gold deposits after dedicated and systemic exploration like the Yandal Belt and the Yamarna Belt.
And this dream might not be too far off, De Grey has already defined a 1.7-million-ounce (Moz) resource, which is expected to be boosted by Hemi and its other new discoveries such as Antwerp.
Calidus, meanwhile, is angling to start development of its 1.25Moz Warrawoona gold deposit this year.
Golden State Mining (ASX:GSM) managing director Mike Moore also believes that the Hemi discovery has demonstrated that the region had a major structural framework in a fertile Archaean basin with the ability to host significant gold mineralisation.
The under-explored nature of the Pilbara is also a drawcard for Kairos managing director Terry Topping, who believes that it would surprise people with the different types of mineralisation that is present.
“It is still early days for a lot of exploration, and I like working in areas like that where you can be a bit of a first mover,” he said.
That most of the orebodies appear to be near surface just adds to the attraction.
Another factor that plays a key role in the increased gold activity in the Pilbara is the ready access to infrastructure.
While the region used to be considered a high-cost area that was difficult to access, Calidus’ Reeves says that with the iron ore boom, this has changed dramatically.
“It is on par with the Goldfields, if not better, on a cost basis,” he explained.
Highlighting this, mobile coverage is available over most of De Grey’s tenements while the mining town of Port Hedland is less than an hour by bitumen road.
So just what plans do some of the players in the Pilbara have up their sleeves?
Calidus is focusing its attention this year on advancing its Warrawoona project towards production, with a definitive feasibility study due for completion in the December quarter.
However, it is also starting a regional exploration program in May this year.
“We are flying detailed aeromagnetic and radiometric surveys and on the back of the other soil sampling we have done, we will start to target our regional exploration programs,” Reeves said.
“We have 180sqkm of tenure, so we need to get started on that and we have only really been focused on 5sqkm so far.”
Golden State is preparing to carry out a +4,000m, five-target drilling program at Yule South just 15km from the Hemi discovery in April.
Moore previously noted that these targets displayed some ‘geological similarities’ to Hemi.
He added that the company had a strategic tenement position with 702sqkm of granted and applied for ground in a region with established credentials as a gold exploration destination.
Hemi has also been an inspiration for Kairos, with Topping saying that it had changed some of the company’s thinking on areas that might now be prospective for that style of mineralisation.
“It has sort of given us target areas where we need to go investigate that we wouldn’t have ordinarily gone,” he said.
Kairos is planning to start field activities again next week.
It will also be looking to drill several targets that it wasn’t able to test last year due to the onset of the wet season.
One target that excites Topping is the Fuego prospect within the Hardy Formation, where visible gold was observed in stream sediment sampling.
“It is a very large target, structurally related but could also be an unusual style as well from what we have seen,” he said.
Meanwhile, De Grey has three rigs on the ground progressing exploration at Hemi and defining mineralised trends for later follow-up.
Recent drilling at the Brolga Zone hit what the company described as “some of the best discovery intersections” of 93m grading 3.3g/t gold and extended gold mineralisation with notable results of 18m at 2.3g/t gold, 16m at 2.6g/t and 13m at 1.9g/t.
Beckwith notes that exploration at Hemi is still at the early stages and that while the company is still unclear about its exact nature, what it has uncovered to date indicates that it is substantially different from what it had previously chased.
“We obviously still have a lot of work to finalise what the resource looks like. It is early days for us and we are rapidly learning,” he added.
“Hemi is what every exploration geologist gets out of bed for, that is what they are striving for every day.”