Did Kairos just reignite the Pilbara gold nugget story?
Mining & Resources
The head of Kairos Minerals is hoping the company’s big nugget discovery in Western Australia’s Pilbara region will show just how rich the area is and reignite excitement around the conglomerate gold story.
Kairos (ASX:KAI) impressed the market yesterday when it revealed it had found 256 gold nuggets during metal detecting of a small area of 150m by 50m at its Croydon project.
The nuggets have the hallmark “watermelon seed” shape and texture that became a hot topic in July last year when two other Pilbara gold explorers – Artemis Resources (ASX:ARV) and Canadian partner Novo Resources – picked up some at their Purdy’s Reward project near Karratha.
This was later determined to be conglomerate gold – nuggets hosted in rock containing rounded grey quartz pebbles and other minerals.
The world’s most productive gold region, South Africa’s Witwatersrand Basin, is famous for its similar geological formation.
And Kairos’s discovery was made 140km away from Purdy’s Reward project.
“I think it really should add the idea that there’s a horizon out there containing gold that’s spread throughout the Pilbara,” chairman Terry Topping told Stockhead.
“This just adds more weight to that story and therefore it’s not just good for us, it’s good for anybody with that horizon in the Pilbara.
“We’ve seen other companies in the past find gold in it. We’re sort of in a central location, but we’re still 140km away from Purdy’s – the Novo ground – which is a long way. And to find the same sort of style of gold in the same horizon is really interesting.”
The excitement surrounding the Pilbara conglomerate gold story has died down somewhat, but Mr Topping is hoping Kairos’s news will bring the spotlight back to the Pilbara
“I’m sort of hoping it helps reignite a bit of interest in it because there was a lot this time last year and I think for various reasons it has sort of gone off the boil,” he said.
“But not from our point of view. We’ve always had a belief in it and I think when you can find new areas and nugget patches where we have I think that’s a great start.”
Kairos is backed by renowned billionaire investor Eric Sprott and the new find has prompted speculation about whether his investment fund would be keen to take a greater chunk of Kairos.
“That’s always a bit hard because that’s their call,” Mr Topping told Stockhead.
“But it’s fair to say that we’ve got substantial funds with $6.5 million at the end of last quarter, so we’ve still got a lot of what they put in to get stuck in and do the work.
“From an investment point of view we want to make sure that we give them a good return on their investment and the rest of the shareholders. Eric has got 16 per cent I think so it’s already a substantial amount.”
Last month Stockhead columnist Barry FitzGerald reported the boss of ASX-listed Kirkland Lake Gold (ASX:KLA) as saying the gold industry could be turned “upside down” if the Pilbara delivers on its conglomerate gold potential.
Kirkland’s exposure is through its 18 per cent stake in Novo.
Kairos’ find is good news for other explorers looking to prove up the conglomerate gold potential of their respective patches of land.
Coziron Resources (ASX:CZR) is in the process of assessing the prospectivity for gold from the conglomerates within its Croydon Top Camp project in the North Pilbara.
The company is acquiring a 70 per cent interest in the 317 sq km project, which is located about 100km south-east of Karratha, from the Creasy Group.
West Wits Mining (ASX:WWI), meanwhile, is working towards a restart of small scale mining at its Tambina project in the Pilbara this year.
The company is the only ASX-listed junior to have landholdings with conglomerate-hosted gold in both South Africa’s Witwatersrand Basin and the Pilbara.
De Grey Mining (ASX:DEG) has three advanced conglomerate gold targets it is exploring at its Pilbara project.
The company already has a conventional 1.2-million-ounce resource that it plans to add to after it uncovered more shallow gold at its Mt Berghaus deposit.
Strike Resources (ASX:SRK) also has gold-prospective tenements near Kairos and De Grey.
De Grey Mining is an advertising client of Stockhead.