Kingwest upgrades Menzies gold resource, eyes potential for open pit mining
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Special Report: Kingwest is studying the potential for early mining of its shallow gold resources after reporting a resource upgrade for its Menzies project.
Investors have sent shares in Kingwest Resources (ASX:KWR) up more than 25 per cent to 12c this morning after it announced a resource upgrade for its Menzies gold project (MGP) in Western Australia’s Eastern Goldfields region.
The company has increased near-surface resources at the MGP to 233,300 ounces of gold while combined resources across the MGP and nearby Goongarrie project now totals 258,336 ounces.
Resources at the Lady Harriet-Bellenger-Warrior system increased by 35 per cent, while no resource was previously reported for the Selkirk prospect.
The Warrior and Bellenger resources extend from near surface to 120m deep and have potential to be exploited as open pits, while resources at Selkirk and Lady Harriet are located beneath previously mined shallow open pits and may be mined via pit cut-backs.
Kingwest plans to undertake pit optimisation and economic studies in the coming months to evaluate the potential for open pit mining of these resources.
“We are very pleased to continue to increase our near-surface gold resources whilst at the same time we target deeper higher-grade resources,” chief executive officer Ed Turner said.
“We are investigating profit share arrangements with third parties to potentially mine these shallow resources while we focus on the higher-grade deeper targets.”
Last week, Kingwest developed deeper exploration targets at three mineralised systems that it is currently drilling at the MGP.
These targets are based on the predicted continuation of high-grade gold mineralisation below historical underground workings.
The extensions of the Yunndaga, Lady Shenton and First Hit systems have a collective exploration target of 388,800 tonnes to 716,050 tonnes grading between 13 grams per tonne (g/t) and 23g/t gold.
Results above 5g/t are generally considered to be high grade.
Kingwest is currently carrying out an initial 8,300m reverse circulation and diamond drilling program on these targets to prove up new resources.
This program is projected to finish in late May 2020 but may be extended depending on results.
Menzies produced 800,000oz of gold at 19g/t, including 650,000oz at an outstanding 22.5g/t from underground mining before 1950 and another 150,000oz at 2.6g/t from open pits in the 90s.
The company consolidated the land package that makes up the MGP in 2019. It covers 15km along the mineral-rich Menzies shear zone, which has seen limited exploration over the last 20 years.
Despite this dearth of recent exploration, the numerous existing open pit and underground deposits provide a wealth of ‘walk-up’ drill targets for Kingwest, making fresh gold resources a lot easier to unearth using modern exploration methods.