Special report: Perth-based Lefroy – which has just completed its first year of exploration– is among a new wave of explorers making the most of the resources recovery.

Aussie explorers are now spending more than $500 million per quarter – half of which is going into gold, mainly in Western Australia, Lefroy chairman Gordon Galt discussed in his letter to shareholders in the Company’s 2018 Annual Report.

Lefroy has amassed an under-explored 600sqkm land package — just 50km from Australia’s gold capital of Kalgoorlie, WA.

The project has been divided into two parts – Western Lefroy and Eastern Lefroy. Lefroy is aggressively exploring the areas with a major gold mining partner Gold Fields which has brought in expertise, high-tech equipment, and has the adjacent St Ives Processing plant.

Lefroy is focused mainly on the eastern half of the project – where gold nuggets have recently been found along a major regional structure called the Mt Monger Fault.

Lefroy’s direct neighbours include some large gold mines.

On one side is Gold Fields’ 350,000 ounce a year St Ives operation, and on the other, Silver Lake Resources’ Mt Monger gold operation.

Lefroy was able to capitalise during the gold price downturn when some mining companies left the area and relinquished ground, said Lefroy managing director and experienced geologist Wade Johnson.

That enabled the company to pick up the vacant, highly prospective land – knowing that the gold price would turn around.

“People always ask ‘how did you get all that ground?’,” he said.

“In 2014, a prospector and now-major shareholder told me that he was picking up nuggets in the ground down there.”

It was incredible to be 40km from Kalgoorlie finding large nuggets near surface, in a place that hasn’t been explored for decades, Mr Johnson said.

“We maintained a close watch on the area and when every other company dropped ground back in 2013, 2014 and 2015 we would peg it.” We then placed all the tenements into a private entity named Hogans Resources.  Concurrent with Hogans, another company, US Masters Holdings Limited was also pegging.

An old colleague, Geoff Pigott, a Director of US Masters and I caught up over a coffee back in January 2016 and sowed the seeds of “let’s put all this together”

“That’s how we built the portfolio.”

Lefroy was formed in 2016 when ASX-listed US Masters Holdings (USH) acquired Hogans Resources to create a commanding, unexplored gold project in the heart of the Goldfields.

The project’s two major areas – Western Lefroy and Eastern Lefroy – are both exciting in their own right.

The explorer formed its partnership with Gold Fields in June, handing over the exploration management of western Lake Lefroy area for its attention.

Gold Fields is the biggest gold explorer in WA, with a planned expenditure of $85m in 2018.

And Lefroy won’t need to pay anything at Western Lefroy until Gold Fields has spent $25 million on exploration.

“But if they do find something, they will spend it fast — because they have demonstrated they have the capacity to find and develop big deposits,” Mr Johnson said.

“They are the biggest gold explorers in WA, and the biggest spenders.

“They will need more ore to fill the mill, and we are right next door with all the right geology that is vastly underexplored.”

The deal allows Lefroy to concentrate on its flagship Eastern Lefroy project, right next to Silver Lake’s 160,000 ounces per annum Mt Monger gold operations.

Its Lucky Strike Exploration Hub is centred on the high-grade Lucky Strike prospect and includes the nearby gold prospects Capstan and Red Dale.

Recent deep drilling at Lucky Strike hit more high-grade gold intersections at depth, including 10 metres at 2.98 grams per tonne of gold from 106 metres, that included 4 metres at 6.63grams per tonne from 109m.

But the company also identified a new shallow oxide gold zone, including 8m at 4.96g/t gold from 27m – which including 1m at 33.5g/t gold from 33m.

Anything above 5g/t gold is considered high grade.

“It’s a whole new discovery – a whole new trend that we have found down there,” he said.

“It’s true greenfields exploration.

“At Lucky Strike we have discovered something completely new — a new style of mineralisation, in an unusual host rock.

“Every time we drill in that area we are finding more and more gold bearing rock.” With a huge project in the heart of Kalgoorlie, Lefroy is looking for a big gold deposit.

“If we come across smaller deposits, that’s great – we could commercialise them – our aim is not to be a small-scale miner, we want to find and be part of a big discovery,” Mr Johnson said.

“And I like to think we have the right ground to make that big discovery, which has had very little exploration over the last 2 decades.”


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