Musgrave Minerals has surpassed analyst predictions for its recent resource upgrade at the Cue gold project in WA, getting much closer to the 1-million-ounce mark than major brokers were expecting.

Musgrave Minerals (ASX:MGV) revealed today that its gold inventory at the Cue project had jumped by 41% to 12.3 million tonnes at 2.3 grams per tonne (g/t) for 927,000 contained ounces.

The news edged shares up nearly 7% to an early intra-day high of 32c.

Musgrave Minerals (ASX:MGV) share price chart



Both Canaccord Genuity and Euroz Hartleys had tipped that Musgrave would add around 150,000oz of near-surface open pittable gold to grow the Cue resource to roughly 800,000oz in its latest resource update.

The bigger resource includes the addition of maiden resources for the White Heat-Mosaic and Big Sky deposits, which collectively with the existing near-surface, high-grade Break of Day trend now host 982,000t at 10.4g/t for 327,000oz of gold – a 25% increase over the prior Break of Day resource.

Importantly, the confidence of the resource has also improved with total Indicated Resources increasing to 435,000oz.

Waugh said the increased resource was a significant result for Musgrave and the growth in resources would improve the future development potential of the project.

“This latest mineral resource estimate increases the near surface, potentially, open pittable gold ounces while also increasing confidence, with approximately 47% of resource ounces in the Indicated category,” managing director Rob Waugh said.

“The company is confident it can continue to expand its resource base as exploration drilling continues to intersect high-grade gold on new regional targets.”

Waugh said Musgrave would continue to focus on growing near-surface high-grade resources at Cue and progress prefeasibility studies (PFS) to accommodate the new deposits and potential future resource upgrades.

The upgraded resource has further reinforced Musgrave’s confidence that the Cue project would achieve the critical resources necessary to advance the project as a standalone development.

The company has a strong track record of discovery and value creation since acquiring 100% of the Cue Project in 2017. Musgrave has discovered multiple new deposits, including the high-grade Starlight lode and recent White Heat-Mosaic discoveries along the Break of Day trend and the Big Sky discovery just 2km to the south-west.

This has all been done at a historical discovery cost of about $30/oz of gold, which is well below the global greenfield average of $US45/oz (~$63/oz).

Concurrently with the exploration and resource definition drilling programs, the company has been undertaking prefeasibility level studies on the Break of Day and Lena deposits, which Musgrave says have been “overwhelmingly positive” so far.

The company is now expanding the PFS studies to integrate the White Heat-Mosaic and Big Sky deposits.

Musgrave also plans to continue to grow the resource post the latest update to over 1Moz of gold by January 2023.

Drilling is continuing with three rigs currently active on the project focusing on defining further near-surface gold deposits on the high-grade Break of Day trend.


This article was developed in collaboration with Musgrave Minerals, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.