Special Report: Ora Gold is on the verge of a step change with necessary authorities being the only obstacle remaining before it starts mining its high-grade Crown Prince deposit.

While the Crown Prince gold deposit is modestly sized, its shallow nature and decent grade make for an attractive, low-cost development that will deliver substantial cash flow for the company.

Speaking to Stockhead, Ora Gold (ASX:OAU) non-executive director Phil Crabb said the project would be a company-changer.

“The project is well advanced and the only hold up is getting the necessary native title and heritage approval to mine it,” he added.

“We will be producing, which will give the Company a fair bit of cash surplus and means we will not have to return to shareholders while aggressively pursuing other targets that we have lined up to do work on in the large area we have got at Garden Gully.”

And it’s not hard to see why. Crown Prince gold deposit will cost approx.. $4.7m to develop and will produce approx.. 22,000 oz of gold at a very low all-in-sustaining costs (AISC) of just $1,007/oz.

This will generate a forecasted net cash surplus of $21.1m according to the positive scoping study completed at the end of 2019, which used a modest gold price of $2,000/oz. Actual profit would be higher given that gold is currently trading above $2,600/oz.

And there might be more.

“There will be extra drilling at Crown Prince to expand the size of it, we believe it is bigger than what we first thought,” Crabb said.

While shallow oxide mineralisation at the proposed open pit is well drilled to a depth of about 75m, there are multiple stacked zones and depth extensions that are only partially drilled within the deposit.

Indeed the Company has flagged that these depth extensions are likely to have a similar style to the Great Fingall and Golden Crown deposits that are +1.5 million oz to a depth of 750m.


Other gold deposits

Crabb believes that once mining begins at Crown Prince, the next port of call for development could well be the Lydia prospect just 1.2km away where recent drilling has delivered outstanding shallow hits such as 7m at 116.3g/t gold from a depth of 7m.

Drilling has also demonstrated the potential for open-ended deeper mineralisation in the primary zone with hits such as 5m at 2.23g/t gold from 74m and 13m at 1.49g/t gold from 81m that finished in mineralisation.

Mineralisation at Lydia is interpreted to be of persistent high-grade within the oxide zone and open primary mineralisation at depth, all of which are positive indications for development potential.

“It will be part of our ongoing exploration and potential mining as we move on to mine Crown Prince. Lydia will be going down the same path,” Crabb added.

Like Crown Prince, the Board believes that Lydia is likely to have deep extensions.

It also noted that both deposits highlight the potential for further discoveries under cover in Lydia-Eclipse Lineament.

The Comapny’s Garden Gully project also hosts the Abbotts project which had historical production of 37,100 tonnes at 32g/t gold to a maximum depth of 90m.

Abbotts has a strike length of 1,700m with high-grade gold over a 1,000m strike in the Eastern Sheer zone.

The Company’s drilling to date has returned results of 6m at 7.9g/t from 47m, 4m at 17.8g/t gold from surface and 10m at 3.15g/t gold from 42m.

There is also potential for gold and base metals at the Government Well project where strong electromagnetic conductors have been outlined over historical gold/copper workings and shallow drilling.

The Company’s previous drilling has already confirmed gold and base metals zones.


Project pipeline

Besides progressing pre-development of the Crown Prince pit for gold production in 2021, the Company is also planning to carry out drilling at Lydia and other prospects within the Lydia-Eclipse Lineament.

The Company is also prioritising the drilling of numerous partially-drilled gold prospects and undrilled historical workings.

“We also have soil sampling, we are very active in the field,” Crabb concluded.


This article was developed in collaboration with Ora Gold, 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.