Record gold prices send prospectors flocking to explore WA's Goldfields

Prospecting applications (and, by the by, illegal mining) are on the rise in WA as gold prices hit new records of more than $4000/oz
OzAurum MD Andrew Pumphrey says over 20 prospectors, including Aussie Gold Hunters star Rick Fishers, have worked its Mulgabbie North project near Kalgoorlie this year
Alluvial gold finds can help explorers identify new target areas

As gold prices surge to new highs, the back blocks of WA have become flooded with prospectors hoping to strike it lucky in the hunt for their nugget of fortune.

While other commodities have fallen by the wayside amid oversupply, Chinese economic wobbles and high interest rates across the world, gold has re-emerged in 2024 as the apple of the mining world’s eye.

Fetching over US$2700/oz after hitting new records last week, even a modest find could make a prospector’s season, providing plenty of temptation for both professional and amateur fossickers to head out on the road and partake in the modern day gold rush.

Figures Stockhead has procured from WA’s mines department, which oversees a jurisdiction that produces ~70% of Australia’s bullion, shows how gold fever has swept up the state.

They tell with data a story that has become apparent to most in the industry. While sentiment across mining more generally has come down with lithium and nickel prices, enthusiasm for gold is on the rise.

Tenement applications more generally have slowed from 4192 in the 12 months to September 30, 2023 to 3742 in the 12 months to September 30, 2024. Tenement surrenders – those explorers no longer have the cash or interest to hold – rose from 1260 to 1966 over the same period.

But the figures around outback gold hunting are very different in nature.

With prices surpassing $4000/oz, up well over $1000/oz on last year’s average, illegal prospecting complaints have shot up.

So far 51 complaints have been received in 2024 and investigated related to people digging for gold without either a miner’s right or section 40E permit (the permit required to prospect on an exploration licence).

Given that’s only for the nine months to September 30, the figure is extraordinary. Last year saw 44 complaints received and investigated, up from 40 in 2022 and 37 in 2021. In 2020, the last time before the end of 2023 that gold hit a record high, 46 complaints were investigated.

Even more prospectors are doing things by the book.

To the end of September, some 3731 miner’s rights have been handed out, just 624 behind the total issued in 2023, though dwarfed by the number of new applications in the Covid lockdown years of 2020 and 2021.

s40E permits applied for by more serious prospectors on the other hand, which expire after three months, have nearly doubled from 1194 in 2020 to 1817 in 2021, 1758 in 2022, 1949 in 2023 and 2113 so far in 2024. Of these 2069 have been issued with 447 currently active.

How is gold fever working in the favour of ASX explorers?

Famous Fishers

OzAurum Resources (ASX:OZM) managing director and founder Andrew Pumphrey has seen it first hand on the company’s Mulgabbie North gold project.

It boasts a 260,000oz resource at a 0.7g/t ore grade which is set for development as a small heap leach project in a joint venture with a private operator.

But the project ~100km north-east of the historic gold city of Kalgoorlie-Boulder – where Paddy Hannan, Dan Shea and Tom Flanagan sparked our greatest and most enduring gold rush in 1893 – is a serious drawcard for seasonal prospectors.

Rick Fishers, left, is among the prospectors to have made OZM’s ground home this year. Pic: Supplied/OZM

Among its caravan of nomads and vagabonds is Rick Fishers, previously a star of the reality TV show Aussie Gold Hunters, who has regularly set up stall at Mulgabbie and the nearby Patricia project for as much as three months at a time in recent years.

“He can go anywhere he wants to go prospecting, he’s chosen to be out at Mulgabbie because it’s a great place to find gold nuggets,” Pumphrey told Stockhead.

“There’s probably been over 1000 ounces of alluvial gold come out of Mulgabbie.

“When I held it privately, there were over 1000 ounces come out of it that was associated with myself before the IPO. There’s nuggets half the size of my hand that came out of there.”

Gathering information

Prospectors may often work over ground held by explorers, but they tend to work hand in hand.

Pumphrey estimates over 20 prospectors have set up around Mulgabbie and Patricia this year, where previous drilling has intersected high-grade visible gold.

“It’s a reciprocal sort of arrangement, because we get information on stuff that they find,” he said.

“They find the gold where we’re not expecting it in some cases.”

While the alluvial gold can be exciting, the immediate development story at Mulgabbie North is different in nature.

Last month, the company signed a 50-50 profit sharing agreement with private company LHBM – led by Brendan James, a hydrometallurgical engineer who operated the White Dam heap leach in South Australia – to start a 12-month study on a heap leach operation.

While heap leach projects are less familiar to Australian investors these days, the method currently produces a sizeable portion of the world’s gold.

“It’s a really good treatment method for these large, low-grade ores and it means we’re not beholden to having to pay exorbitant toll-milling rates,” Pumphrey said.

“All the mills that were available to treat third party ores are at capacity now, from what everyone’s telling me, for a number of years.

“The heap leach is not going to be small by any means. But once these things are set up, I mean geez it’s a good way of generating cash flow.”

Outside of Mulgabbie and Patricia, OzAurum also has significant prospects in Brazil, where it has diversified to explore for niobium and rare earths.

But right now as gold prices continue to surge, the Kalgoorlie region is running hot.

“With this gold price, it just makes everything look good,” Pumphrey said.

“There’s so many trucks carting gold ore around Kalgoorlie, I’ve never seen anything like it ever in my life here.

“There’s dirt flying every direction.”

At Stockhead, we tell it like it is. While OzAurum Resources is a Stockhead advertiser, it did not sponsor this article.