Road to Gold Duke production looks bright for Western Gold as drilling confirms continuity

• First 50 grade control holes confirm strong gold continuity at Eagle and Emu deposits with high-grade intersections
• Results support updated scoping study and indicate potential for additional tonnes beyond current pit designs
• Assays pending for remainder of drill program with results to feed into revised resource model

Special Report: Western Gold Resources’ confidence in a recently updated scoping study for the Gold Duke project has been boosted by the first 50 grade control holes at the Eagle and Emu deposits returning positive results.

Results to date confirm the continuity of mineralisation along strike and at depth with notable intersections such as 9m grading 4.98g/t gold from a down-hole depth of 10m at Eagle and 5m at 5.16g/t from 31m at Emu.

Not only do these results strengthen confidence in Western Gold Resources’ (ASX:WGR) recently released updated scoping study for the Gold Duke project near Wiluna, WA, by supporting the resource model, they also confirm that Emu mineralisation extends beyond and below the pit design.

This indicates the potential for additional tonnes and larger pits which will be determined following completion of the updated resource model.

The company has completed more than 35km of a grade control and infill drilling program across the stage 1 pits at the Emu, Eagle, Golden Monarch and Gold King deposits.

“I am extremely pleased the early grade control drilling delivered the excellent results we anticipated it would, confirming strong continuity of high-grade mineralisation across Eagle and Emu to date,” managing director Cullum Winn said.

He added that with drilling now complete, assays flowing through rapidly and funding secured through production, the company was in a strong position to deliver early cashflow and capitalise on the current strength in the Australian gold price, which has passed the $6000/oz mark.

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Gold Duke project

Gold Duke is 35km southwest of Wiluna and spans about 25km of strike within the Joyners Find Greenstone Belt.

Mining approvals are in place for the Eagle, Emu, Golden Monarch and Gold King deposits that collectively host more than 50% of the existing resource of 1.3Mt at 2.2g/t for 127,000oz of contained gold.

The company also has a binding toll milling agreement with Wiluna Mining Corporation, whose processing plant is just 46km away via an existing haulage route.

Under its revised scoping study, Gold Duke is expected to deliver a cash surplus of $97.3m using an assumed gold price of $5500/oz from production of 42,800oz of gold.

This includes the addition of the Joyners Find North and South Pits with the company submitting an addendum to the approved mining proposal, which is expected to have no issues as both pits are within the disturbance area approved by the Department of Energy, Mines, Industry Regulation and Safety.

Pre-production capital outlay is expected to range from just $2.6m to $2.8m.

WGR’s grade control drilling was carried out to define the grade distribution of the ore at surface and in the targeted pit area as defined by the previous resource estimations and the updated scoping study.

The latest results were received from drilling on a 5m by 10m grid over the Eagle and Emu prospects with most assays coming from their northern ends.

While they represent just a small portion of the total drill program, the close-spaced drill pattern has already confirmed strong continuity of mineralisation near surface and is consistent with the existing Gold Duke resource and mine planning expectations.

Data from these priority assays has allowed the company’s geological team to begin testing and validating resource models at Eagle and Emu.

Results from this work will be progressively incorporated into a resource model update, which will form a significant part of the decision to mine for Gold Duke.

It will also support follow-up drilling programs planned for the stage 2 prospects at the project.

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Road ahead

WGR expects to progressively receive assays from the outstanding ~33,600m of drilling, which will feed into a comprehensive resource model update.

It will integrate drill data into detailed mine scheduling and optimisation.

This will build on results from the updated scoping study, which has already demonstrated strong project economics at conservative gold price assumptions.

In addition, the company will prepare to carry out the decision to mine process supported by enhanced geological confidence, updated block models and improved cash flow forecasts.

Collectively, these steps will transition Gold Duke from pre-production drilling to mine development, ensuring that WGR starts production with a fully de-risked, high confidence mine plan.

This article was developed in collaboration with Western Gold Resources, 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.