Why settle for melon seeds when you can have goose eggs?
Mining & Resources
A 5cm nugget recovered from Magnetic's Leonora–Mertondale site in central WA. Pic: Magnetic
Pilbara gold explorers loudly boast of nuggets the size of watermelon seeds — but in Leonora-Laverton they’re digging up goose eggs, writes Barry FitzGerald in his Garimpeiro column
The reward of melon seed-sized gold nuggets from metal detecting in the Pilbara doesn’t do it for you?
Then pay up $25 for a Miner’s Right or a Section 40E permit and head off to the Leonora-Laverton region of Western Australia where prospectors have been plucking goose egg size gold nuggets from the ground that leave the Pilbara ones in the shade.
Just like the Pilbara nuggets, the region around Leonora-Laverton has long been known as source of nuggets for the willing prospector.
But unlike the crafty promotion by some companies that the Pilbara nuggets could possibly be as extensive as similar looking nuggets long mined in South Africa’s fabled Witwatersrand, companies active in the Leonora-Laverton region are low-key about their golden goose eggs.
Magnetic Resources (ASX:MAU) is one of those.
It is a serious hard-rock gold explorer near the townships of Leonora and Laverton, and it has spent a good 12 months doing all the traditional preliminary work before kicking off potential high-impact drilling programs into a bunch of hard-rock prospects.
But when Magnetic boss and noted exploration geophysicist George Sakalidis was sent some pictures of eggs of gold being (below) recovered from surface scratchings by prospectors and a local pastoralist on one of Magnetic’s Mertondale tenements near Leonora, he was obliged to announce it to the ASX, with the obligatory pictures.
That was back in August and Magnetic shares have since moved from 12c to 26c a share, valuing the company at $48 million on a fully diluted basis.
The company has also added another nuggets leg to its story at its Hawks Nest ground near Laverton.
As a technically proficient explorer, Magnetic recognised the difficulties in trying to work the nugget areas to a company scale.
Its answer has been to strike tribute agreements where it lets the prospecting activity go on in return for a 15 per cent gross royalty.
It’s a neat solution and means that Magnetic can focus on its drilling programs near Leonora and Laverton on what might be now called its traditional hard-rock gold targets.
Any one of them could deliver the 1 million oz-plus deposit Magnetic is chasing, drawing on the geological and geophysical characteristics of big known deposits in the region.
Owned by others, the known deposits include the Wallaby (7.1 million oz), Granny Smith (2 million oz), and Gwalia (7.3 million oz).
While Magnetic chases down that big-time potential across its 10 newly worked-up exploration targets in the Leonora-Laverton region, there is no getting away from the fact that the nuggets yarn has added another leg to the company’s story.
So while the prospectors on Magnetic’s ground get on with metal detecting, the uncovering of the big nuggets has thrown up some new opportunities for the company.
That is particularly so at Mertondale where an extensive laterite horizon hosts the nuggets as well as fine gold which can be panned off.
The fine gold is not able to be picked up by metal detectors.
But given the extent of the laterite cap (Magnetic has extended its coverage to 22 sq km in a recent deal with a prospector), it won’t take much in terms of grade for Magnetic to be on to something big, assuming the fine gold is present throughout or at least a decent portion of the laterite.
Then there is the need to match up the location of the big nuggets to drainage channels which could lead to the bedrock source of the nugget action in the 1m to 5m thick laterite cap at surface.
Match up the nugget-led exploration effort to Magnetic’s more traditional hunt for a big hard-rock discovery, and it makes for an interesting mix.
News flow will certainly be strong from the company in coming months.