Strike Resources made the decision to look for conglomerate-hosted gold on its Pilbara tenements following prompting from its shareholders.

The company revealed on Monday that a review of data from its Paulsens East tenement in the West Pilbara had confirmed the existence of conglomerate-hosted gold.

Strike (ASX:SRK) has historically held a number of mining tenements in the Pilbara region principally for their iron ore potential, which is associated with the Fortescue Group of rocks.

The Fortescue Group is made up of mafic volcanic rocks found in the Fortescue Basin in the Pilbara Craton which are known to host gold and other minerals.

The company also pegged some ground last year in the North West Pilbara and was undertaking low-level exploration to gauge the project’s potential for lithium mineralisation — but was not looking for gold.

“Following our announcement last week, we got quite a few calls from our shareholders and brokers saying, ‘look we’re interested in your lithium tenements because they seem to be in a very prospective area for gold’,” managing director William Johnson told Stockhead.

“To be honest we hadn’t actually considered that in the past.”

Strike Resources shares over the past three months. Source: Investing.com
Strike Resources shares over the past three months. Source: Investing.com

The Paulsens East tenement directly abuts the southern boundary of Chalice Gold Mines West Pilbara Project tenements, with newly pegged Novo Resources’ tenements nearby to the South East.

Novo and partner Artemis kicked off the Pilbara gold nugget rush on July 13 when they made a now legendary announcement regarding a gold nugget find at Purdy’s Reward, south of Karratha, Western Australia.

“There’s a lot of activity around the two tenements that we have,” Mr Johnson said.

“We haven’t yet had a close look at them for gold, but they certainly seem to be at the right address.”

The company is now focused on evaluating the conglomerate gold occurrence it uncovered in the recent review of historical data and plans to undertake field work.

“We’ve got quite a bit of cash in the bank and to be honest it’s not going to take a huge amount of resources for us to go and check out the concessions that we have and see what gold potential is there,” Mr Johnson said.

“If we think the potential looks positive we’ll obviously spend some more time and energy and resources on advancing that.

Strike had around $4.5 million in cash at the end of the September quarter and is expecting a cash burn of around $265,000 in the current quarter, including an exploration spend of around $100,000.