The Americas Dream: these gold projects are proving irresistible to Australian explorers
Australian gold players have been making their way across the Pacific Ocean to the Americas, picking up promising projects that are often more attractive than equivalent projects in Australia.
Recent developments have challenged the broad assumption that North American explorers were successful in the Americas and Australian explorers tended to stick to Australia and Africa, said Hedley Widdup, executive director at investment firm Lion Selection Group.
“The thing that led to the rush of Australian explorers going far more confidently into the Americas was first of all, Australian-listed gold companies starting to attract global investor attention on the back of their successes,” he told Stockhead.
He pointed to Northern Star Resources’ (ASX:NST) buying the 10 million ounce Pogo mine in Canada as one of the first examples of this, followed by Evolution Mining (ASX:EVN) picking up the Red Lake mine and Newcrest Mining’s (ASX:NCM) recent Red Chris acquisition.
A number of North American companies could also be looking to emulate Atlantic Gold, which was the subject of C$723m ($774m) acquisition by St Barbara (ASX:SBM).
“They (North American companies) know they can put together gold resources and that there are Australian buyers,” Widdup said.
Opportunities could also rise due to the patchwork nature of landholdings in the US.
“In some cases it is the state, in some cases federal, defence but in most cases individual [ownership],” Widdup said.
He pointed to the example of a Canadian-listed company that is exploring in Nevada on ground that was mined in the 1880s and had not been touched since.
“It was a high-grade gold field. It should have been very attractive but it sat within private hands, in the same family for about 140 years, which you wouldn’t hear of in Australia.”
High gold prices also make it easier for smaller ASX-listed gold companies to raise money, which in turn allows them to follow the trail blazed by their large cap compatriots.
“The ability to raise money is what gives people a head of steam,” Widdup said.
Hawkstone Mining (ASX:HWK) managing director Paul Lloyd also reckons that there are opportunities in North America that just have not been subject to the same level of exploration that Australian projects would been subjected to.
He pointed to the company’s Lone Pine project in Idaho as an example, noting that despite being mined back in 1907 and having a non-JORC resource of 71,000 ounces at 18 grams per tonne (g/t) gold, it had never been drilled.
“For it not to be followed up by anyone just shows that it is a very different market in the US for exploration expenditure and high risk capital, compared to say WA,” he told Stockhead.
“If there was a resource like that in WA it would look like a pin cushion.”
Widdup added that North Americans had a culture of separating prospecting from exploring.
“Prospecting by its nature is walking around, looking at the ground and just observing what you see and acting on it. You see mineralisation sticking out of the ground, you chip away at it and that might be a discovery,” he said.
“Exploration, on the other hand, is involves collecting all sorts of science, datasets and combining them to form a target; and then investigating it by drilling, which could result in a discovery.
They they are two different approaches. Australians tend to prospect less and explore more, and North Americans are probably much bigger on prospecting.”
Hawkstone is currently preparing to kick off maiden drilling at its Lone Pine project.
Lloyd says drilling of three to five holes will help the company understand the geology, although it is not the only work that it is carrying out at Lone Pine.
“We have completed a structural interpretation of the area and we will do some reconnaissance soil and rock chip sampling in the general area as we are drilling,” he added.
“It is a very predictable geology but it does come down to mother nature and you never know with these projects.
“But from our point of view, it looks extremely exciting and we are confident.”
The company is also waiting on results from a large stream sediment sampling program at the recently acquired Western Desert project and — depending on those results — would look to increase its landholding in that area and follow up with additional ground work.
Nova Minerals (ASX:NVA) recently secured an investment of up to $6m from Collins St Asset Management as it prepares to grow the shallow 2.5 million ounce inferred resource in the Korbel deposit at its Estelle gold camp in Canada.
The company is targeting an additional 2-5 million ounces for the Canadian project. It believes that the higher end of that range is possible, using an average drill depth of just 100m.
Drilling has already started at Block B, one of two zones that make up Korbel, and a second diamond drill rig has been mobilised in recent weeks to accelerate the program.
Korbel is but one of 15 known prospects within the Estelle camp, with Nova planning to test others later in the year.
The company is now mobilising a rig to site for 2,200m of diamond core drilling to continue through June and July.
Drilling at the Aurora Prospect will initially focus on “high priority” hole A6, which is located immediately north of an earlier drill hole that identified 11 zones of gold mineralisation from near surface to 462m.
Resolution also plans to fly geophysical surveys in June to define new drill targets on the Echo Prospect, collect comparison data over the Echo and Aurora prospects and enhance drill targeting on the Aurora prospect.
In South America, Titan Minerals (ASX:TTM) is raising ~$14.5m to fast track exploration at its Dynasty and Copper Duke projects in Ecuador.
The company raised $12m through an oversubscribed institutional placement, while up to $2m worth of shares will be offered to shareholders under a share purchase plan. A further $500,000 to be tipped in by Titan directors.
Titan is preparing a +12,000m drilling campaign at the 2.1 million ounce Dynasty project to define resources before ‘stepping out’ along the 9km of mostly untested strike to make it bigger.
It also plans to carry out airborne geophysical surveys for high resolution magnetic coverage and surface sampling programs at the Copper Duke project.