These ASX explorers are on the hunt for the next gold mother lode in South Australia

South Australia could be on the cusp of a resources and mining boom with the industry tipping almost $11bn into the state’s economy as the lure of gold and future facing minerals heats up on the back of the world’s transition to cleaner energy.

Latest data from the South Australian Chamber of Mines and Energy (SACOME) shows 15 resource companies generated $10.7bn for the state’s economy in 2021-2022, with $1 in every $12 generated by the sector.

ASX players such as Hillgrove Resources, Rex Minerals, Iluka Resources, BHP, and Oz Minerals were among the 15 companies surveyed, contributing to the equivalent of 8.3% of South Australia’s gross state product.

The results are testament to the resilience of the sector which has safely operated throughout the COVID-19 pandemic and helped to maintain the economic health of the state, despite navigating travel restrictions, lockdowns, and supply-chain impacts, SACOME chief executive officer Rebecca Knol says.

“The sector is currently in an upswing, and this is reflected in rising exploration expenditure and ongoing demand for labour,” she says.

“While 2023 is predicted to be the peak of the current commodity cycle, ongoing growth of the sector will translate directly into more jobs and continued prosperity for South Australia.”

South Australia’s oldest and largest geological province a hub of activity

The industry’s contributions mark an 80% increase in two years, up from $5.9 billion in 2019-2020, with most of the activity focused on the Gawler Craton, the oldest and largest geological province in the state that stretches from the Yorke Peninsula to Coober Pedy in the north.

In recent times, Minotaur Exploration put the Gawler Craton back on the mining investor’s agenda following its discovery of the Prominent Hill copper-gold deposit in 2001, kicking off a land rush from juniors wanting to peg ground within cooee of the huge, company-making breakthrough.

But exploration in the area dates much further than that.

The Tarcoola Goldfield (now owned by Barton Gold Holdings) was South Australia’s major hard rock producer in the 1900s, with numerous high-grade workings producing some 2,700kg gold bullion recovered from ~64,000t of ore at an average grade of 37.5g/t.

From exploration minnows to the world’s biggest diversified miners, everyone wants a piece of the action down in South Australia , the 9th most attractive jurisdiction in the world for mining investment.

Here’s the who’s who of ASX explorers chasing gold riches in South Australia.

ASX gold plays in South Australia

(Note: Market cap data pulled from the ASX and correct as of May 9.)

Hillgrove Resources (ASX:HGO)

Market cap: $87.28m

Copper-gold ore was mined from an open pit at HGO’s Kanmantoo mine in South Australia between 2011-2019 before it was put into care and maintenance, allowing Hillgrove to prove up more resources.

An underground mine is now being developed with the aim of resuming production in early 2024.

Stage 1 development would see HGO produce 43,500t copper and 11,500oz gold over four years at an all-in sustaining cost of A$8,051/t.

Because of all the existing infrastructure – including a 3.6Mtpa processing plant — Kanmantoo will cost just ~$25m to bring the mine online at a capital intensity of US$1290/t on an annual production basis.

That’s around one-fifteenth of other development projects around the globe, which average more than US$16,000/t, for a mine that will deliver $205 million in post-tax cash flow and has a $165m NPV at a ridiculous internal rate of return of 231%.

For reference, majors typically approve projects with an IRR of between 15-20%.

Kanmantoo currently has a mineral resource estimate of 6.4Mt at 1.09% copper and 0.12g/t gold, which has been expanded on the back of 143 mineralised intersections from 122 holes, growing more than six times since 2019.

Barton Gold (ASX:BGD)

Market cap: $43.99m

Barton Gold has been working hard at its long-term development objectives in South Australia’s central Gawler Craton, where it has 5,100sqkm of tenure and JV gold rights across two large scale exploration projects (Tarcoola and Tunkilla) with established gold targets.

Across its portfolio, Barton Gold has a gold endowment of 1.3Moz, and owns the region’s only gold ore processing mill – the Challenger plant – as well as the mothballed Challenger mine.

In April, the company’s Tunkilla gold project delivered a ~189koz MRE increase at a cost of only A$12 per additional ounce, with total mineral resources now sitting at 1.15Moz or 38Mt at 0.94g/t gold.

Barton’s managing director Alex Scanlon said this was an “exceptional result” and plans are now underway to follow up these results, as well as key regional targets later in the year.

The explorer is backed by specialist gold mining analyst, Warwick Grigor, who established Far East Capital with iron ore billionaire Andrew Forrest in the 1990s.

He says Barton Gold has a “good management focus and a growing portfolio of gold assets.”

Rex Minerals (ASX:RXM)

Market cap: $148.19m

Rex Minerals is nearing a final investment decision (FID) on its Hillside copper-gold project, also in South Australia’s Gawler Craton, which is expected to produce 42,000 tonnes of copper and 30,000 ounces of gold each year for the first 11 years of operations.

The shovel-ready, fully permitted project has key approvals in place, including State Government and regional support with a targeted timeline to reach FID in the middle of the year.

Around $200 million has already been spent on development at Hillside, which according to the company, is Australia’s second largest undeveloped copper project, second only to Rio Tinto’s Winu deposit in WA.

If all goes to plan, the company is hoping to get into production sometime in 2025.

Havilah Resources (ASX:HAV)

Market cap: $82.32m

In August 2022, Havilah shareholders voted to grant Oz Minerals (ASX:OZL) the option to purchase the Kalkaroo copper-gold-cobalt deposit in South Australia’s Curnamona province.

Kalkaroo contains 1.1Mt of copper, 3.1m ounces of gold and 23,200t of cobalt, with an open pit JORC ore reserve of 100Mt of which 90% is in the Proved.

The project is one of the larger undeveloped open pit copper-gold deposits in Australia. Havilah has secured the required mining permits (Mining Leases and Miscellaneous Purposes Licences) for the Kalkaroo project.

It also owns the surrounding Kalkaroo Station pastoral lease, a non-mineral asset on which the Kalkaroo project is located, thus reducing land access risks for the project.

Horseshoe Metals (ASX:HOR)

Market cap: $13.41m

Horseshoe Metals owns the Glenloth project, also in South Australia’s Central Gawler Craton, which consists of a single exploration licence – EL 6301 – and two areas totalling 107km2.

The larger eastern block, Glenloth, covers 81km2 and includes the Glenloth Goldfield and part of the Harris Greenstone Belt.

The smaller western block Old Well takes in the northern trend of the 1Moz Tunkillia gold deposit located 6km to the south, which is under development by Barton Gold Holdings.

No active field work was undertaken during the March quarter.

Indiana Resources (ASX:IDA)

Market cap: $20.24m

During the quarter, Indiana reported assays results from its December 2022 RC drilling program at the northwest end of the Minos prospect in South Australia’s Gawler Craton, with 10 holes completed for 1,668m.

The program, which was designed to infill and extend the main structure plus test the new parallel zone to the south, returned results including 12m at 9.06g/t gold from 106m, including 1m at 95.6g/t from 109m and 11m at 1.20g/t gold from 34m.

Assays results confirm the company’s geological interpretation of the Lake Labyrinth Shear Zone (LLSZ) as a significant gold-bearing system.

Drilling intersected multiple significant zones of veining, shearing and alteration corresponding with the planned target zones.

Marmota (ASX:MEU)

Market cap: $40.23m

Marmota’s Auroa Tank gold project is centred on the company’s dominant tenement holding in the highly prospective and significantly under-explored Gawler Craton, near the Challenger gold mine.

The project is well known for having shallow, high-grade gold which lends itself to low-cost, open pit mining and ore that is amendable to processing using conventional heap leach methods.

Towards the end of 2022, the company hit a bonanza 217g/t gold over 1m which kicked off an RC drill program to follow-up on potential extensions.

Marmota says Aurora Tank continues to grow, with a new high-grade zone underneath the NW flank, which features the company’s highest ever intersections.

“The remaining high-grade intersections that remain untested will likely lie outside an initial open pit and earmarked for follow up, but will not delay our progress in developing Aurora Tank as an open pit mine,” MEU chairman Dr Colin Rose says.

South Australian gold explorers share price today:

At Stockhead we tell it like it is. While Hillgrove Resources, Barton Gold Holdings, and Horseshoe Metals are Stockhead advertisers, they did not sponsor this article.