This is the near-term gold producer you haven’t heard about

Gold producers or companies that are poised to start producing the precious metal on the ASX typically do not want for the lack of attention from investors.

So it is perhaps a little surprising that this near-term gold producer appears to have flown under the radar despite having a tier one asset with historical production that is less than 12 months from production and potential for other resources to be found and developed.

Tulla Resources (ASX:TUL) has a 50% interest in the Norseman project where construction work is already underway, with first gold targeted for August 2022.

And while Tulla, which listed in March this year, is a relative unknown, its leadership team is well known with a good track record.

Speaking to Stockhead, executive director Mark Maloney noted that the company’s executive chairman (and his father) Kevin Maloney had a long history in resource finance and starting up and developing mining and mining services companies.

“Probably the company that we are most well associated with is The MAC Services that listed in 2007. Three years later, investors got four times their money from a takeover by Oil States International Inc in December 2010.”

The company’s non-executive directors Michael Anglin and Andrew Greville also have a wealth of experience, having served as senior executives of BHP and Xstrata respectively.

Maloney noted that Anglin has a lot of experience in mine start-ups, operations, joint ventures, base metals and precious metals, and is also very well known in the global institutional investment community. Greville has a lot of experience in start-ups, business development and commodities.

“Both these guys have strong global networks, which is going to be good for deal flow as we get into cash flow and look for other opportunities to grow the business,” he added.

This impressive board and its stable, long-running management team are matched to an equally significant project.

Central Norseman gold project

The Norseman gold project has a long history of production with over 5.5Moz extracted since 1935 and is considered to be one of the highest grade, large-scale gold projects in Western Australia.

It was one of two major gold projects – the other being the well-known Kambalda project – that was operated successfully by Western Mining for many years until it decided to sell off its gold assets in the 1990s.

Here’s where the destiny of the two projects diverged.

Kambalda was picked up by Gold Fields and benefitted from the South African major spending big on both exploration and development to get the asset up to spec and reap major returns over the years.

Conversely, Norseman went into the hands of smaller players that never had the money to invest in its resources until Tulla and its partner Pantoro (ASX:PNR) became involved.

Maloney noted that while the project had a rich history, it did not have any real investment until now.

“Norseman has a great future ahead of it, it is a tier one asset, good grade, reasonably low cost, it is in a tier one jurisdiction, easy access, good workforce.”

He added that with over 70km of strike that’s largely untouched, there was still a lot of upside to come from it.

“It’s an asset that can deliver in the right hands and we believe it is now back in the right hands with Pantoro as the manager,” Maloney explained.

“We went through a process to select them and we backed them because we believed that they are a great management team and they have delivered on everything that they said they would plus more.”

To back that, one need only look at the current resource of 4.5 million ounces of gold including an ore reserve of 713,000oz of gold along with an definitive feasibility study that clearly outlines its robust economics. It includes average production of about 108,000oz per annum at a unassuming all-in sustaining cost of $1,292 per ounce while pre-production costs are a very palatable $89m with payback in 13 months.

Drilling is also underway to almost double ore reserves to about 1.2Moz by the end of the current financial year, with notable results such as 8m at 10.42 grams per tonne (g/t) gold at the Green Lantern deposit.

More than gold

While a gold project that’s poised to deliver cash flow in the near term with some very attractive economics is a major positive for Tulla, Maloney was also keen to point out that Norseman is not just about the precious metal.

“There’s a whole host of different minerals there but I guess the ones we are most focused on and excited about are iron ore, lithium and nickel,” he said.

“In regards to the iron ore, there has been some early stage work done on that. It is hosted there by a sedimentary iron formation and consists mostly of magnetite.

“We think that there’s potentially individual units ranging in widths between 15m and 240m over a reasonable strike.”

He added that more work would be needed to prove up this resource as most of the iron ore work is limited and historical.

On the nickel front, Maloney pointed out that Nickel West has been in a JV with Western Mining previously and had spent a lot on drilling that returned some good information and data.

“We believe there are potentially some high-grade nickel sulphide deposits there. We are certainly in the right area, we have successful neighbours. It is just a matter of working out exactly what size is there.”

The region is also well known for hosting lithium deposits and is right next to Liontown’s (ASX:LTR) Buldania project.

“We have done some early stage sampling there and that has got us all excited, but a lot of work needs to be done on the lithium as well,” Maloney noted.

He added that with these minerals, of which nickel and lithium are included in the JV with Pantoro while the iron ore rights are held entirely by Tulla, what the company is working on now is pulling together the data to inform the market more fully.

Its longer term strategy is similar to what has been done with gold, which is to seek farm-ins and joint venture partners to take those minerals to the next level.