Tim Treadgold: We’re about to find out Apollo’s plans for its red-hot WA gold find
Gold has lost a few friends recently thanks to its $US44 an ounce price fall over the past month, but not far from Australia’s gold capital, the WA city of Kalgoorlie, a new gold star is rising.
Apollo Consolidated, a low-profile explorer once known for its efforts in West Africa, has made what appears to be a significant discovery at the southern end of the gold-rich geological structure known as the Laverton Tectonic Zone.
For non-geologists, the northern end of the zone is home to fabulously profitable gold mines such as Sunrise and Granny Smith, as well as mines around its namesake town of Laverton which was a major source of gold in the original WA gold rush of the 1890s.
News of Apollo’s discovery at Lake Rebecca, 150km east of Kalgoorlie, has been slowly filtering out with the first people to take note being those who attended the RIU Explorers Conference in the WA port city of Fremantle in mid-February.
It was at that event where Apollo revealed that West Africa was being reduced to playing second fiddle while Lake Rebecca was the start of “an exciting gold discovery in WA”.
At the time only a few people took much notice, but some appear to have placed buying orders for Apollo stock shortly after digesting the grade and thickness of the drill results obtained in the Rebecca prospect, and sniffs of more gold in the Redskin and Duke prospects about 6km to the south.
At Rebecca, three gold-bearing zones have been identified; Laura, Jennifer and Laura NE, with best assays including 17.84 metres at 15.95 grams of gold a tonne, and 49m at 4.57g/t.
Drilling is continuing at a brisk pace with a 20,000m program under way at a location which is close to being perfect for the development of a gold project, not far from the mining services available in Kalgoorlie with its abundance of labor and drill rigs.
But what ought to have caught the attention of investors with an interest in an emerging gold discovery story is that Apollo plans to accelerate its search effort because the results so far have been highly encouraging.
First step in the fast-track drilling attack on the Lake Rebecca discovery was taken last Tuesday when Apollo released an updated presentation which revealed the excellent drilling strike rate so far with “new zones from each program”.
The next step, 24 hours later, was a request to the ASX for a trading suspension ahead of a planned announcement, a remark which often precedes a capital raising.
While details of what Apollo might be planning have not been released, it is understood from market sources that the company will be seeking around $5 million in fresh funds to drive the Lake Rebecca project.
Given the exploration success so far it is likely that Apollo will be get solid investor support from clients of the two stockbroking firms behind the stock, Canaccord Genuity and Argonaut Securities.
The growing interest in Apollo can be traced through the company’s share price which was around 16c at the time of the Fremantle conference on February 19, rising in stages to 20c a month ago and then up to 23c when the trading halt was called – a rise of 43% in two months even as the gold price turned south.
In last week’s updated presentation, Apollo described how drilling at the Lake Rebecca project was expanding with each drill hole with the overall target starting to look like a single structure in a classic WA shear zone with multiple lodes splaying off the main Laverton shear.
Drilling over the next six-to-12 months will reveal a lot more of Apollo’s discovery and while the company is not listed as a presenter at August’s annual Diggers & Dealers mining forum in Kalgoorlie, it’s a fair bet that the company and its discovery will be a hot topic at the event because it is relatively close to the city.
As it now stands, the Lake Rebecca discovery is described by Apollo as a “live and growing” discovery in a prime location with a grade-advantage in the Jennifer lode which has the potential to “underpin commerciality”.
What Apollo is likely to focus on with its next drilling program is to establish enough gold in the Jennifer and Laura lodes to at least think about an early start on mining after a maiden resource calculation is delivered by the end of 2019.
As well as looking for a place to start mining, Apollo will also be trying to find more gold in the southern discovery area – and perhaps hunt for connections in the 6km between the north and south zones which, if successful, would point to a major gold discovery on Kalgoorlie’s doorstep.