Wiluna Mining Corporation (ASX: WMX) is preparing to grow its resources and reserves ahead of a landmark feasibility study for the Stage 2 expansion of its namesake gold mine.

The long-awaited Stage 2 study is fully-funded after securing a $US42 million loan agreement this week.

It plans to have the study completed by the end of 2021 with development to begin next year.

The company has just charted a path to use the drill bit to underpin its growth.

It has five rigs currently conducting infill drilling at its existing 2.14Moz measured and indicated sulphide resources, where it hopes to add 500,000 shallow, high grade ounces to its ore reserves ahead of the study.

Wiluna Mining is also taking aim at “under the headframe” targets beneath existing workings, with the bulk of the existing mineralisation only having been mapped to 600m below the surface.

The company is aiming to discover analogues of historic Bulletin main shoot, which produced 900,000oz at a handy grade of 8g/t.

If it can access similar high grade zones, Wiluna sees the potential to bring those ounces forward in the mine plan, with each 1g/t improvement in the mine plan accounting for 25,000ozpa during stage 1 and around 50,000ozpa under Stage 2.

Geologists have made the Bulletin northern extensions, and areas down-dip and along strike of the East and West lodes their priority deep targets for the coming year.


Recent results point to resource extensions

While WMX has substantial exploration plans ahead of it, recent results have also paved the way for future resource upgrades following a resource development drilling program consisting of 63 holes for a total of 16,705m.

That included hits from its Golden Age orebody, which adds grade to the large ore stockpiles it is currently processing from the Williamson open pit.

Best results from extension drilling at Golden Age included 1.52m at 14.46g/t, with a 0.52m interval at 37.95g/t, as well as 1.90m at 14.04g/t with 0.25m at 90.11g/t.

Boosting its sulphide plans, a number of thick intersections from the Happy Jack and East Lode zones were recorded in the exploration campaign.

These hits included 1.78m at 66.74g/t, 13.12m at 6.89g/t and 12.80m at 5.38g/t.

Wiluna has set guidance of 51,000oz at all-in-sustaining-costs of $2,000/oz for 2020-21, but expects to ratchet up production to as much as 120,000ozpa by the end of the 2022 financial year.

The project has been underexplored over the past 15 years, with the company setting a conceptual exploration target of 5-7 million ounces at 4.5g/t to 7g/t last year.

This article was developed in collaboration with Wiluna Mining Corporation, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.