Commodities, Features, Gold

Exploring Victoria’s gold mining future

Victoria gold

While it accounts for only one of Australia’s top-five producing gold mines, Victoria has long been known for its high-grade deposits. We take a closer look at the state’s gold mining future. 

The gold mining history in Victoria pre-dates Australia’s federation.

That history was first ignited by an 1850s gold rush and has carried through to the present day, with a host of mining and exploration companies taking advantage of the state’s high-grade, low-cost potential.

Active gold mines in Victoria include the likes of Fosterville, Costerfield, Stawell and Morning Star, the former of which is considered one of the lowest cost gold mining operations in the world.

And with many emerging exploration projects looking to enter the production ranks, we shine a light on some of Victoria’s most promising gold assets.

Falcon Metals

Falcon is advancing its Pyramid Hill project, which was first staked in 2017 and covers an area of over 5000 square kilometres.

Much of the tenure is located in the Bendigo region in the central part of Victoria, north of Fosterville and the historic Bendigo Goldfields, where previous gold mining produced 22 million ounces of the precious metal.

After Falcon Metals was demerged from Chalice Mining in December 2021, the company commenced drilling at Pyramid Hill’s Karri prospect in January. Drilling at Pyramid Hill’s Ironbark prospect would soon ensue, with both targets producing high-grade gold intersections in 2022.

Falcon managing director Tim Markwell said the company had gotten off to a positive start at Pyramid Hill.

“We’ve received some pretty strong results, especially from Ironbark East,” he told Australian Resources & Investment. “It was great to see high-grade gold in the pan of that magnitude.

“In the central part of our permit where Ironbark East is located, there’s a lot of gold and we’re now getting a history of good drill results from that area.”

Falcon Metals has gotten off to a positive start at Pyramid Hill.

Falcon announced in July air core (AC) drill hole PHAC1030 had intersected 40m at 2.81 grams per tonne (g/t) gold from 50m of depth, including 26m at 4.2g/t. Within this, there were smaller increments of gold graded at up to 17g/t.

Diamond drilling at Karri in early 2022 also produced encouraging findings, with 6g/t and 7g/t hits emerging from the prospect.

However, these weren’t as significant as Ironbark, which means Falcon has shifted priorities.

“When you’ve got several prospects, you might expect one to stick its head up and demand more attention (than others),” Markwell said.

“Prior to this, the Karri prospect was the most advanced target with the biggest dataset, but given our results from Ironbark, that’s the highest priority now.”

Markwell also earmarked the Wandoo prospect as an exploration priority for Falcon, with its potential determined following a first pass benchmarking exercise.

“This year we went back and benchmarked our first pass drilling results at all our prospects against what we initially got at Karri, and the Wandoo prospect stood out as one that demanded more attention,” he said.

“Bearing in mind, we did get some very good results at Karri, such as 5m at 14g/t, including 2m at over 30 grams. 

“But the first pass drilling at Wandoo is materially better than what was achieved at Karri at the same stage.”

Chalice completed a diamond drilling campaign at the Karri prospect between September 2020 and February 2021, leading to a 5.1m intersection at 14g/t gold, including 2.2m at 32.1g/t.

But a higher percentage of Wandoo’s first pass drill results were deemed anomalous compared to Karri’s, and Falcon will strategise its next drill program accordingly.

Falcon has secured two AC drill rigs for a program that will include infill drilling at Ironbark East, as well as infill at other priority prospects. The drill program was set to commence in mid-November.

Beyond that, alongside making a bonafide discovery, Markwell hopes to work towards a resource in the near future.

“It’d be great to say that we’re doing an infill drilling program to get a resource statement out at some point,” he said. 

“But we’ve got to be sensible and pragmatic. We’ve got a big ground holding; we’ve got to prioritise our drilling carefully and make sure we hit the best targets first.”

Kalamazoo Resources

Kalamazoo Resources has been developing its Castlemaine and South Muckleford gold projects in the Bendigo region of Victoria.

The company also acquired the Mt Piper gold project from Coda Minerals in September. Located 30km from Fosterville, the Mt Piper gold project spans 1609 square kilometres and boosts Kalamazoo’s total Victorian landholding to 2006 square kilometres. 

Kalamazoo’s exploration manager Luke Mortimer said there had been an absence of exploration in the project area surrounding Mt Piper.

“With the Costerfield gold project at the northern end and the Sunday Creek gold project at the southern end (of Mt Piper), there’s a lot of farmland in between,” he told Australian Resources & Investment.

“And when you look at the exploration history and you go through the reports, you can see that not a lot of exploration has been done in this particular area.”

Mortimer said the proximity of Costerfield and Sunday Creek, owned by Mandalay Resources and Southern Cross Gold, respectively, means there must be some continuity between these projects.

“Costerfield has a head grade of 22 grams of gold per tonne – one of the highest head-grade gold mines in the world – and there’s an exciting new discovery to the south,” he said. “This shows us the potential in between has been open which is why we were keen to grab this project.

“We’re also excited about Mt Piper’s mineralisation style, which is akin to a Fosterville style with disseminated gold and an antimony association.

“Antimony is featured on the US Geological Survey’s 2022 list of critical minerals and the Costerfield mine produces an antimony concentrate alongside gold.”

Kalamazoo Resources is advancing a suite of projects in the Victorian goldfields.

Antimony is also featured on Australia’s list of critical minerals, alongside other high-profile commodities such as lithium, cobalt and vanadium.

Prior to Kalamazoo acquiring Mt Piper, Coda Minerals had already established the project’s potential, highlighted by a headline prospect.

“Coda Minerals had already identified a significant target at the Goldie prospect,” Mortimer said. 

“There they’ve found gold mineralisation over a strike of a few hundred metres, and rock chip samples are going at more than an ounce of gold per tonne. 

“So there’s been extremely high-grade rock chip results already identified at one prospect and that’s obviously an area that we’ll focus on initially while we do the target generation elsewhere.”

Mortimer said given Mt Piper is largely farmland, Kalamazoo will need to gain land access before exploration can commence on previously untouched areas.

“We generally don’t have any problems working in Victoria, it just takes a bit of time, ongoing communication, and patience,” he said. “You have to progress through the well-defined stages of land access and permitting, but once those things are in place, we’ll be good to go.”

To assist with land access, Kalamazoo has a community liaison representative who engages with local communities to ensure they are aware of the company’s activities.

Mortimer said building community awareness and trust is critical to achieving relevant permitting and approvals to conduct mineral exploration.

Victoria hasn’t always been the easiest state for land access, but the success of Fosterville mine has opened doors.

“Working in Victoria has its challenges and it’s a high-risk, high-reward scenario. It’s very easy to go out and explore Western Australia, but the economics of those deposits don’t stack up in comparison to a mine such as Fosterville,” Mortimer said.

“But at Kalamazoo, we play both hands. We have gold projects in the Pilbara and we have gold projects in central Victoria. These are two great areas for gold and we can be working on one while we’re waiting for the field season to commence on the other side of the country.

“We don’t have all our eggs in central Victoria, but we have a great portfolio of projects in the region and are here to stay for a long time.”

Fosterville, which is owned by Canadian mining company Agnico Eagle, produced 81,801 ounces of gold in the third quarter of 2022 at an industry-leading cash cost of $US435 per ounce.

Southern Cross Gold

Southern Cross Gold has intersected high grades aplenty at Sunday Creek as it develops one of Victoria’s most exciting gold projects.

The company added a third drill rig at Sunday Creek in November, enabling it to target each of the Golden Dyke, Rising Sun and Apollo prospects. Of particular interest has been drill hole SDDSC050, designed to drill the Rising Sun shoot in a previously untested west to east orientation.

Prior results indicated the Rising Sun shoot was intersected around 350m deep with multiple zones of gold mineralisation occurring from 393–763m. Southern Cross Gold said this was the thickest intersection of mineralisation seen to date at Sunday Creek.

As of early November, SDDSC050 was the deepest drill hole on the project by 251m (previous deepest being MDDSC026 at 519.2m).

Southern Cross Gold announced in October it had intersected 48.9m at 3g/t gold equivalent (AuEq) from 182m at SDDSC049, which drilled below old workings at the Golden Dyke prospect for the first time.

Just days before, the junior announced significant results from SDDSC045 at the Apollo prospect, with the drill hole intersecting 0.4m at 52.4g/t from 174.7m and 3.8m at 28.9g/t from 183m, including 0.3m at 362.5g/t.

Sunday Creek is an epizonal gold project, meaning it is associated with high levels of antimony.

White Rock Minerals

White Rock Minerals delivered first gold from its Morning Star gold mine in October, following an aggressive drilling campaign to restart the historic gold project.

Before being decommissioned in 1963, Morning Star produced 883,000 ounces of gold at an average grade of 26.5g/t. The mine is located near Woods Point in eastern Victoria.

The company treated 445 tonnes of ore at a feed grade of 10.7g/t from its first weekly processing campaign at Morning Star, which it said puts it among the top five high-grade gold mines in Australia.

“A lot of work has gone into the re-start of this famous Morning Star underground gold mine,” White Rock managing director and chief executive officer Matt Gill said in a press statement. 

“White Rock has conducted more than 7000m of drilling since acquisition in August last year.

“Morning Star’s existing infrastructure – shaft, headframe and winder, dewatering system and off-shaft development – and a functional gold processing plant has provided White Rock a rapid pathway to gold production.

“This has allowed the company to leapfrog many of the issues associated with the transition from explorer to producer – the time to achieve the necessary approvals and permits, supply-chain challenges, ordering and delivering long lead times and cost inflation and construction risks.”

Gold production was initially focused on the McNally Reef and Dickensen Reef at Morning Star, with the Exhibition Reef and Stacpoole Reef to also become gold sources as development advances.

Production is expected to ramp up into 2023 as more reefs come online.

The Bendigo region in central Victoria is home to many new and emerging gold projects.

Kaiser Reef

Kaiser Reef achieved record gold production of 3512 ounces at 12.1g/t from its A1 mine in the September quarter of 2022. This led to $8.83 million of revenue across the three months.

The A1 mine is located 23km from Jamieson and just north of White Rock’s Morning Star gold mine. Kaiser Reef is exploring opportunities to further uplift A1’s production, which includes the implementation of a major high-voltage power upgrade to cost $1.5 million.

The company said that as A1 gets deeper, it is achieving higher grades that could enhance the production profile. Kaiser Reef achieved an estimated 18g/t at A1 during August, which is approaching its long-term target grade.

Kaiser Reef is also exploring the possibility of bringing a second gold mine online, the Union Hill mine at Maldon, which has historically produced 2.1 million ounces of gold at 28g/t.

Other ASX-listed companies advancing gold projects in Victoria include Catalyst Metals, Navarre Minerals, Nagambie Resources, Stavely Minerals and Dart Mining, demonstrating a bright future for gold mining in Victoria. 

This feature appeared in the December issue of Australian Resources & Investment.

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