Kula Gold and Aurumin Limited have reported a maiden JORC-compliant inferred resource of 98,534 tonnes of old mine tailings grading 0.63 grams per tonne (g/t) gold at the joint venture’s Mt Palmer gold mine in Western Australia’s Southern Cross greenstone belt.
The inferred resource, defined by 60 air core drill holes, contains 1996 ounces of gold at a 0.4g/t cut-off, with preliminary metallurgical testwork showing an average 86 per cent gold recovery rate.
Kula Gold managing director Ric Dawson said: “Processing options for the at-surface tailings resource are now being evaluated. There is significant additional tailings tonnage undergoing further testwork which, once completed, should add to this resource in the short term.”
Dawson said Mt Palmer’s bigger picture was painted by high grades intersected at shallow depths in the adjacent historic mine, where the company is moving towards diamond drilling and then resource definition.
The tails resource lies within the joint-venture’s granted mining lease, which was drilled by a Challenger RA-150 air core rig using a 3.5-inch face sampling hammer.
Kula believes the hole-spacing adequately tests the tailings’ lateral and depth extent, with collar locations surveyed to millimetre-level accuracy by a survey standard GPS.
Samples were collected from 0.5-metre to 4m depth intervals - mostly at 1m – and were weighed at the rig, split via a cone splitter and assayed using Intertek’s Photon method. Duplicates and standards were inserted at a 1:40 ratio, with minimal contamination risks, as the samples were dry.
Dry bulk densities were measured from six trench and core samples, averaging 1.35 grams per cubic centimetre.
The metallurgical testwork employed Intertek’s Leachwell cyanide extraction on seven drill samples and reported gold recoveries between 60 per cent and 100 per cent, with an average of 86 per cent. One sample reported a 107.2 per cent recovery rate due to assay variability between the leach and original samples.
The resource was computer-modelled using a 3D wireframe based on geological logging and assay data and was classified as inferred due to the current drill density and geological continuity. A 0.4g/t gold cut-off grade was established, based on the prevailing economic factors.
The surface-stockpiled tailings, which are already pulverised and easily mined, offer Kula a low-cost opportunity for early monetisation. The Marvel Loch gold plant, 28 kilometres away, could be a processing option.
Kula is already looking at extending its drilling program to include other untested parts of the tailings repository and will include a few more infill holes to sharpen up the entire model, if possible lift the resource classification to indicated, and further build the resource.
Kula holds an 80 per cent stake in the joint venture. Under the terms of their agreement, Aurumin is now diluting its 20 per cent JV interest.
With the gold price at about $5200 per ounce, the current tailings resource would have an unprocessed, at-surface value of more than $10 million.
Combined with the tailings’ high metallurgical recoveries and simple, short-range mining, transport and processing, the tails could significantly enhance the venture’s value.
Kula is now planning a diamond drilling program to develop its main focus on the hard-rock component at the Mt Palmer mine, where shallow high-grade intercepts indicate significant additional potential.
Meanwhile, the tailings could be a timely and profitable stepping stone towards broader project development.
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By Doug Bright
