Kuniko fires up drill bit to chase bonanza NSW gold hit

Kuniko Limited has officially fired up the drill rig for a second tilt at its Commonwealth-Silica Hill gold-silver project in NSW’s tier-one Lachlan Fold Belt. 

The company’s phase two diamond drilling program is designed to follow up on a string of high-grade hits from its first-phase work, which featured a remarkable 100 per cent hit rate across all six holes.

The headline act from the initial foray was a new discovery at the Silica Hill prospect, where a single drill hole tagged a spectacular 0.5-metre interval grading an eye-watering 347 grams per tonne (g/t) gold equivalent. 

That intercept was made up of a hefty 27g/t gold and a massive, coffee-spitting 20,603g/t silver, sitting 100m outside the project’s existing resource envelope. 

The discovery hole returned a broader intercept of 84m at 2.6g/t gold equivalent, which also featured a richer slice of 3.4m running 50g/t gold equivalent, confirming a significant mineralised system. 

Other top-shelf results from the company’s maiden program included a 7.1m hit grading a solid 9.7g/t gold equivalent from Commonwealth South, with another hole showcasing 8m grading 8.6g/t gold equivalent from the Commonwealth Main Shaft prospect.

Since the latest discovery at Silica Hill remains open in all directions, Kuniko’s phase two program will prioritise drilling there in the first instance before testing for extensions to the other significant intercepts within its 575-square-kilometre tenement package.

The company says the new campaign is planned to be scalable, kicking off with an initial six holes for 1350m, with the potential to expand to 14 holes for 3340m, providing it with the flexibility to chase mineralisation as new geological information comes to light.

Kuniko Limited managing director Maja McGuire said: “The commencement of the Phase 2 drilling represents the next step in advancing the Commonwealth-Silica Hill project following the successful Phase 1 campaign which delivered bonanza grade results.”

The campaign’s assay results are expected in early September and will feed into an updated mineral resource estimate for the project, which the company expects to deliver in the second half of this year.

Kuniko is earning up to a 70 per cent stake in the project from ASX-listed Impact Minerals, which previously outlined a historical resource estimate of 88,000 ounces of gold and 3.3 million ounces of silver. 

However, judging by the stunning drill hits from phase one, Kuniko’s management says it remains convinced that figure may just be a starting point.

Notably, the company says the Commonwealth project is showing all the signs of a VMS-epithermal system, sharing geological characteristics with Canada's world-renowned Eskay Creek deposit, one of the richest precious metal mines ever discovered.

Beyond the immediate resource targets, Kuniko says it has its eye on a potentially bigger prize. Recent geophysical work has identified a 4km-long conductive corridor starting just one kilometre from existing mineralisation.

This corridor sits within a broader 5-square-kilometre trend that also includes the historic Walls and Stringers shafts, which have seen limited drilling, providing compelling near-resource targets for the latter stages of the current campaign. 

Whilst the drill rods turn in NSW, the company continues to advance its battery metals portfolio in Norway, which includes the 40-million-tonne Ertelien nickel-copper-cobalt resource.

Global automaker Stellantis is a key backer, holding a 13 per cent stake in Kuniko and offtake rights for 35 per cent of future nickel and cobalt production from the Norwegian assets. 

For now, though, all eyes are on the Lachlan Fold Belt. Success with this second drilling campaign could potentially go a long way to proving up a significant high-grade resource in one of Australia’s most sought-after mineral provinces.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au