Reach Resources has unveiled a shallow, high-grade and open-pittable resource of 61,300 gold ounces at its Blue Heaven deposit, which is part of the company’s Murchison South project in Western Australia.
Reach says the results have confirmed Blue Heaven as a viable source of gold production and the company is now looking at toll treatment options as a way for it to fast-track from explorer to producer in record time.
With any luck, the company says it could be putting the shovels to work within the next 12 months.
Although it is too early to lock in processing agreements, there are numerous mill operators in the area, including the Kirkaloca 2-million-tonne per annum (tpa) plant 70 kilometres north, Capricorn Resources’ new mill, 70 kilometres south and Ramelius Resources’ nearby 1.9M tpa Checkers mill.
Independent consultancy Mining Plus has put its stamp of approval on a mineral resource of 681,000 tonnes grading 2.8 grams per tonne (g/t) gold from an optimised pit design at the company’s Blue Heaven deposit.
Adding to the deposit’s credentials, 441,000t of the resource has been classified in the indicated category. The gold starts immediately from surface with an impressive 92 per cent sitting in high-grade fresh rock at an average 3.1g/t.
Metallurgical test work from the Perth-based laboratory, Nagrom, found that the ore at Blue Heaven can be easily processed using conventional carbon-in-leach methods to recover the gold with three composite samples returning average recoveries of a whopping 97 per cent.
The Murchison South project sits alongside the Great Northern Highway, south of Mt Magnet. It offers ideal logistics for rapid development given it is close to transport, electrical and gas infrastructure.
The project sits on a granted mining lease, which will come in very handy for speeding up approvals ahead of the development process.
A recent reverse circulation drilling campaign, comprising 14 holes for 1463 metres, set out to validate historical data from more than 300 holes previously drilled by the project’s former owners. Reach’s new drilling results did not disappoint.
The first two holes hit shallow, high-grade gold, including a standout 41m intercept grading 2.01g/t starting from surface. Within that, a richer 5m zone returned an impressive 10.01g/t from 36m deep.
The results also confirm gold-bearing quartz veins remain open at depth, hinting at the potential for a significantly larger resource still waiting to be uncovered with a further drill program.
Mining Plus modelled the resource using a conservative $3500 per ounce gold price. However, as gold is now pushing through the $5000 per ounce mark, there could be plenty of opportunity to expand the pit shell, making Blue Heaven an increasingly lucrative development.
Reach Resources chief executive officer Jeremy Bower said: “This is an excellent result, particularly given the gold price is at record highs of about $5000/ounce. Our project is situated on a granted mining lease, next to key infrastructure and we are well positioned to advance rapidly toward development.”
Reach, meanwhile, is running full steam ahead with plans to deliver a separate maiden resource estimate at the company’s nearby Pansy pit, which hosts a non-JORC compliant resource of 124,000t at 2.1g/t for 8300 ounces of the yellow metal.
Pansy shares the same Primrose fault system as Blue Heaven, which is a proven regional gold corridor. Reach has identified more than 4 kilometres of largely unexplored strike at the prospect, which is lying there, begging to be tested.
Further diamond drill testing is planned at Blue Heaven for metallurgical and structural analysis, while processing discussions, including for toll treating, are already underway.
As a high-grade, shallow deposit, sitting on a granted mining lease with impressive recovery rates and key infrastructure close by, Reach’s Blue Heaven perfectly fits the bill for speedy development.
Add a bullish gold price and you’ve got all the ingredients for a near-term mining operation with a major upside.
The punters are likely to be watching closely and hoping the company can replicate the recent successes of Auric Mining’s Jeffreys Find, which hauled in an eye-opening $100m in revenue and Horizon Minerals’ bevvy of ready-to-mine pits by turning Blue Heaven into another toll treatment cash-cow.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By James Pearson
