WA Gold Limited has fired up the drill rig at its 100 per cent-owned Abercromby gold project in Western Australia’s storied Wiluna-Agnew greenstone belt, launching a significant resource development program aimed at delivering a maiden ore reserve.
The new program is a critical step in the company's strategy to progress Abercromby towards a final investment decision in 2027.
The 54-hole, 7200-metre reverse circulation (RC) drilling program will target the stage-one open-pit component of a mining approach outlined in a scoping study completed in April. The campaign is designed to de-risk the project by increasing confidence in its current gold resource.
The Abercromby project already contains an impressive maiden resource of 11.12 million tonnes grading 1.45 grams per tonne (g/t) gold for a total of 518,000 ounces of gold in combined indicated and inferred categories. The indicated category is estimated to contain 4.15Mt at a grade of 1.23g/t gold for 165,000 ounces of the precious metal.
The deposit remains open at depth and along strike; however, this program is focused on firming up the known mineralisation within the proposed open-pit mining area.
The April scoping study outlined a compelling stage-one development plan that envisaged an initial open-pit operation transitioning to an underground operation. The study projected an initial production target in the order of 114,000 ounces of gold, generating an impressive A$270 million forecast pre-tax cashflow.
Due to the shallow nature of the deposit and numerous toll treatment options nearby, the study estimated a remarkably low upfront capital development cost, including rehabilitation costs of just $8 million, a figure to make many aspiring developers envious.
WA Gold Limited chief executive officer Ben Pollard said: “Following the successful Phase 1 diamond program, we are continuing to systematically de-risk the Project, with results from this drilling to support an updated Mineral Resource Estimate and the technical work required to evaluate a maiden Ore Reserve."
The current RC program follows on the heels of a successful phase-one diamond drilling campaign in which all seven holes hit the targeted eastern lode. The findings confirmed the continuity of the mineralised system over a strike length of at least 500m and boosted confidence in the company's model for the project's proposed underground component.
The project sits on a granted mining lease within the Wiluna Greenstone Belt in WA's northeastern goldfields, 30km southeast of the main Wiluna town-site. The greenstone belt is one of Australia's most storied gold-producing regions, with a massive gold endowment exceeding 40 million ounces. Historically, its total gold yield ranks second in Western Australia to Kalgoorlie's output.
Abercromby also lies along the same major structure that hosts some of the region’s biggest gold deposits, including Gold Fields’ 6.5-million-ounce Agnew operation and the historic 12-million-ounce Wiluna gold mine, where a stop-start mining history stretches back to 1902.
WA Gold's latest developments come at a time when the Australian gold sector is running hot. The Aussie gold price continues to hover at historically elevated levels, with the Perth Mint quoting today's gold price at A$6421 per ounce, ensuring a strong focus remains on the economics of near-term gold project developments.
This price strength is also fuelling a wave of mergers and acquisitions across the industry, highlighted by a string of recent high-profile deals, including OceanaGold’s A$776 million bid for Ausgold earlier this month, proof that quality WA gold projects remain firmly in the spotlight.
Further clearing the path to production, WA Gold has already executed a memorandum of understanding with Wiluna Mining to evaluate a potential toll-treatment arrangement at that company's nearby Matilda carbon-in-leach gold processing plant. The company's metallurgical testwork has confirmed its gold is free-milling, with conventional processing capable of achieving high recoveries of between 93 and 95 per cent.
With a clear plan of action, a significant resource in a top-tier jurisdiction, positive metallurgy, and the drill's hammer bit boring relentlessly into the Abercromby deposit to prove up a maiden reserve, WA Gold is working its way steadily through a solid development checklist. As assay results from the current program start to land later in the month, market observers will likely be watching to see how this story unfolds.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Doug Bright
