WA Gold ramps up gold reserve hunt near Wiluna with new drilling

WA Gold Limited has wrapped up the first phase of a diamond drill campaign at its Abercromby gold project near Wiluna in Western Australia, completing seven holes for 3277 metres, with samples now at the laboratory and results expected this month.

The drilling is part of a broader program designed to feed into a feasibility study after a recent scoping study outlined a compelling, low-capital pathway to production for the 518,000-ounce deposit.

The company says geological logging shows all seven holes intersected the target structure that hosts the Capital deposit at Abercromby, testing below and to the south of the current resource over a 500-metre strike length.

With core from the initial program now being assessed, WA Gold is already planning its next move. A further 6000m of fully funded resource development and step-out drilling is set to resume this quarter. The work will chase extensions to the existing mineral resource and look to upgrade confidence in the deposit ahead of a potential mining decision.

The company’s renewed drill-bit action comes after a strong scoping study in April painted a compelling picture for a staged mine development at Abercromby. The study proposed a low-capex, A$8 million start-up targeting an initial 114,000 ounces of gold over 4.5 years.

That plan would barely scratch the surface, exploiting only  20 per cent of the project’s total JORC-compliant mineral resource of 11.12 million tonnes grading 1.45 grams per tonne (g/t).

The staged approach combines a small open pit with a subsequent underground operation. Using a gold price of A$6000 (US$4158) an ounce, the study forecast a pre-tax free cash flow of A$270 million and features an eye-catching 1.5-year payback period.

A key part of WA Gold’s low-risk strategy involves trucking ore to a nearby processing plant, avoiding the hefty price tag and long lead times associated with building a new mill. The company has already executed a memorandum of understanding with Wiluna Mining to evaluate a potential toll treatment arrangement at the Matilda CIL plant, just 20km down the road.

Metallurgical test work has already confirmed the Abercromby ore is free milling, with high recoveries of between 93 and 95 per cent achievable through a conventional carbon-in-leach circuit.

Whilst Abercromby is clearly the company’s main focus, it also holds the Bullabulling project, 30km west of Coolgardie. The project sits adjacent to Minerals 260’s 4.5-million-ounce Bullabulling gold mine.  Previous reconnaissance drilling by WA Gold has delivered some impressive near-surface hits, including 2m at 18.1g/t gold, 12m at 2.3g/t and another hole of 4m at a tidy 10.12g/t.

For now, though, all eyes are on Abercromby. The company, which recently changed its name from BMG Resources to the more direct WA Gold, appears to have a clear line of sight to production. The strategy is straightforward: prove up a robust reserve, leverage nearby infrastructure to keep costs down and get into cash flow quickly.

With the mineralisation at Abercromby still open along strike and at depth, and with drill results from the latest campaign just around the corner, this WA yellow metal story could be just getting started. 

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