Could NML drive Victoria’s new billion-dollar gold rush?
PUBLISHED: 14-08-2017 10:00 a.m.
Hey! Looks like you have stumbled on an old article that is archived from our old business model.
In 2019 the original founding team returned to run Next Investors, we launched a managed investment fund where we only write about stocks we carefully research and are invested in for the long term - see our current investment portfolio here.
The below article was written under our previous business model before we became a managed fund but we have kept it kept online for your reference - read more about the Next Investors evolution to a managed investment fund.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers. - click here to read how our current business model works.
In the 1850s gold fever hit central Victoria when prospectors from around the world rushed to the region, which at the time was producing most of the world’s gold.
Dubbed the “Golden Triangle,” the area encompasses the historic gold mining towns of Ballarat and Bendigo and stretches west to Stawell, which is 240 kilometres west of Melbourne. Since that time, the region has produced over 70 million ounces of gold, which in today’s pricing is worth around $80 billion.
While the area is known for its golden past, with the height of excitement peaking a century ago, gold continues to be discovered in the region ... and there’s plenty left still to discover.
One company who has done just that is Navarre Minerals (ASX:NML). NML has two gold projects within the Golden Triangle and has discovered significant gold mineralisation at both: its early stage Stawell Corridor Gold Project and its more advanced Tandarra Gold Project.
Tandarra is a confirmed discovery under shallow cover in what NML believe could be part of a new goldfield emerging in central Victoria with opportunities for open pit and underground mining.
It’s a theory backed up by seasoned resource journalists such as Barry Fitzgerald, who posits: “ The broader central Victoria region is home to more than 80 million ounces of historical gold production , most of it before the First World War... As Fosterville – itself a historic gold producer following its discovery in 1894 – has demonstrated, there is good reason to think there is a lot more gold to come.
Speaking of Fosterville, NML’s Project is in extremely good company, located next door to the 4 million ounce Fosterville Gold Mine – Victoria’s largest and highest grade gold mine which has put Victoria back on the map in terms of attracting interest from North America.
Toronto listed Kirkland Lake Gold, NML’s largest shareholder, has just discovered more than a million ounces of gold worth $1.1 billion at its Fosterville Gold Mine .
The Fosterville mine has also achieved record quarterly production and announced that it had doubled underground Mineral Reserves, to 1,030,000 ounces.
Given its proximity and relationship to Fosterville, NML will be hoping for similar gains and it would certainly come into notoriety if it did so, with the Victorian government already interested in what is happening in the region having provided nearly $140,000 to Fosterville in its TARGET program.
However at the same time, NML is still an early stage play and there is no guarantee this company will make a significant discovery, so if considering this stock for your portfolio seek professional financial advice.
Last quarter, a shallow RC drilling programme to test the potential for open pit mineralisation at the Tandarra Gold Project’s Tomorrow Zone by Navarre’s partner Catalyst Metals (Catalyst has 1 year remaining of a 4-year deal to earn a 51% interest in Tandarra by spending a total of $3M on the property) has encountered several outstanding high-grade gold intersections, such as:
- 11 metres at 17.8 g/t gold from 47 metres
- 17 metres at 6.6 g/t gold from 30 metres
- 21 metres at 6.9 g/t gold from 27 metres
The gold mineralisation of the Tomorrow Zone starts at less than 20 metres from the surface, has peak gold grades of up to 98.4 g/t and contains many confirmed wide zones of gold mineralisation averaging greater than 5.0g/t gold.
NML’s other project is its up and coming 100%-owned Stawell Corridor Gold Project located 15 kilometres south of Stawell’s four million ounce Magdala gold deposit. The project area captures 70 kilometres of strike of the prospective Stawell Corridor and includes the historic 1 million ounce Ararat Goldfield. The prime focus of Navarre’s activity in this corridor is the Irvine Gold Project, a potential Magdala look-alike.
To highlight the Stawell Corridor’s potential, Magdala produced 4 million ounces of gold from a 3-kilometre strike length and Navarre’s Project has a current strike of 8 kilometres – which may be extended. Navarre is looking for Magdala’s ‘big brother’.
The Irvine Gold Project lies at the northern end of the Ararat Goldfield, which produced an estimated one million ounces of gold from 1854 to 1925, mainly from alluvial and deep lead production.
Production of primary hard-rock gold from the Ararat Goldfield was low given the richness of the alluvial deposits, in stark contrast to the Stawell Goldfield, and is one of the reasons why NML is searching for economic primary gold mineralisation close by to the richest alluvial gold deposits. Gold, being heavy, does not move far from its source and Navarre believes it is honing-in on the prize.
When we last updated you on NML in December 2016 , highly encouraging assay results had just been received from the Company’s maiden 4,900 metre aircore (AC) drilling program at Irvine heralding a new discovery.
The results confirmed the Company’s exploration model about the presence of shallow primary gold mineralisation of the Stawell-style at Irvine.
Stawell-style gold orebodies are highly prized because the gold is fine-grained, more continuous and predictable, and extend to a greater depth than gold mineralisation typically found in Victoria’s other goldfields, such as those at Bendigo and Ballarat.
Gold mineralisation of the Stawell-style occurs as multiple significant ‘lodes’ or ‘zones’ along the margins of large basalt dome structures – the priority Resolution Lode has a strike length of 800 metres which remains open to the north and at depth. The basalt structures are rigid and do not deform as much as the surrounding sediments. The deformation leads to the creation of voids allowing quartz veining and gold mineralisation to form around the basalt margins.
Results from this first drilling program gave confidence to intensify the hunt for additional zones of significant gold mineralisation in other areas adjacent to the flanks of the Irvine basalt dome.
NML has since progressed to diamond drilling. Ten diamond holes have now been completed for about 2,500m of drilling with 500 metres of the program still to be completed later in the year.
Several outstanding gold results were returned from this drilling including:
- 7 metres at 7.1 g/t gold from 196.3 metres
- 0 metres at 9.8 g/t tonne from 72.0 metres
- 9 metres at 12.9 g/t gold from 79.7 metres
NML aims to be a significant multi-project gold company and with the Stawell Corridor and Tandarra Projects shaping up the way they are, the Company is extremely well placed.
Catching up with....
Navarre Minerals (ASX:NML) is an Australian-based resources company with a portfolio of early to advanced stage gold and copper projects in Victoria.
You can see NML’s two projects within the Golden Triangle below, along with nearby $2 billion-capped Kirkland Lake’s (TSE:KL) Stawell Gold Mine (now on care and maintenance) and Fosterville Gold Mine – Kirkland Lake is NML’s largest shareholder.
NML’s goal is to deliver a potential multi-million ounce gold deposit from within its exploration assets.
The company’s strategy to achieve this goal is to target gold mineralisation next to multi-million ounce gold mines by drill testing the Irvine Gold Project for Stawell-style deposits. And secondly, to advance the high-grade Tandarra Gold Project through its farm-out to Catalyst Metals.
You can see NML’s portfolio of Victorian gold projects mapped out below, followed by a list of the company’s mineral tenement holding (at 30 June 2017).
Irvine Gold Project
NML’s Stawell Corridor Gold Project comprises two exploration licences incorporating the historic alluvial Ararat Goldfield perched on top of the Irvine basalt dome and four under-cover basalt dome targets in the southern Tatyoon licence. The company is searching for gold deposits in the extension of a corridor of rocks that host the Stawell and Ararat goldfields with combined historic production of approximately 6 million ounces of gold.
The discovery of outcropping gold at the Irvine Gold Project is a prime focus for NML this year. This project is located 15 kilometres south of the Stawell Gold Mine, now on care and maintenance, which is owned by Navarre’s largest shareholder and leading Victorian gold producer, Kirkland Lake Gold Ltd.
Below is a map of the project showing its proximity to the Stawell (~5 million ounce) and Ararat Goldfields (~1 million ounce). NML’s tenement holding is shown within the black outlined section.
The project’s geology is analogous to Stawell’s Magdala gold deposit. The yellow shapes denote the location of various basalt dome targets NML is investigating south of Stawell for the presence of commercial gold.
The Magdala Gold Mine, now on care and maintenance, is one of Victoria’s most successful modern gold mines with a 30-year history of continuous gold production and an estimated 2,500-4,000 ounce gold endowment per vertical metre.
The fact that NML identified its tenements as having very similar characteristics to Magdala, is, alone, a strong basis to launch further investigation.
Here’s a closer look at the Stawell Granite and its surrounds that shows the symmetry of structure and location for the Stawell Gold Mine and NML’s prospects within the Ararat Goldfield.
The Stawell Fault located at the Irvine Gold Project is interpreted as the equivalent fault to that near Magdala based on structural re-construction.
Navarre has significantly progressed its geological interpretation of the Irvine basalt dome since June 2015 (diagram above, when the Irvine Gold Project was called “Irvine’s Prospect”) with the discovery of the Resolution Lode and highlighting the historical alluvial gold footprint of the 1Moz Ararat Goldfield:
NML commenced its first diamond drilling program of ~3,000 metres at Irvine in March this year, targeting potential depth and strike extensions to earlier identified shallow oxide gold mineralisation (now called Resolution Lode), which you can read about in our sister publication below.
This discovery is known as the Resolution Lode, which is just one small part of the multi-lode model NML is applying to the 15km long Irvine Gold Project.
The gold mineralisation of the Resolution Lode had earlier been confirmed over a strike length of 800 metres and remains open to the north and at depth.
NML’s plan for targeted diamond drilling came after significant drill intercepts were encountered during the initial air-core drilling program, including six metres grading 6.3 grams per tonne gold, six metres grading 4.2 grams per tonne gold and two metres grading 41.5 grams per tonne gold.
These early results already highlighted the potential for significant gold deposit mineralisation, 15 kilometres south of Stawell’s four million ounce Magdala gold deposit.
However, whether it can achieve this is speculation at this stage, so do your own research and apply caution to your investment decision if considering this stock for portfolio.
Drilling confirms multiple gold zones at Irvine Gold Project
NML received positive results from its recently completed drilling programmes at its Irvine Gold Project.
Regional ‘proof-of-concept’ AC drilling validated its multiple-lode exploration model at the project. This drilling successfully tested two new targets (John Bull and Hospital Hill – see below) with similar geochemical signatures to its priority Resolution Lode discovery:
Gold mineralisation at the priority Resolution Lode remains open to the north and at depth of previously reported RD006 and RD002:
- 7m @ 7.1 g/t gold from 196.3m (RD006)
- 0m @ 9.8 g/t gold from 72.0m (RD002)
Additional diamond drilling confirms continuity of the mineralised structure. New results include:
- 5m @ 5.2 g/t gold from 105.1m (RD005)
- 8m @ 5.6 g/t gold from 127.6m (RD006)
Here is a longitudinal projection (side view looking west) of the Resolution Lode showing recent diamond drill intercepts and the interpreted plunge of gold mineralisation:
Here is a plan view (looking down)of the Resolution Lode showing recent diamond drill intercepts and interpreted basement geology at surface:
Planning is underway for the next phase of drilling at Resolution Lode.
Regional Drilling at Irvine Gold Project
Over at the nearby Hospital Hill and John Bull prospects, which are located two kilometres south of Resolution Lode, ‘proof of concept’ AC drilling has discovered new shallow gold mineralisation.
The drilling intersected broad alteration zones containing multiple gold-bearing structures with down-hole widths of up to 70 metres that are open at depth and along strike.
The first pass results were positive and comparable to the margins of the Resolution Lode, which is further north on the Irvine basalt. Significant intercepts include:
- 3 metres at 2.0 g/t gold from 18 metres (IAC139) – John Bull
- 1 metres at 2.3 g/t gold from 36 metres (IAC139) – John Bull
- 3 metres at 1.2 g/t gold from 2 metres (IAC151) – John Bull
- 3 metres at 1.0 g/t gold from 14 metres (IAC140) – John Bull
- 3 metres at 1.5 g/t gold from 69 metres (IAC134) – Hospital Hill
A follow-up diamond drill hole at Hospital Hill intersected a broad quartz-sulphide zone with gold grades up to 5.3 g/t.
These results validate NML’s multi-lode exploration model for the project to host significant gold mineralisation along both flanks of the +8km long Irvine basalt dome.
These new gold prospects have similar geology to the Resolution Lode which in turn appears analogous to the multiple lodes that comprise the four million-ounce Magdala gold deposit at Stawell.
Based on these early and extremely positive results, NML will intensify the hunt for additional zones of significant gold mineralisation in other areas adjacent to the flanks of the Irvine basalt dome.
NML’s co-funding agreement with the Victorian Government – TARGET Minerals Exploration Initiative
This diamond drilling forms part of the exploration activity covered by NML’s co-funding agreement with the Victorian Government under the TARGET Minerals Exploration Initiative.
Upon completion of the first agreed milestone of the TARGET Minerals Exploration Initiative co-funding grant agreement NML received $55,000 from the Victorian Government by way of reimbursement of exploration expenditure at the Irvine Gold Project.
A further $137,000 was received on completion of the second TARGET milestone. Then upon satisfactory completion of the third milestone, NML expects to receive up to $365,000 from the Victorian Government.
The third milestone deliverable date has been deferred to February 2018 to allow sufficient time for NML to complete the planned exploration activities, including final reporting to the Victorian Government, at the Irvine Gold Project.
The Tandarra Project was also awarded a Victorian Government TARGET co-funding grant of up to $224,700 for a geophysics and air-core drilling programme.
New high-grade gold mineralisation at Tandarra Gold Project
The high-grade Tandarra Gold Project in central Victoria is targeting the next generation of gold deposits in basement rocks under shallow cover, located 40 kilometres north of the 22 million ounce Bendigo Goldfield and 60km northwest of the Fosterville Gold Mine.
NML anticipate Tandarra to be part of a potential new goldfield emerging in central Victoria with opportunities for open pit and underground mining.
It is a greenfields (virgin) gold discovery located within the North Bendigo Zone that covers an area of about 7,600 square kilometres which the Victorian Government estimates has an undiscovered gold endowment of about 32 million ounces.
The project manager, Catalyst Metals (ASX: CYL), has the right to earn a 51% equity interest in the Tandarra Gold Project under a farm-in agreement by exploration expenditure of $3 million up till September 2018.
A RC blade drilling programme at the project’s Tomorrow prospect has intersected several outstanding new thick, high-grade gold intercepts.
Gold mineralisation at depths of less than 20m from surface with peak gold assays up to 98.4 g/t Au and wider zones of gold averaging greater than 5g/t of gold were returned. The best intersections were:
- 11m @ 17.8 g/t gold from 47m (RCT172)
- 17m @ 6.6 g/t gold from 30m (RCT173)
- 21m @ 6.9 g/t gold from 27m (RCT177)
More detailed results are available in this Catalyst Metals announcement , while confirmatory bulk leach re-assays for gold zones are awaited.
Below is the area of recent RC Blade drilling at the Tomorrow prospect:
Here is a zoomed-in look at the Tomorrow and Macnaughtans Gold Trends:
This is a longitudinal projection of the Tomorrow prospect showing the 2017 drilled area. Recent intersections are highlighted in blue.
Here is a cross section showing some of the higher grade samples:
$1.4m capital raising completed
NML announced on June 30 that it had completed a $1.4 million capital raising . The funds raised will go towards the next stage of the company’s exploration and evaluation activities at its Irvine Gold Project and for general working capital purposes.
This brought the company’s cash position to $1.75 million at 30 June, up from $1.4 m at 31 March.
Plenty of news flow on the horizon for investors
NML is ploughing ahead with its exploration plans at both its 100% owned Irvine Gold Project and its Tandarra Gold Project, which is being managed by Catalyst Metals.
However, success here may not eventuate and no investment decision should be based on this type of speculation alone. If you are considering investing in this stock, seek professional financial advice.
Over the coming months, NML will complete modelling of the Resolution Lode, particularly the gold zones at its Irvine Gold Project. NML also has plans for the next phase of drilling at Resolution Lode as well as the next phase of AC drilling over regional targets, namely the John Bull, Hospital Hill, Cullings, Napoleon and Dutton targets.
Upcoming news flow in regard to Tandarra is anticipated to include receiving the confirmatory bulk leach re-assays for gold zones at the Tomorrow gold prospect. Modelling of shallow gold zones recently intersected at the Tomorrow will be undertaken. It is expected that Catalyst Metals will also plan and prepare for Victorian Government TARGET co-funded exploration programs.
Clearly there is plenty of upcoming news flow to follow the recent strong results from both of NML’s Victorian gold projects. Investors would be wise to consider the upside on offer as the company progresses its two premier projects. NML’s current market cap is only around $9 million with potential for a near term re-rating.