Kaiser Reef becomes latest gold explorer to debut on ASX

Kaiser Reef ASX KAU IPO Stuart Town gold
Post-listing Kaiser Reef will advance the Stuart Town gold project, which is 40km from Australia’s largest gold mine operated by Newcrest.

Kaiser Reef is the latest junior gold explorer to take advantage of the ongoing positive gold sentiment with an ASX debut scheduled for Friday after raising $4.5 million in its IPO.

The company issued 22.5 million shares at $0.20 each, giving investors the opportunity to secure exposure to a “highly prospective” large-scale Stuart Town gold project in New South Wales.

Under an agreement inked in September last year, Kaiser will gain ownership of the NSW project by acquiring private entity Chase Metals.

The transaction is set to be completed after Kaiser has been officially admitted to ASX quotation under its new ticker code KAU.

Background to Stuart Town gold project

Kaiser’s primary asset will be Stuart Town, which is located in a goldfield with more than 80 recorded historic mines and includes an exploration licence and an exploration licence application.

The project is 40km from Newcrest Mining’s (ASX: NCM) Cadia operation, which is Australia’s largest gold mine with resources of 42 million ounces of contained gold and 8.7 million tonnes of copper.

Stuart Town is also 20km from Alkane Resources’ (ASX: ALK) Molong project, which hosts the Boda copper-gold discovery where drilling unearthed 502m at 0.48 grams per tonne gold and 0.2% copper.

At Alkane’s nearby Kaiser prospect, drilling uncovered 40m at 1.3g/t gold from surface.

It is believed mining first began at Stuart Town in the 1850 and continued through to 1875.

Despite no records on the actual production from the project between 1851 and 1875, Kaiser believes it was “significant”.

However, records between 1875 and the early part of the 20th Century indicate gold production of about 170,000 ounces.

The records also reveal historic head grades between 25-30g/t gold.

A Rio Tinto (ASX: RIO) entity has previously explored the area, which returned “encouraging” results from soil sampling.

Most of the exploration focused on Cadia-style deposits.

Additionally, Mount Isa Mines subsidiary Carpentaria Exploration undertook a review of magnetic and radiometric data and noted a possible anomaly that could be a source of gold.

However, this anomaly is yet to be drilled.

In an independent geologist’s report on the project, Snowden Mining Industry Consultants noted limited drilling had been undertaken at the project. Its observations of the drilling also suggest it was “hastily conceived” and focused on meeting tenement expenditure requirements rather than a geological strategy.

Advancing Stuart Town

Under Snowden’s recommendation, Kaiser has allocated $2.5 million towards exploration activities at Stuart Town over the next two years.

Exploration for the first year will comprise detailed mapping, geophysical surveys and reverse circulation drilling, with a budget for the period of $1.08 million.

In the second year, Kaiser will undertake more detailed mapping along with RC and diamond drilling. This has an estimated cost of $1.42 million.

Potential acquisitions

As part of Kaiser’s growth strategy, it has indicated it would look at acquisition opportunities – primarily gold and base metals within Australia.

However, at the time of listing, Kaiser had not identified any opportunities.

Driving Kaiser

Leading Kaiser’s growth strategy and exploration at Stuart Town is a board comprising Adrian Byass as non-executive chairman, Jonathan Downes as executive director and David Palumbo who is both a non-executive director and company secretary.

Mr Byass is currently on the board of several other companies including: Infinity Lithium Corporation (ASX: INF), Galena Mining (ASX: G1A), Kingwest Resources (ASX: KWR) and Corazon Mining (ASX: CZN).

He was also the final chairman of beleaguered gold junior Orinoco Gold (ASX: OGX), taking up the appointment after the sudden departure of previous directors who left under rumours of gold theft and allegations of illegal conduct.

Shareholders had nominated Mr Byass as a last-ditch attempt to turn the company around less than two months before it fell into administration in April last year.

Meanwhile, Mr Downes has more than 25 years’ experience in the mining sector and has worked with nickel, gold and base metals.

Similar to Mr Byass, Mr Downes is on the boards of Galena, Kingwest and Corazon. He was also a founding director of Hibernia Gold (renamed Moly Mines, which was delisted in 2017), Ironbark Zinc (ASX: IBG) and Siberia Mining Corporation, which was acquired by Monarch Resources.

Mr Palumbo has more than 14 years’ experience across company secretarial, corporate advisory, and financial management and reporting of ASX-listed entities.

He is also a director of Krakatoa Resources (ASX: KTA).

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