It is probably one of more hopeful developments in Victoria at present: after several false starts in recent decades, the revival of the state’s gold story is well underway and with another player — North Stawell Minerals (ASX: NSM when listed) — now raising $20 million.
The North Stawell initiative has brought another plus: it is breaking a relative drought of new mining floats and will, if successful, be only the fifth successful one on the ASX this year, the others being gold and silver producer Manuka Resources (ASX: MKR), Lachlan Fold Belt gold hunter Kaiser Reef (ASX: KAU) and copper-gold players Cobre (ASX: CBE) and Castile Resources (ASX: CST).
The initial public offering of 40 million shares at $0.50 per share is being led by the 54% owner Leviathan Resources, part of the well-known Victor Smorgon Group. The present majority shareholder will dilute to a 36% stake following the listing of North Stawell, scheduled for September. The IPO is due to close on 28 August.
The group was built over the years by the late Victor Smorgon and activities ranged across many industries including steel, meat exports, plastics and glass. It had its origins with Victor Smorgon’s father who, after arriving in Melbourne in 1927, opened a kosher butcher’s shop.
North Stawell Minerals was established to explore north of the Stawell gold mine, which has produced more than 5 million ounces of gold.
The company’s prospectus notes that Stawell is “acknowledged to be the corner point of Victoria’s ‘Golden Triangle’, responsible for more than 66Moz of combined historical production”. The other points of the triangle are at Bendigo and Ballarat.
Potential for discovery of large mineralised system under cover
The new company’s granted tenure covers 261.9sq km with another 291sq km under application. It has struck a cooperation deal with associated company Stawell Gold Mines (SGM) to share facilities and expertise.
North Stawell Minerals chairman Jerry Ellis said the company believes there is the potential for the discovery of a large gold mineralised system under cover.
It will use SGM’s Magdala orebody as an exploration model to test 51km of northerly strike extension of the known Stawell Mineralised Corridor. This corridor extends over 250km of strike length.
SGM is mining Magdala, which historically was worked from 1868 until 1918 and yielded 315,417oz gold. The shaft was the deepest on the Stawell Goldfield.
By 1903, the original miner of Magdala was the only Stawell company still mining profitably, but it closed in 1917. There was an unsuccessful attempt to revive the company in the 1930s.
North Stawell Minerals has inherited a “significant” Magdala geological database.
So far, it has 43 gold targets for which it plans systematic exploration. One of its tenements has a JORC resource of 875,000 tonnes at 2 grams per tonne gold for 55,000oz (using a 1g/t cut-off grade).