The global spotlight has shone on Western Australia once again after RNC Minerals’ (TSX: RNX) recent “spectacular” high-grade gold haul from its Beta Hunt mine in Kambalda stirred up a frenzy with media and investors alike.
However, nearby nickel explorer Mincor Resources (ASX: MCR) managing director Peter Muccilli said the discovery did not come as a surprise.
Mr Muccilli told Small Caps the presence of this bonanza-style gold mineralisation had been “well-known in the district for many years”.
“The gold setting at Beta Hunt is part of the greater Boulder Lefroy Fault Complex which runs through North Kambalda right through to South Kambalda and hosts much of the nickel-gold mines,” Mr Muccilli explained.
“The eastern goldfields are incredibly well endowed with nickel and gold and it is no surprise to me to see an area which keeps on giving value to people who work it.”
Mr Muccilli pointed out that Gold Fields’ (JSE: GFI) St Ives gold operation lies on the same Boulder Lefroy Fault Complex and has been mined for gold for many years, giving up more than 10.5 million ounces of the precious metal since it began operating.
Mincor’s own North Kambalda assets lie on the fault and the company has firmed up gold anomalies and targets within these tenements.
“We only got the gold rights to it in July 2016. We’ve put out announcements about gold at North Kambalda before and it is definitely an area, in the fullness of time, that we’ll be testing.”
Mr Muccilli said he hopes a lot more discoveries like RNC’s gold haul are made.
Other companies in the area
Mincor and Gold Fields aren’t the only companies with assets in the region, with Independence Group’s (ASX: IGO) Long operation placed on care and maintenance during the June quarter after final ore reserves were mined.
Long has been mined since the 1970s, with Western Mining Corporation operating the asset until 1999. Independence Group secured the mine in 2002 and extracted around 137,000t of nickel during its 16 years of ownership.
Although on care and maintenance, Independence Group has committed funding to exploration in the area, which could breathe new life into the asset.
Meanwhile, Panoramic Resources (ASX: PAN) owns the nearby Lanfranchi nickel mine that has been on care and maintenance since 2015.
Panoramic managing director Peter Harold told Small Caps RNC’s gold haul was a “fantastic discovery”.
“I hope RNC finds a lot more and it sparks renewed gold exploration activity around Kambalda – it would be good for the town.”
Similar to Mr Muccilli, Mr Harold said it was not uncommon to find gold in Kambalda. He added that gold has been identified at Lanfranchi in the past, but the rights belonged to Gold Fields.
“It will certainly lead to more interest in Kambalda,” Mr Harold noted.
Traditionally, the region has been primarily exploited for nickel. It remains to be seen if other nickel plays will begin actively exploring for that “spectacular” “once in a lifetime” bonanza gold find that could see them pulling out $16 million-worth of gold out of the ground in just four days like RNC at Beta Hunt.
RNC’s $16m gold haul
RNC’s wholly-owned subsidiary Salt Lake Mining operates Beta Hunt and unearthed the huge 9,640oz gold haul, which included a 95kg specimen stone containing 2,440oz gold and a 63kg stone with 1,620oz gold.
Miners recovered about 190kg in total of specimen stones, with final ounces to be determined once the gold has been processed and/or sold.
RNC anticipates the discovery will bring in about C$15 million ($16.03 million) in cash.
“Recovering [more than] 9,000oz of high-grade coarse gold from a single cut on the 15 level at our Beta Hunt mine, including specimens, which could rank among the largest ever discovered, underlines the importance of this discovery,” RNC president and chief executive officer Mark Selby said.
“Just eight weeks earlier, at the end of June 2018, 1,500oz of high-grade gold was recovered from other sediment structures on the 14 and 15 levels,” Mr Selby added.
Commenting on the haul, RNC vice president of project development Kevin Small said RNC had produced the equivalent of two months’ gold production in just four days.
Mr Small pointed out the haul’s median grade of 2,300g/t was about 900% higher than the average grade mined throughout 2018.
During the 2017 calendar year, Beta Hunt brought in around C$34,987 from gold sales and C$6,016 from nickel.
However, RNC struggled to make ends meet at Beta Hunt and the asset was put up for sale in March.
But this latest haul, which generated almost half a year’s income, may change RNC’s path.
Mr Selby told Small Caps on a conference call that the company was now evaluating all its options including spinning out the asset into a new entity.
“We believe it is one of the most outstanding discoveries, not only in Western Australia, but globally,” Mr Selby added.
The Beta Hunt mine
Beta Hunt has been exploited for its nickel for decades, producing around 153,500t of nickel up until 1998.
RNC says it is the first owner to drill deeper into the Lunnon Basalt searching for gold.
According to Mr Small, previous bonanza grade specimen stone discoveries at Beta Hunt were associated with the nickel-sulphide bearing contact between the Lunnon Basalt and the overlying Kambalda Komatiite which has been mined for nickel in previous years.
RNC has evaluated drilling and mapping data and has identified two or more Lunnon sediment bands below the Lunnon Basalt/Kambalda Komatiite nickel contact.
The company’s geologists theorise the zone where the gold has been discovered was created via a chemical interaction between the gold bearing fluids and pyritic sulphides, which under certain conditions result in large gold crystal growth and “extremely high-grade gold deposition”.
RNC anticipates a better understanding of the mineralisation will allow it to find more high-grade gold material.
Next steps at Beta Hunt
Mr Small said the different gold zones are well known in the area with Gold Fields currently the only miner in the region exploiting them.
He pointed out that the Kambalda region has delivered more than 12Moz of gold since the mid-80s.
RNC’s geologists anticipate there could be up to 10km of combined strike made up of four 2km-plus structures.
“We are well-positioned to begin a large exploration program to improve the overall resource grade, due to the amount of development that was done, not only by ourselves, but our predecessors,” Mr Small said.
“[Additionally], grades are increasing with depth. Potentially, it is a one off, but mother nature has some pleasant surprises, and this is definitely one of them.”
Meanwhile, Mr Selby added there was “tremendous exploration potential” at Beta Hunt.
“Now, with this additional cash, and the potential for additional cash going forward, it gives us additional options to look at like spinning out the business into a separate entity.”
“We will look at all these alternatives over the coming months and year.”
Mr Selby added the company would continue exploring for similar discoveries at Beta Hunt and he hoped there will be a lot more going forward.