Could western Victoria become a world-class copper and gold mining province?

Western Victoria gold copper mining ASX Stavely Minerals Kirkland Lake Navarre Nagambie Resources
Kirkland Lake Gold's Fosterville Mine, located 20km from Bendigo, is the largest gold producing mine in the state of Victoria.

Sometimes all it takes for a lot of wealth to be created is for a fresh understanding of something that has always been there.

That is particularly the case for western Victoria, which could well be on the cusp of becoming one of the world’s big copper and gold provinces, should the theory about very large deposits at depth prove to be the case.

Stavely Minerals (ASX: SVY)

Central to the revolution is Chris Cairns, managing director of Stavely Minerals which has been pursuing the concept of a large porphyry copper and gold discovery lying underneath its Thursday’s Gossan project near Glenthompson since it listed in 2014.

It has long been known that there is an inferred shallow copper resource of around 28 mt at 0.4 per cent copper for about 110,000t of contained copper but it is the potential riches beneath that Chris Cairns spied when he first laid eyes on the core samples of Thursday’s Gossan.

Share price graph tells the story

Just looking at Stavely’s share price graph is enough to show the story of the company – from a rush of true believers at the start through the long and hard times of coming to grips with the vagaries of confusing drill results as the geologists came to understand the deposit further to a fresh rush of interest now after some truly impressive copper intersections from deep diamond drilling.

Stavely Minerals ASX SVY share price chart

Whether western Victoria now becomes another Kalgoorlie as Chris Cairns believes or something a little less than that could well be decided by some of the drilling results Stavely produces next, which the company believes could be even stronger than the encouraging 283 metre intersection grading 0.16 per cent copper that has set the market alight.

That unusually long intersection is typical of large, low grade copper porphyry’s – large crystal-like ore bodies formed from volcanic molten rock that provide the vast bulk of the world’s copper.

Some of the other drilling results included a thick porphyry copper-gold intersection with best results including 24m at 0.64 per cent copper and 1.2g/tonne gold, and 124m at 0.31 per cent copper and 0.12g/tonne gold.

Cadia-Ridgeway another example

Another Australian example of this type of deposit is the Cadia-Ridgeway mine in NSW which so far has yielded 4.5 million ounces of gold and 483,000 tonnes of copper.

If the geological model holds up the next drill samples could be even better as Stavely pursues what it hopes is a high grade copper-gold porphyry core.

It would certainly be highly transformative for the canola and wheat fields near the Grampians in western Victoria where Stavely is drilling, potentially turning them into one of the world’s large copper mines.

That would not only project Stavely into the big time but also potentially cause a re-rating of other copper and gold explorers in Victoria, some of which we are looking at later in this story.

Also providing a following wind for investors is the rebound in copper prices and the realisation by investors that head grades at the world’s copper mine are falling – making the search for large scale, new mines even more urgent.

Stavely is now raising $8.3 million to fast track exploration so now there is just the nervous wait for the next crop of drill results to see if Victoria’s west can live up to the promise of the previous gold rushes the state enjoyed in the 1850’s and 1860’s.

ASX listed resources companies in western Victoria

So who are some of the other listed players with potential in the area?

Kirkland Lake Gold (ASX: KLA)

It is often forgotten that Canadian based Kirkland Lake Gold already operates one of Australia’s premier gold mines – the Fosterville underground mine not far from Bendigo.

They own significant exploration properties in the region and also once owned the Stawell mine, so are heavily represented in Victoria and are well aware of the state’s potential.

Kirkland Lake are also not scared of investing, extending the Fosterville mine further underground into the Eagle zone which contains high-grade visible gold, significantly boosting the mine’s mineral reserve grade, production and cost profile.

Further exploration has identified similar visible gold zones and underground gold reserves are now above 1 million ounces.

Kirkland Lake Gold chairman Eric Sprott was heavily involved in the Pilbara conglomerate gold rush of last year, investing serious cash to grab stakes in players such as Canadian listed Pilbara explorer Novo Resources, Kairos Minerals and De Grey Mining.

Mr Sprott also personally owns around 12 per cent of Novo, while Kirkland owns an 11 per cent shareholding in Navarre Minerals.

Navarre Minerals (ASX: NML)

Navarre Minerals is another company that has had success with some unconventional gold exploration in Victoria, with its plan to search for near surface gold bearing quartz sulphide structures meeting with success.

Navarre’s Irvine project has led to some excellent discoveries so far, including the high-grade Resolution Lode and another quartz-sulphide structure that included results such as 5 metres at 3.2 g/t gold from 53 metres, 7 metres at 2.8 g/t gold from 36 metres and 2 metres at 3.8 g/t gold from 26 metres.

Navarre is aiming to eventually develop the Irvine project into a multi-million-ounce gold deposit similar to the nearby 4 million ounce Magdala gold project in Stawell.

Stawell-style gold orebodies are sought after because the fine-grained gold is more continuous and extend to a greater depth than the “nuggetty” style of gold mineralisation typically found at Victoria’s traditional goldfields.

Nagambie Resources (ASX: NAG)

Nagambie Resources has been in the news for plans to possibly dump up to 2 million tonnes of potentially contaminated spoil from the Melbourne Metro rail tunnel and use it to fill in two giant disused mining pits in central Victoria.

The former gold mining pits in rural Nagambie, one of which is more than 900 metres long and 50 metres deep, have been closed for more than two decades and are full of salty water.

The idea is to dump the potentially acidic spoil in the slightly alkaline pits, thereby safely storing the waste underwater.

However Nagambie Mining is also a serious gold explorer, looking to discover and develop shallow, open-pit and heap leachable gold deposits.

It controls a range of tenements in historic Victorian goldfields at Nagambie, Clonbinane, Redcastle and Rushworth.

Nagambie Mining discovered Wandean, 9 km north west of the Nagambie Mine, which looks amenable to heap leaching and produced a stellar gold intersection of 37.8 g/t gold.

Taken together with the Apollo deposit at Clonbinane, Nagambie’s combination of discovery expertise and extensive gold tenements make it an easy choice to add to our list of potentially re-rateable Victorian gold and copper explorers.

John is a highly experienced business journalist and formerly chief business writer for the Herald Sun. He has covered Federal politics in Canberra, was Los Angeles Bureau chief for News Limited and was also chief of staff for the Herald Sun. He has covered a wide range of small and large cap ASX stocks and has a special interest in mining, technology and biotech.