Ausgold solves Katanning ‘puzzle’ with new intercepts

Ausgold (ASX: AUC) on Wednesday reported multi-kilometre gold intercepts along Western Australia’s Stanley Thrust.

Step-out drilling at the Katanning gold project (KGP) produced results that suggest a possible gold district, executive chairman John Dorward said in a press release. He called them “the last piece of the puzzle” in Ausgold’s exploration campaign.

Among the highlight intersections at the Zinger target are 10 metres at 4.75 grams gold per tonne from 23 metres and 51 metres at 0.37 gram gold from 17 metres depth. Another interval measured 38 metres at 0.47 gram gold from 68 metres depth, plus continuous mineralization over 6 km at Stanley Hill, Moulyinning and McDougalls.

The results “show a mix of high-grade and shallow bulk mineralization – all within 40 km of the main KGP pit, SCP Resource Finance mining analyst Brandon Gaspar wrote in a note. The regional upside “points to further discoveries” ahead of the definitive feasibility study (DFS) due next month, the analyst said.

The company controls over 3,500 sq. km of tenements in the southwest Yilgarn region of Western Australia, covering more than 100 km of underexplored greenstone strike. That tenure exceeds peers De Grey Mining (ASX: DEG) with 10,000 sq. km, Regis Resources (ASX: RRL) with 2,635 sq. km and Gold Fields (JSE: GFI) takeover target Gold Road Resources’ (ASX: GOR) 3,039 sq. km of staked lands. Ausgold is looking to feed its mill from both the KGP and emerging satellite deposits.

Ausgold’s Sydney-listed shares rose 5.6% to A66¢ apiece Wednesday, having tested A25¢ and A68¢ in the past 12 months.

Aiming high

KGP, located 275 km south-east of Perth, sits at the centre of Ausgold’s strategy. A feasibility study to demonstrate a 3.6 million tonne per year carbon-in-leach plant and a 10-year mine life remains on track, the company said. Project permitting and land access are advancing in parallel.

These results extend Ausgold’s narrative from single-asset developer to district-scale builder, it said. By linking regional discoveries to a funded feasibility study at Katanning, the company is aiming to become Australia’s next mid-tier gold producer.

Ausgold raised A$38 million ($34.2 million) in equity last year to fund the Katanning DFS through to a final investment decision and recently acquired another 10 sq. km of freehold land to optimize the site layout and future expansion.

Bulk tonnage

In-fill drilling at Dingo returned 10 metres at 10.6 grams gold per tonne from 42 metres depth and 22 metres at 2.2 grams gold per tonne from 117 metres, exceeding the existing resource grade. Diamond drilling at Datatine is testing down-plunge shoots with results due this quarter.

Drilling continues across many fronts. The 19,000-metre drill program includes 7,000 metres of in-fill drilling at the Central Zone. There are also 5,000 metres of drilling in the Southern Zone, while another 7,000 metres are planned across seven regional prospects.

A Sept. 2023 KGP resource estimate, reported at a 0.5 gram gold per tonne cut-off, stands at 88.9 million tonnes at 1.1 grams gold for 3.04 million ounces. That comprises 38.1 million tonnes at 1.1 grams gold for 1.4 million oz. in the measured category, 31.8 million tonnes at 1 gram gold for 1.1 million oz. indicated, and 18.9 million tonnes at 1 gram gold for 620,000 oz. inferred.

Probable reserves, reported at a 0.6 gram gold per tonne cut-off on the same pit-constrained basis (A$2,200 per oz. gold price), total 32 million tonnes at 1.25 grams gold for 1.28 million oz. of metal.