Since Alkane Resources unearthed the Boda prospect in the East Lachlan region in New South Wales last year, prospective gold miners have flocked to the area in the hope of making another discovery of the same quality. Salomae Haselgrove explores the East Lachlan’s promise.
When Alkane discovered the significant porphyry gold-copper mineralisation at Boda, it was comparable with Newcrest Mining’s Cadia Valley site, the largest mine in the East Lachlan region and one of Australia’s most successful operations.
During the 2020 financial year, Cadia Valley produced 843,000 ounces of gold and 96,000 tonnes of copper at industry-leading production costs.
Alice Queen, a junior company active in the region, has the unique and lucky advantage of having former Newcrest chief geoscientist John Holliday as its chief technical advisor.
Holliday’s claim to fame during his 30-year career with Newcrest was being the geoscientist that discovered the Cadia Valley porphyry gold resource.
Having someone with Holliday’s expertise and knowledge gives Alice Queen managing director Andrew Buxton confidence in the company’s quest of unearthing another prospect with the chemical makeup of Cadia.
“As Alice Queen works to find the next Cadia, the best place to start is to have the person who discovered the first one working for you,” Buxton tells Australian Mining.
“It certainly gives us the confidence to talk to the analysts in a way other companies can’t, we can’t be smarter or do any less work but having Holliday certainly gives our message credibility.”
With Holliday at the helm of a team of smart and dedicated geologists, Alice Queen is well positioned to continue exploration along the Molong volcanic belt, a unique piece of geology playing a part in the quality minerals found in the area.
Hosting porphyry copper-gold, the Molong belt holds a different type of mineral occurrence to most Australian gold projects, with it representing similar mineralisation to the Chilean Andean belt in South America and the Indo Pacific belt that stretches from Papua New Guinea to Indonesia.
This unique geology is part of what makes Cadia Valley such a successful mine.
“When Cadia was discovered, everyone came to explore the rest of the exposed portion of the Molong volcanic belt to find the next prospect,” Buxton says.
“They all stopped at Wellington as the rocks go under a sedimentary cover sequence then goes deeper north.
“Holliday’s theory is simple; we have explored the southern part of the prospect and found no Cadia lookalike, so if you are prepared to drill through the cover there is no reason there won’t be another Cadia in the northern part of the belt.”
The company started its maiden diamond drilling program at the Boda East target area, which is just over 1.5 kilometres north of Alkane’s Boda prospect, in July and has received approval to increase the program by up to 14 holes.
Alice Queen has already returned promising results from the zone, such as including visible disseminated sulphides in a zone from 415 metres to 451 metres and visual chalcopyrite from 423 metres to 438 metres.
Drilling has confirmed that the Boda host rocks also extend into Boda East and the company is determined to keep drilling, due to Holliday’s confidence that there is more to be discovered.
“Holliday’s theory was taking the Indo Pacific and Chilean Andean belts by way of an example when looking at the Molong volcanic belt,” Buxton explains.
“These belts have at least 12 giant world-class copper-gold porphyry mines that run for about 1000 kilometres along the belt.
“So far, there has only been one on the Molong belt and Holliday is almost certain there is another one and as others around the world have 12 each, his theory remains strong to us.”
Similarly, to the Indo Pacific and Chilean Andean belts, the Cadia Ridgeway deposit has a cluster of five deposits quite close to one another, further solidifying Holliday’s hope for Alice Queen’s exploration prospects in the East Lachlan.
Not only is Alice Queen focussed on an extremely promising region with a leader at its helm that has proven success in the East Lachlan, it is also operating at a time of record-high gold prices.
“It’s probably the best time to be a junior in the gold space right now, it’s running very hot,” Buxton says.
“The analysts and advisors say this is a long-term market for gold and with other companies operating in the region like Alkane and Magmatic (Resources) there is the potential to create a little hub, and any capital deployed in the region is great.
“The momentum being created could be the start of a mini gold rush in New South Wales to last a number of years.”
Since the Boda discovery, Alkane has continued to record impressive results at the site, including Hole 7 in March.
Hole 7 returned a large intersect of more than a kilometre at 0.55 grams of gold and 0.25 grams of copper, including nearly 100 metres of 4 grams gold and 1.5 per cent copper.
This created further excitement in the area, which was slightly quietened as the coronavirus pandemic impacted the world and the industry. Despite these circumstances, Alkane maintained its momentum.
“Those results from January through to April have continued to reinforce people’s faith in the region, particularly Hole 7,” Alkane managing director Nic Earner says.
“Alkane is now into quite a substantial drilling program at an eight-kilometre-long corridor in and around the Boda discovery.”
This work comprises a 30,000-metre drilling campaign throughout the Boda Kaiser complex of five deliberately targeted zones.
Like Alice Queen, Alkane is confident in the strong market conditions for gold; this and the company’s previous success in the region at Boda being the recipe for long-term success in the region.
“Our success with Boda has certainly kindled a lot of interest in the small explorer space, and the high gold prices are absolutely a factor too,” Earner says.
“Nothing kindles more exploration like the combination of exploration success and a good commodity price.
“If others in the area have exploration success as well, that will really set a delight because the region is broadly supportive of mining and it’s really clear that we are in an environment where if you get a decent-sized deposit, it’s very profitable.”
In addition to all-time high gold prices, copper prices have also been strong, making for a reliable by-product from East Lachlan projects with the copper-gold porphyry makeup of their geology.
With fellow East Lachlan mine, CMOC Northparkes, producing copper as its main product and gold as its secondary product, the possibilities are endless for robust copper-gold operations in the region.
Earner says post COVID-19 will be a perfect climate for development, with the state and federal governments keen to have new projects approved to create jobs and boost the economy.
“These types of deposits typically have a modest to high copper content and it’s a large part of the profitability of the area hosting both of these elements,” Earner says.
“Australia’s lack of sovereign risk compared with regions like South America, and New South Wales being an incredibly stable and reliable jurisdiction are just some of the things that are wonderful about operating in the East Lachlan region.”
This article will also appear in the October edition of Australian Mining.