Profitable gold producer Kaiser Reef has kicked off a surface diamond drilling campaign at its Maldon gold project in Victoria, with the rods now turning at the first of four initial targets designed to test the region’s high-grade gold potential.
The initial phase of the program, involving 4350 metres of drilling, will start at the company’s newly generated “Quill” target.
Quill ironically lit up after the company ran a sterilisation drilling program for a new tailings storage facility. Drilling unexpectedly returned a solid 8-metre hit grading 4.16 grams per tonne (g/t) gold from just 10m depth, including a higher grade 2-metre core running at 9.9g/t gold.
Kaiser’s follow-up electrical resistivity survey over the area then sniffed out a potential quartz reef and the possible source of the gold, which is now squarely in the crosshairs of the current drill program.
While Quill might be the opening act, the company has a grab-bag of other compelling targets lined up for the campaign. Perhaps the most intriguing is Nuggetty South, which will probe a 170-metre untested gap along a newly interpreted shallow plunge.
Kaiser says it is hunting for a replica of the adjacent historic Nuggetty Reef, which was a true behemoth, having produced an estimated 301,000 ounces of gold at an eye-watering average grade of 187g/t.
Previous drilling along the Nuggetty South plunge has already delivered some stellar results, including 3.4m at 34g/t gold and 4.3m running 11.2g/t gold, suggesting there could be plenty more treasure lurking beneath.
The campaign will also test the northern extensions of the Eaglehawk Reef mineralisation at Union Hill North and probe remnant targets at Nuggetty.
The Maldon goldfield is steeped in history, having produced 1.75 million ounces of gold at a hefty average grade of 28g/t, yet it remains significantly underexplored by modern standards.
Maldon represents a district-scale gold opportunity for Kaiser, with numerous historical mines and lines of working that remain substantially underexplored, despite having historically produced an enviable 1.75moz at 28g/t. We are undertaking a comprehensive works program, aiming to unlock the district after decades of exploration neglect.
Importantly, Kaiser is not just another hopeful explorer. The company is a profitable producer, churning out gold and significant cash flow from its Henty gold mine in Tasmania.
In the March quarter, the company generated a solid $4.28 million in net cash from operating activities, bolstering its cash reserves to a healthy $45.6 million. With its gold sales now fully unhedged, Kaiser is well-positioned to capitalise on the current strong gold price to fund its aggressive exploration push at Maldon.
Production at the company’s Maldon project is also starting to ramp up, supported by the company’s fully operational Porcupine Flat processing plant, where a second shift has recently commenced to double throughput of a low-grade stockpile.
The savvy move is expected to lower processing costs and help fund the very exploration work that is now underway, including a soon-to-be-flown heli-mag survey, surface mapping and soil sampling, to generate additional surface targets.
With a cashed-up balance sheet, a profitable production asset funding the work and the drill rods now spinning at a historically rich goldfield, Kaiser seems to have its ducks in a row.
All eyes will now be on the assay labs as the first results from the Maldon program start to trickle in.
Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au
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