Investors are rushing into gold stocks as the precious metal continues to hit new highs. The gold price is now above AU$2,000/oz, for the first time ever, and it seems to have plenty more in the tank with forecasters tipping a rise to US$3,000/oz within a year.
Just like the gold price, Western Australia’s Paterson Province is taking centre stage.
Heavyweights Rio Tinto (ASX: RIO), Newcrest Mining (ASX: NCM), and IGO Ltd (ASX: IGO) each have a slice of prospective ground in this booming WA gold province and cash is pouring into the region.
Outside of the ASX, one of the biggest gold stories out of the Paterson Province is that of London-listed Greatland Gold’s (AIM: GGP) Havieron discovery, which is now being drilled as part of a JV with Newcrest.
With a newly acquired project sitting right between the Havieron discovery and Newcrest’s 32 million ounce Telfer mine, ScandiVanadium (ASX: SVD) is gearing up for its maiden drilling program in the Paterson Province.
The company recently completed the acquisition of Vanatech Pty Ltd along with its two Western Australian exploration targets: the Pascalle Gold Project in the Paterson Province and the Gnama Project in the Fraser Range Nickel Belt. SVD also gained Vanatech founder and geologist Tom Langley in the deal.
While the company name is slightly off target, SVD’s new acquired assets are right in the middle of the action.
Pascalle Gold Project – WA’s Paterson Province
The company’s Pascalle Gold Project is an underexplored gold project in the Paterson Province, wedged neatly between the Havieron discovery and the Telfer Mine.
The Havieron discovery is perhaps the biggest WA gold exploration success story of the last 12 months. The gold deposit is centred on a magnetic anomaly where significant gold and copper mineralisation was revealed under 400 metres of cover.
The discovery was made by London-listed Greatland Gold (AIM: GGP), which has delivered shareholders a >800% gain in the last nine months, for a £530 million (almost A$1 billion) market capitalisation. Given that Newcrest has farmed into the project in a $65 million deal, that valuation is based on Greatland having just a 30% interest in the project.
It’s yet to be seen how big Havieron could ultimately be, but its tipped to be the next feed source for Newcrest’s nearby Telfer plant.
Another regional project approaching production is Rio Tinto’s (ASX: RIO) Winu copper-gold project. Located further to the north of SVD’s Pascalle Project, Rio recently disclosed a resource at Winu.
Providing further encouragement about the potential for the development of multiple ore bodies within the system, Rio has also revealed a new gold discovery, Ngapakarra, located approximately two kilometres from Winu. Here, early stage drilling identified shallow, thick high-grade gold which remains open in all directions and at depth.
But SVD’s Pascalle Project is not simply a nearology play.
Pascalle drilling imminent
The Pascalle project area has a number of key geological similarities with other major discoveries in the region and the processing of geophysical data has identified eight prospective targets for follow up investigation.
The recent discoveries by Rio Tinto at Winu and by Greatland Gold at Havieron have demonstrated the importance of geophysical surveys in aiding discovery of tier one gold copper prospects in the region — SVD is now following the same process.
The company will commence a high-resolution helicopter electro-magnetic and magnetic survey over the Pascalle Gold Project later this month.
The surveying system to be used is the same as was involved in Rio Tinto’s discovery of the Winu copper-gold project, also located in the Paterson province of Western Australia.
This system will be vital in planning the group’s upcoming maiden drilling campaign, which is set to commence by the year’s end.
Based on the early work to date, the project looks highly prospective for Telfer, Havieron and Winu style gold-copper deposits. It has eight untested drill targets and all the right geological conditions to host the region’s next major gold discovery.
Significant exploration expenditure in the region has resulted in enhanced understanding of geological controls on mineralisation over the last four years and encouraged new concepts in exploration.
In the past, exploration was less advanced. Newcrest’s 32Moz Telfer mine was just outcropping followed at depth, while at Pascalle, which was also first identified by Newcrest, next to no drill holes were completed down more than a couple of metres into fresh rock.
Here you can see SVD’s Pascalle target (below, left) and Havieron (below, right) showing ‘Bullseye’ magnetic target with coincident gravity-high highlighted.
The difference in resolution is due to the difference in depth, with Havieron occurring at greater than 450 metres, whereas, at Pascalle, cover is only between 20m and 50m across the vast majority of the licence area (up to 120m maximum).
The Bullseye target at Havieron proved to be a fantastic hit — including 75m @ 4.8g/t gold and 0.6% copper — however, drilling had to extend through 400 metres of cover to get to it.
Not only does Pascalle have only limited cover, it is in the right area geologically, and there are multiple targets to test.
This all comes against a backdrop of gold hitting $2,000/oz, as forecast point to continue run to US$3,000/oz within a year.
Gnama Project – Fraser Range Nickel Belt
Further south in WA’s Fraser Range Nickel Belt is SVD’s Gnama Nickel Project.
Gnama sits ~20km along strike from the Nova-Bollinger Mine, which was discovered by Sirius before being acquired for $1.8 billion by IGO Ltd (ASX: IGO) in May 2015.
Gnama is also not far from Legend Mining’s (ASX: LEG) recent Mawson discovery. The discovery in December 2019, propelled LEG’s share price from 4 cents to 14¢ today, for a $350 million market cap — an impressive valuation for an explorer without a resource.
The 61km2 Gnama project was identified by Sirius Exploration in 2010 when RC holes drilled to test a soil geochemical anomaly intersected a zone of nickel, copper and cobalt enrichment in the oxide zone above mixed mafic and ultramafic rocks.
As Sirius moved on to drilling at the Nova target, the potential at Gnama was never followed up and the tenement was allowed to lapse.
However, the project has huge potential — the oxide cap indicator is similar to exploration indicators at LEG’s Mawson discovery, Creasy Group’s Sliver Knight, and at Nova-Bollinger.
In light of the revised company direction, SVD appointed Mr David Frances as Executive Chairman. Mr Frances led Mawson West (TSX: MWE) from 2006-2012 where he completed the world’s largest base metals capital raise and IPO in 2010.
He also has previous exposure to the Fraser Range as Managing Director of Winward Resources which was acquired by IGO in 2016.
With exposure to two premier Western Australia gold provinces and work set to commence shortly, in combination with the strong gold price, SVD will continue to continue attract investor attention.
By Jonathan Jackson
