Kalamazoo on magic million gold hunt in Victoria

ASX-listed gold explorer, Kalamazoo Resources has set its sights on teasing out more uber high-grade underground gold deposits that may still be lurking in the historic Central Victorian Goldfields. The company has been steadily building an enviable ground position in the famous gold-rush era region that appears to be undergoing a major gold exploration renaissance.

Perth-based Kalamazoo launched a reverse circulation drilling campaign at the intriguing Fentiman’s Reef, Smith’s Reef and Charcoal Gully prospects within its 161-square-kilometre South Muckleford gold project near Maldon this month. It sees these prospects as containing “highly prospective” epizonal gold-antimony mineralisation closely analogous to that of the nearby Fosterville and Costerfield gold deposits in Central Victoria.

Courtesy of its recently acquired historic Ashburton gold project in Western Australia, the company has also hopped on the chock-a-block Pilbara gold bandwagon being propelled by De Grey Mining at its exciting Mallina gold project and a host of others including Calidus Resources at Warrawoona, Novo Resources at Nullagine and Capricorn Metals at Karlawinda to name a few.

Kalamazoo currently holds the Castlemaine, South Muckleford and Myrtle projects in the Bendigo tectonic zone of the Central Victorian Goldfields. Historical gold production from alluvial mining at Castlemaine totalled 5.6 million ounces and 2.1 million ounces from underground mining at South Muckleford, with the latter’s ore averaging a whopping 28 grams per tonne gold.

The company has nominated a bold gold discovery target for its Victorian gold exploration portfolio of more than one million ounces contained in ore grading more than 10 g/t gold.

Whilst it might seem a tall order on the surface, the Central Victorian Goldfields’ Bendigo zone did cough up more than 60 million ounces of historical gold production from alluvial and hard-rock ore that went grades averaging approximately 15 g/t gold, or 100 times richer than the global average.

Against the Goldfields’ bonanza gold grade background and in light of the wealth of Kalamazoo’s brownfield targets – in some cases, walk-up drill targets – across its projects being relatively under-explored by modern methods, the magic million-ounce mark may not be that fanciful.

TSX, NYSE and ASX-listed Kirkland Lake Gold’s success at the nearby, world-class Fosterville gold mine – approximately 40km north-north-east of the most northern section of Kalamazoo’s Castlemaine project – has also renewed international attention on the wider Victorian Goldfields.

Kalamazoo has long been a believer of the high value that can be attributed to the Victorian Goldfields. As such, we have now strategically grown our position in this prospective region to 515 square kilometres, very much aware of the inherent value a major gold discovery can unlock.

Kalamazoo expects to find out soon whether or not it has been awarded another slice of precious exploration tenure around the feted Fosterville mine as part of the Victorian Government North Central Victorian Goldfields tender process for four exploration blocks.

The tender was hotly contested, according to the company, underlining the Central Victoria Goldfields’ exploration resurgence. Kalamazoo, which lodged an offer for two of the blocks located just 20km from its Castlemaine gold project, says the new landholdings it is hoping to secure are “highly prospective” given their proximity and similar geology to Kirkland Lake’s Fosterville mine and other regional discoveries.

Kalamazoo has been deploying the full arsenal of modern exploration techniques over its Victorian project areas as it looks to unearth the next one-million-ounce-plus world-class Central Victorian Goldfield company maker.

Innovative “low-impact” technologies helping the company identify gold targets include UltraFine+ infill and regional soil geochemical sampling. They are also employing detailed field mapping, geophysical induced polarisation or “IP” and ground magnetic surveys, airborne LiDAR surveying and 3D geological modelling.

The company has this month kicked off the RC drilling campaign – for a minimum aggregate coverage of about 4,000 metres – at the South Muckleford project’s recently uncovered Fentiman’s Reef, Smith’s Reef and Charcoal Gully prospects.

Kalamazoo considers the trio of prospects’ epizonal gold-antimony mineralisation to be closely akin to the style of mineralisation that occurs at the nearby high-grade Fosterville and Costerfield deposits, which it says makes them high-priority drill targets. The company has also completed detailed airborne LiDAR and ground IP surveys over the three prospects, further aiding the drilling program design and planning.

Fentiman’s Reef, Smith’s Reef and Charcoal Gully are interpreted to be “favourably” located in the hanging wall position of the major regional-scale, north-south trending Muckleford Fault, which the company says is regarded as a key deep-tapping conduit for gold mineralising fluids.

Kalamazoo says the latest RC campaign will be aimed at zeroing in on potential extensions to known historical mine workings, soil geochemical and ground geophysical anomalies and favourable structures over an approximate 130m-260m depth range across all three prospects.

The old Fentiman’s Reef mine reportedly produced high-grade gold in the order of about one ounce to the tonne of ore during its operations from approximately 1860 to 1904.

Other high-priority prospects already in Kalamazoo’s flush exploration pipeline include Mustang, Lightning and Wattle Gully extensions within the 310-square-kilometre Castlemaine project.

Six diamond holes for an aggregate coverage of 1,818m were drilled into Lightning – approximately 2km south of Mustang – between October and December last year testing a 440m strike length of prospective structures interpreted to be an analogue of the nearby former Wattle Gully gold mine.

Lightning lies less than 5km north of the historic Wattle Gully mine, which yielded 1.1 million tonnes of ore at an average grade of 11.1 g/t for production of 411,000 ounces of gold between 1934 and 1969.

Notable assay values from Kalamazoo’s initial drilling at Lightning included 0.8m going 11.1 g/t gold from 142.7m, 0.4m at 12.3 g/t from 138.5m and 0.55m at 10.6 g/t from 142.6m.

Kalamazoo says the drilling results from all six holes point to an auriferous Wattle Gully analogue structure that consists of a west-dipping fault zone up to 10m thick containing abundant quartz veining, associated alteration and minor visible gold typical of the Castlemaine Goldfield.

To date the company has traced a fertile trend of high-grade gold mineralised structures that includes Mustang and Lightning for a total strike extent of approximately 2.5km.

According to Kalamazoo, the trend is coincident with the presence of several historical mine workings and shafts. Mining recoveries in the old Lightning and Nimrod mining areas were reported to be roughly one ounce to the tonne or 31 g/t gold for 23 years in the late 1880s.

The company also completed its maiden diamond drilling program at Mustang in April last year, returning a clutch of spectacular high-grade gold hits. Stand-out intersections included 1.42m registering an eye-popping 261.3 g/t gold from 100m and 0.8m at 19.4 g/t from 319m.

Despite the structural complexities of the two prospects’ gold mineralisation, Kalamazoo says the Mustang-Lightning mineralised trend shows similar geological attributes to the nearby Wattle Gully mine and Fosterville-style shallow-dipping fault structures. It remains “highly prospective” and warrants further investigation to see if the company can lift the veil on another Wattle Gully or Fosterville-type high-grade gold deposit.

Kalamazoo says it intends undertaking an extensive review of the drilling data it has generated from Lightning and Mustang and additional testing of the prospects in due course.

Like Castlemaine, the company’s nearby South Muckleford project – just 10km to the west and adjacent to the historic ultra-high-grade Maldon Goldfield – also plays host to a highly prospective goldfield with a history of high-grade gold production.

Ultrafine+ soil geochemistry analyses over the northern part of the South Muckleford tenement area revealed the significant gold-antimony-arsenic anomalies coincident with historical mine workings at Fentiman’s Reef and Smith’s Reef. The soil assay values included up to 53 parts per billion gold, 167 part per million antimony and 1,740 parts per million arsenic.

Kalamazoo also conducted historical research, field mapping and rock chip sampling at the Fentiman’s Reef and Smith’s Reef prospects. It says the work confirmed the existence of a broad epizonal, high-grade gold, antimony and arsenic mineralised system over at least two parallel lines of lode with significant strike extents.

The Fentiman’s Reef and Fentiman’s South prospects straddle a semi-continuous line of historical surface and shaft mine workings that extends for at least 750m. Soil geochemistry there suggests the mineralised trend extends beyond 1km-long. The third nearby prospect west of Smith’s Reef called Charcoal Gully was also identified by the Ultrafine+ soil sampling survey.

Ground geophysical IP surveys, 3D structural geology modelling and aerial LiDAR survey work followed.

In WA, Kalamazoo picked up the 1.64-million-ounce, 217-square-kilometre Ashburton gold project in the Pilbara in the second half of last year and has wasted no time in getting the drill rods turning in its quest to expand the gold resource to 2-3 million ounces.

The company’s maiden 5,781m RC drilling program at Ashburton completed late last year encountered very encouraging gold hits beneath the former Waugh open pit.

Better intercepts were 9m going 5.52 g/t gold from 148m including 1m at 22.1 g/t from 153m, 9m at 4.03 g/t from 157m including 1m at 17.8g/t, 7m at 4.25 g/t from 68m including 3m at 7.99 g/t from 68m, and 9m at 3.03 g/t from 155m including 2m at 9.71 g/t from 156m.

According to Kalamazoo, the Waugh prospect has only been sparsely tested along strike, down plunge or down dip and consequently, may be harbouring new oxide gold mineralisation.

The drilling results indicate that thick shoots of medium to high-grade mineralisation occur beneath and along strike of the Waugh pit, remaining open in multiple directions, the company says. The siltstone unit hosting the prospect outcrops for more than 20km within the project tenements and takes in several surface anomalies that have only been tested with minimal historical drilling.

Waugh is one of the five gold deposits that speak for Ashburton’s indicated and inferred oxide and sulphide mineral resource estimate of 20.78 million tonnes of ore grading an average 2.5 g/t for 1.64 million ounces of contained gold.

Our strategy once we acquired the project from Northern Star was to implement the right program that would see us substantially expand the gold resource in excess of 2 million ounces and to further advance development plans. This initial drilling at Waugh has now identified thick intersections of moderate to high-grade gold which provides us with great confidence that we will indeed deliver on our strategy for adding additional ounces under and along strike of the five existing pits, and across the greater project area.

Kalamazoo plans to carry out a round of follow-up drilling at Waugh, both along strike and in poorly tested areas below the current base of the pit with the aim of substantially increasing the oxide gold resource.

As part of its proposed 15,000m to 20,000m drilling push this field season at Ashburton, the company will also be looking to follow up interesting historical drill data and surface anomalies at other prospects including Peake and at new target areas.

Drilling has been slated to recommence at Ashburton in the current quarter.

The $60 million-market capped company has earmarked approximately $3 million for exploration on the Pilbara and $3 million for exploration in Victoria this year.

With assets in two of the most sought-after gold jurisdictions in the world, a cornucopia of positive drilling results, strategic cornerstone investors including Novo, and about $9 million cash with its coffers set for healthy option exercising top-ups this year, Kalamazoo is well placed to take any economic gold reserves it can define to the next level.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au