Northern Star Resources (NST), the second biggest ASX-listed gold producer, seems to have made a fascinating gold discovery in Western Australia, near one of its existing mines on the outskirts of Kalgoorlie in WA.
The company yesterday told the ASX what it called “a significant gold discovery” was made at an old mining area called White Feather, near the company’s Kanowna Belle Gold Mine.
The shares jumped more than 10% to end at $1.065.
The announcement fortuitously came on a day when the gold price leapt in New York to just above $US1,200 an ounce for the first time since late October.
The news also came on a day when the local market shook off the oil-induced blues and rebounded nicely for a change.
The company said included in some of the holes drilled on the White Feather were "spectacular grades of more than 5,300gpt from a vertical depth of 200m”.
"The original White Feather deposit was discovered in the late 1800s and led to the development of the Kanowna Township at the turn of the century.
"Production from White Feather stopped in 1920, with historical production from the Kanowna White Feather line of reef estimated at 250,000oz of gold at an average grade of 16gpt. The veins were typically narrow (1m wide) and are characterised by coarse gold," Northern Star said in its statement.
NST YTD – Northern Star strikes ‘spectacular’ grades
It said the latest discovery was made during a drilling program designed to test for possible extensions of the high-grade mineralisation below the old workings.
"Drilling to date indicates that the White Feather mineralisation consists of three veins dipping moderately to the east. Drilling at White Feather is ongoing as part of a strategy to grow the total mineral inventory around Kanowna Belle.
"Northern Star’s Managing Director Bill Beament said the White Feather discovery confirms the Company’s view that substantial amounts of gold remain to be found in Western Australia.
“Northern Star’s business model is based on the belief that there is an extensive amount of gold to be found in and around existing operations in WA, but much of this will be at depth.
“This is why we have established a $50 million exploration budget over the coming 12 months, with more than 20 drilling rigs in operation around Western Australia,” the company said.
The Company owns and operates the following gold mines: Paulsens, Plutonic, Kanowna Belle, Kundana including the East Kundana Joint Venture (NST’s interest: 51%)) and Jundee and also has a strong exploration focus covering approximately 10,000 square kilometres of prospective areas of Western Australia.
In yesterday’s statement Northern Star said:
– High grade drill intercepts from White Feather include:
• 1m @ 5,328gpt from 234m down-hole
• 1m @ 60.3gpt from 158m down-hole
• 3m @ 8.0 gpt from 77m down-hole including 1m @ 20.2 gpt from 78m down-hole
• 1m @ 11.6gpt from 229m down-hole
– Intersections made below historic workings which produced 250,000oz at an average grade of 16gpt.
– Historical drilling from previous owners returned very high-grade intercepts including:
• 2m @ 113gpt from 238m down-hole
• 0.8m @ 95.1gpt from 104m down-hole
• 1m @ 2 25gpt from 118m down-hole
– Further drilling has intersected the veining with visible gold, further assays pending.
Just what the reserves picture is remains to be seen, but the news is encouraging, especially close to an existing mine.