There are plenty of examples of ageing mines in Western Australia’s goldfields enjoying a second, third or fourth wind thanks to new resources being found at depth or in adjacent locations.
Northern Star’s Paulsens and Jundee come to mind, as does Gold Fields’ Agnew/Leinster and Granny Smith/Wallaby operations. And more recently, there has been the success of Dacian Gold’s Mt Morgan project.
It is a thematic that investors are switched onto, prompting a one step-back search by investors for junior explorers which control old gold mines with rich production histories that are no longer in operation.
The idea is that old mines are the best indicator that you’re in gold country. And with all the encouragement that comes from a $A1,675/oz gold price, a concerted modern-day exploration effort with all the bells and whistles might just come up with the goods.
It is against that backdrop that some of the smarties around town have put Draig Resources (ASX:DRG) on their watchlist. The formerly sleepy Draig picked up the old high-grade Bellevue gold mine, 175km north-west of Laverton, last year.
But it took the recent appointment of a new management team led by Steve Parsons to really get interest in the stock up.
Parsons was previously managing director of Gryphon Minerals, the ASX-listed West African gold explorer which was taken over by Canada’s Teranga Gold last year in a $100m bid which delivered Teranga the 3.6moz Banfora gold project.
Parsons must like the Draig story because he has backed up his executive director appointment by pumping $200,000 of his hard earned into the company in a placement at 3c a share. Draig has since moved on to 5c for a market cap of $13m.
Discovered back in the 1890s, Bellevue has a recorded production history of about 800,000oz at a grade of 15 grams of gold a tonne. It produced its last gold in 1998 and not much has happened there since.
That means it’s coming up to 20 years of sleep for Bellevue. It is a long time. Just how long is nicely reflected in a picture contained in Draig’s recent investor presentation on the Bellevue opportunity.
It shows an air-leg miner doing his stuff underground in the last days of the mine operating. He has his hard hat on and ear protection, but no safety glasses. What’s more, the guy’s having a smoke.
Plus, Silver Mines on track to make Bowdens a gold medal winner. Read more.
