When you’re hunting an elephant, it pays to keep an eye on the rest of the country around you – you never know what you might miss.
Explorer Krakatoa Resources has kept its eyes open, and now has a second project just as promising – if not more so – than its “elephant,” the potential deep porphyry copper/gold system it appears to have at the Belgravia prospect, in the prolific Lachlan Fold belt in New South Wales.
About 50 kilometres east of the Belgravia Project is Krakatoa’s wholly owned Turon Project, which it was granted in February following a licence application, in a beautifully non-dilutive deal for shareholders. The Turon Project covers an area of 120 square kilometres in the Hill End Trough area of the Lachlan Fold Belt, a ground package liberally sprinkled with historical workings that centred on high-grade gold mineralisation.
“The Turon ground features the Box Ridge line of workings, which has a 2.4-kilometre strike length that we know of, including the old Britannia mine and four other known mines,” says Colin Locke, Krakatoa executive chair. “Britannia produced 10,000 ounces before water at 30 metres stopped mining in about 1904.
“We’ve also found a trove of assay results from about 30 years ago over the Quartz Ridge line of workings at Turon, which has a 1.6-kilometre strike length between the old Quartz Ridge and Dead Horse Reef mines. These results weren’t followed up, but some of them were very high-grade,” Locke says.
Some of the most exciting historical gold results from rock chips include results of 1,530 grams per tonne (g/t) of gold and 150 g/t gold from Dead Horse Reef, and 60.60 g/t gold from the Britannia Mine.
“Turon appears to be full of shallow, high-grade gold lodes with numerous drill-ready targets. We’re looking at 4 kilometres of strike, of high-grade, near-surface gold, all open at depth, and we can smell a mine there,” he adds.
Given the shallowness of the mineralisation, down to 30 metres, Locke says Krakatoa would ideally be talking open-pit mining initially, with the potential to put in a portal to get access to underground lodes, depending on more drilling. “Just going on the old diggings, and investigating the old data – and then doing our own drilling – we can see two open pits at Turon,” he says.
The infrastructure requirement also looks promising, he says, with the Turon project within easy truckable distance of a mothballed gravity gold processing plant at Hill End, built in 2008 and owned by Pure Alumina Limited (the former Hill End Gold Limited), which owns the Hill End-Hargraves gold project, but has more recently focused on high purity alumina (HPA) in Victoria.
“The Hill End mill was designed to cater to this kind of ore, but is not being used,” says Locke. “We haven’t done a deal with the plant owners yet, but it’s the logical place to go. At the grades we’re looking at, we’re fairly confident that would be cost-effective.”
The next step, he says, is to follow-up the deep-ground penetrating radar (DGPR) results on the Britannia mine targets and the re-interpretation work on the Rotary Air Blast (RAB) drilling data on the Quartz Ridge targets with a formal drilling program over Turon, starting with Britannia.
“That would either be reverse circulation (RC) or diamond drilling, although you just learn so much more from diamond,” says Locke. “We need to get a complete picture, but if you put two and two together, the old-timers ripped out 10,000 ounces of gold out of Britannia in a very small area, only going down to 30 metres, and they only stopped because of water.
“It just shows you how high the grade is there, and what potential that whole area has – just on that 2.6-kilometre strike that we know of,” says Locke.
Comparisons across the market can be frustrating, but Locke cannot help musing over the hype – and market-capitalisation step-up – that Kingwest Resources has achieved for the “same type of mineralisation” at the historic Menzies project in Western Australia. “They’re chasing the same kind of orebody, but the only difference is, they’re chasing at 400 metres underground. Their last hole was more than 700 metres. We’re looking at 30 metres, but the market hasn’t noticed,” he says.
But the executive chair is keen to emphasise that Turon has not been elevated above Belgravia in importance: he says Krakatoa still reckons they’re of equal value, and is 50:50 in terms of apportioning its effort.
“But the crux of the matter is that with gold prices the way they are, Turon – given the high grade and the shallowness – is a lot closer to production, and we’re hell-bent on getting something that’s quick to production in our portfolio,” says Locke.
“The costs are going to be pretty low given the shallowness, and early cash flow from Turon would be of obvious benefit to Belgravia,” he adds.