In what is shaping up to be a classic WA gold takeover target, Verity Resources’ (ASX: VRL) is currently drilling their 154koz at 1.4g/t Monument Gold Project, the bulk of which is contained across just 800m of the 20km strike that VRL owns in the famed 50Moz Laverton Gold District. It’s positioned directly adjacent to and along strike of $5 billion market cap Genesis Minerals’ (ASX: GMD) 3Mtpa mill – operating at just 0.8g/t Au – which GMD is aggressively turning into a central processing hub.
VRL just commenced a 54 hole, 3,600m RC campaign that includes both infill drilling to upgrade the resource, and step out holes designed to expand the mineralisation footprint – which will be followed up with an aggressive stage two diamond and RC drilling campaign in November. Monument’s current deposit is open in all directions and at depth, and has recorded a litany of high-grade assays including 7m at 13.15g/t Au from 7m, 6m at 7.24g/t Au from 79m, 6m at 3.15g/t Au from 95m and 5m at 3.22g/t Au from 130m.
Importantly, there have been some outstanding assays at the 1.1km strike Fred’s Well prospect, which is well outside of the current MRE – notably 24m at 3.24g/t Au from 44m, including 12m at 6.35g/t Au, and 8m at 2.09g/t Au from 40m.
VRL conducted a 750m, 19 aircore hole drilling program along the same structural corridor earlier in the year at the Triton, Star Well and Korong West prospects – which confirmed a newly discovered mineralised trend 5km northwest of the Korong deposit, which currently holds 139koz of Monument’s resource. Importantly, the assays revealed that the mineralisation at Triton is predominantly supergene in nature – meaning it is a secondary enrichment that has likely been derived from a higher-grade primary mineralisation source at depth.
Most of the mineralisation at Monument is within 125m of surface, and VRL recently completed a pit optimisation study that clearly outlined the potential for open-pit mining, which will feed into the scoping study in September – after which VRL expects a mining licence to be granted.
At just $6.2 million market cap, VRL’s current deposit is being priced at $40/oz – before the upcoming JORC resource update that will add ounces and increase much of the inventory confidence to Indicated. This compares to other relevant WA gold acquisitions, such as the $173/oz Northern Star (ASX: NST) paid for Strickland Metals’ (ASX: STK) 346koz Millrose deposit, and the $63/oz GMD recently paid for the 3.9Moz Laverton Gold Project.
Mineralisation at Monument is interpreted as Archean greenstone-orogenic, hosted predominantly within banded iron formation (BIF), with the bulk of gold contained in a 3-5m basal, magnetite-rich BIF unit. In parallel, the company is pursuing intrusion-hosted targets analogous to 7Moz Wallaby and 1.5Moz Jupiter, as well as basalt-hosted targets along the same corridor.
Based in Kalgoorlie and having previously held management positions and frontline leadership roles at NST and IGO is VRL’s recently appointed structural geologist Dr. Rick Gordon, who is spearheading both the resource expansion and broader district scale discovery strategies.
Overall, there is a solid case to be made for VRL trading with a development and exploration upside premium, but instead it appears to be at a discount.
Only 10% of Monument’s massive 20km strike has been tested, and there are at least 60 high priority targets yet to be drilled. A map of VRL’s prospect location plan can be seen below, and includes many significant intercepts from aircore drilling that are outside the current 154koz resource:
Source: VRL
The Korong deposit and all of its potential extensions, where infill drilling is currently being undertaken, can be seen below:
Source: VRL
M&A is the Key to Gold Major’s Maximising the Value of their Infrastructure
Major gold producers in Australia are always on the hunt for strategic acquisitions that can create far more value as a part of the group than they would separately – and these deals can come in the form of small bolt-on acquisitions to give a major mining operation additional feedstock, or major deals that have multi-million ounce potential.
The majority of exploration expenditure by the majors goes toward building on resources and reserves at their existing operations, and there have been no new significant discoveries across the globe in the past two years. When a gold producer has an asset that is operating under capacity, they rely on their local explorers to prove up resources that end up being acquired or toll treated out of necessity.
VRL’s neighbour GMD is aggressively engaging in this quest right now, and is actively deploying capital throughout the Laverton region in order to achieve its 200koz annual production target. GMD paid $250 million for the 3.9Moz Laverton Gold Project, and is planning on transporting it 30km to their processing plant. They are also toll treating ore from Brightstar Resources (ASX: BTR) and Kumarina Resources.
Most gold producers in Australia have an all-in sustaining cost (AISC) of between $1,800-$2,800/oz, and GMD is sitting towards the top end of that at $2,499/oz. The company’s current growth strategy at the group level aims to achieve 350kozpa at an AISC around $2,150/oz – and it plans on getting there through utilising its regional expertise and strong capital base to acquire projects and expand existing milling capacity.
It’s a tried and tested method also being used by NST, who paid more than $60 million for STK’s Millrose deposit when gold was US$1,925/oz in June 2023 – another WA orogenic gold resource that contained a 346koz resource at 1.8g/t Au. NST also plans on transporting Millrose ore 30km to their Jundee Mill, which was operating at just 60% capacity at the time of this acquisition.
Despite being a modestly sized resource, it was of extreme value to NST due to its grade and proximity – the same features that VRL’s Monument shares with GMD’s Laverton Mine. Additionally, STK’s market cap rose to $309 million after the deal as investors wondered what they would do next. Given VRL’s ideal location and abundant amount of targets outside the existing resource, selling off the deposit after getting it ready for production would still leave an enormous part of the 195km2 tenement package to explore.
Home to over 50Moz, the Laverton Gold District is a prolific region with one success story after another, and VRL’s 20km of strike between the Monument Gold Project and GMD’s 3.3Moz Mt Morgan Operation can be seen below:
Source: VRL
An Existing Resource with Geology Fit for a Multi-Million Ounce Deposit
Given the geological setting at Monument, there’s a wealth of evidence pointing towards the type of mineralisation that has been discovered at Korong, and the 15koz at 2.1g/t Au Waihi, likely being repeated in many more locations along strike throughout the project.
Most studies on Mt Morgan/Westralia show BIF-hosted, sulphidic replacement style lodes, localised in folded and sheared iron formations interbedded with basalts, with gold introduced during late-Archaean orogenic events. Replacement of magnetite/hematite by Fe-sulphides, silica-carbonate alteration, and competency contrasts along BIF-mafic contacts are key controls. This style supports long, repeatable shoots where the BIF is folded, fault-repeated or intruded.
The Laverton Greenstone Belt hosts many world-class deposits, such as 10Moz Sunrise Dam, 7Moz Wallaby and the 7Moz Granny Smith, that are driven by transpressional shearing, deep-seated structures and local intrusive events – which create stacked lode geometries with strong vertical continuity.
Korong and Waihi contain BIF-hosted orogenic shoots developed in an overturned, east-dipping iron-formation package with multiple discrete BIF units separated by metasiltstone, ultramafic rocks and basalt. The highest tenor consistently localises in a 3-5m basal, magnetite-rich BIF, with mineralisation remaining open along strike and down-plunge. This litho-structural architecture is textbook Laverton, where there is replacement of magnetite and hematite by sulphides with silica-carbonate alteration that is focused where competency and chemical contrasts are strongest at BIF-mafic contacts.
VRL’s second growth engine sits in the intrusion-related and basalt-hosted target set. Monument’s intrusion targets are explicitly syenite-linked analogues to Wallaby and Jupiter, where geochronology and deposit studies indicate an orogenic fluid event overprinting alkaline intrusive architectures and feeding structurally controlled lodes in and around syenite pipes.
Advancing the exploration of these pipes and adjacent shear zones in parallel with the BIF step-outs significantly broadens the discovery surface and creates multiple, independent pathways to grow well beyond 154koz. With gold trading at US$3,330/oz – VRL’s focus on Monument is perfectly timed, and the company is poised for an exciting few months of newsflow.
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Disclaimer: This article is for informational and marketing purposes only, and does not constitute financial advice or a recommendation to invest. All opinions expressed are our own. We may receive fees or other forms of compensation in connection with the publication of this content, and may own shares in any of the mentioned companies. Please do your own research and seek professional advice before making any investment decisions.