Surrounded by under-capacity mines in the heart of WA gold mining country is a deposit that Ramelius Resources (ASX: RMS) acquired for $13 million in 2018, when gold was just US$1,200/oz, before mining 143koz at 1.9g/t Au between 2019 and 2023. Leeuwin Metals (ASX:LM1) acquired the 500km2 project at the end of 2024 and brought $9 billion RMS on as a strategic shareholder – when gold was US$2,635/oz – and had an incredibly efficient year of drilling which culminated in a maiden resource of 342.3koz at 1.05g/t Au, which was completed in 9 months at under $10/oz. Within this are a number of prospects that contain high-grade sections which have high priority extensions currently being or about to be drilled, such as the 96.4koz at 1.52g/t core at Evanston, 87.7koz at 1.26g/t Au at Marda Central and 25.7koz at 1.56g/t Au at Golden Orb. While gold has had a sharp but minor pullback recently, it is still trading near all time highs above US$5,000/oz – and most investment banks continue to call for further moves upward, with JP Morgan forecasting US$6,300/oz by the end of 2026 and Deutsche Bank expecting to see US$6,000/oz this year.
LM1’s aggressive drilling campaign commenced only 3 weeks ago, and just hit 13m at 3.2g/t Au from 91m including 3m at 10.5g/t Au from 93m, and 10m at 1g/t Au from 96m – and the company is continuing to explore the highest value adding areas of Marda. This 10,000m RC drilling program at the Evanston prospect in Marda North, which so far contains 135.8koz at 0.98g/t Au within a section of its 1.6km long trend – is targeting down-dip and strike extensions of high-grade, shallow mineralisation that has previously hit 7m at 3.55g/t Au from 17m, 9m at 5.23g/t Au from 57m and 11m at 3.12g/t Au from 85m. Further assays are due back imminently, and all drilling is specifically designed to achieve resource growth in this year’s MRE update. Super high-grade rock chip samples were just released from the Mt King prospect, which is also in the North section of Marda, and is yet to lay claim to a resource – but is shaping up to be a spectacular target. The results include 39.9g/t Au, 25.8g/t Au, 19.85g/t Au and 13.4g/t, which follow up on historical drilling assays of 15m at 7.47g/t Au from 120m and 4m at 7.27g/t Au from 70m – and they’re in an area with historical workings.
Along with the project, LM1 also acquired an insanely large historical drilling database of over 350,000m – which is acting as a detailed blueprint for LM1 to chase the most prospective areas. It includes 250km of RAB/AC, as well as 117km of RC and 5km of DD. LM1’s drilling across the 3km trend at Marda Central defined four deposits that each have clear potential for growth – 41.3koz at 1.4g/t from Python, 24.1koz at 1.46g/t Au from Dolly Pot, 13.9koz at 0.86g/t Au from Taipan and 8.5koz at 1.1g/t Au from Gold Stream. Some of the 2025 assays from Python include 16m at 2.00g/t Au from 134m and 8m at 3.04g/t Au from 215m, as well as 23m at 1.29g/t Au from 207m, including 10m at 2.3g/t Au from 207m, and 5m at 5.0g/t Au from 229m including 1m at 10.0g/t Au from 231m – which established continuity of mineralisation below the pit across a 200m by 200m area.
At just $24.2 million market cap with $6.1 million in cash, LM1’s $18.1 million enterprise value means they are priced at under $53.8/oz, which would drop to $36.2/oz upon definition of a 500koz resource. When RMS first acquired Marda, there were actually total JORC 2004 resources of 7.67Mt at 1.95g/t for 480koz, which was based on a 1g/t cut-off grade. LM1’s JORC 2012 resource of 10.5Mt at 1.05g/t is based on a 0.3g/t cut-off grade, so it is likely that there is significant tonnage that can be added with further drilling, given a monstrously higher gold price allows for the inclusion of lower-grade material.
RMS established haulage routes to transport ore 191km from Marda down to Edna May, which formed a crucial source of mill feed that contributed to the facility’s AISC, which ranged from $1,500-$2,000/oz during the four years of production. This network can very easily be used in the event Edna May is brought back online, and RMS will be assessing options for the state of the art 2.9Mt mill early this year. RMS acquired it in 2017 from Evolution Mining (ASX: EVN) and it is currently laying dormant, just waiting to unlock a whole heap of value if the right ore sources can be assembled. There is also the enormous 6Mtpa KoTH mine 218km away, which is processing 1.1g/t ore and operating under 90% capacity, with its owner $6 billion Vault Minerals (ASX: VAU) currently undertaking an expansion to 8Mtpa.
The historical resource at Marda together with a nearby 600ktpa mill formed the basis of a feasibility study a few years before RMS snapped it up, which proposed to produce 167koz over 4 years at an AISC of only $1,007/oz – while the gold price was just $1,350/oz. Brightstar Resources (ASX: BTR) recently acquired this asset in its $60 million takeover of Aurumin (ASX: AUN), and has plans to upgrade the facility and bring it into production, providing another potential development opportunity.
RMS has been aggressively expanding its position in WA, and its victory in the 2021 bidding war against Gold Road Resources (ASX: GOR) for Apollo Consolidated (ASX: AOP) is a worthwhile example of the heat getting towards that 1Moz mark can bring to a company. The takeover saw RMS acquire the 1.1Moz at 1.2g/t Lake Rebecca Gold project for $181 million ($146 million enterprise value), implying a $132/oz acquisition price when the gold price was US$1,850/oz. RMS acquired another project to work into its DFS which a few months ago outlined a plan to produce 1.2Moz at 1.4g/t Au from a combination of open-pit and underground sources. It will do this at an AISC of $2,625/oz and with a capital cost of $188 million for a 3.25Mt standalone processing plant, which at a $6,000/oz (US$4,200/oz) gold price will produce $2.98 billion in pre-tax free cash flow. The stakes are drastically higher in the current gold environment, and if RMS had to buy AOP now – it would be for a much larger price.
The terms of acquisition include cash payments of $500,000 upon a resource of 500koz and $1 million upon a resource of 1Moz, and RMS has the option to match any third party ore processing agreements for 5 years – which is likely to be a competitive tender given the project’s proximity to under capacity mines. The expert team at LM1 appear to have been chosen by RMS to ideally build Marda up into a million ounce deposit before bringing it back into production.
This was a very opportune acquisition for LM1, and it came about because RMS had too much going on. Once the immediately available high-grade sections of Marda were mined out, RMS basically abandoned the project because it had already decided to put Edna May into care and maintenance after having to choose between funding a $300 million expansion there or growing its other key asset – Mt Magnet, while having a cash balance of $446.6 million and producing NPAT of $200.3 million. The extensive bulk tonnage mining that took place at Edna May’s open pit meant a further expansion would require extreme pre-production mining costs and water pumping upgrades, while ore depletion and water-related operational issues ceased underground production in May 2024 after six years which produced 126koz at 3.46g/t Au – cutting a vital and high-grade source of ore. RMS had also spent $185.2 million acquiring Spartan Resources (ASX: SPR) shares in 2024 and paid $270 million for the cash component of its merger in 2025. With RMS focused on the development of Rebecca-Roe, as well as SPR’s Dalaranga, and further expansion of Mt Magnet – LM1 is providing an essential function to discover value at Marda that will make the restart of Edna May more attractive, which is a likely outcome at the current gold price.
Below is a cross section that depicts the strongly mineralised zone below the previously mined pit at Evanston, as well as the downhole electromagnetic anomaly that is currently being tested. A newly optimised pit shell has been designed based on a $6,500/oz (US$4,545/oz) gold price:
Source: LM1
The four deposits spread across a 3km trend at Marda Central that were defined from LM1’s 2025 drilling can be seen in the map below, which also depicts newly identified strike extensions up to 1.2km wide from rock chip samples including 209g/t Au, 49.2g/t Au and 11.4g/t Au – which will be drilled this year:
Source: LM1
Utilising DHEM is an extremely effective targeting tool at the Evanston prospect, because it contains sulphide-associated stratiform gold mineralisation in laminated cherts within a broad folded sequence. A plan map of the 1.6km long system can be seen below, which shows existing drill intercepts that have hit near-surface, flat lying lenses of mineralisation that are open along strike and at depth – along with the EM anomalies that make them extremely high priority:
Source: LM1
LM1’s extensive tenure of over 500km2 can be seen below, where it is within transporting distance of numerous mines that provide excellent development opportunities:
Source: LM1
LM1 is ultimately proving up a key asset that is likely to form a critical value-creating ore source for any number of the under-utilised processing plants in this golden region of WA. All of LM1’s ounces in the ground are on granted mining leases and are in areas of previous mining activity, which should make bringing them back into production swift work.
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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.