The first round of assays after our initiation on Leeuwin Metals (ASX: LM1) have rolled in, and they hit the extension that was hoped for at Evanston – recording 14m at 1.72g/t Au from 98m including 3m at 4.75g/t Au from 98m, as well as 9m at 1.70g/t Au from 77m including 4m at 3.01g/t Au from 77m, and 14m at 1.14g/t Au from 96m including 1m at 5.14g/t Au from 96m. These results extend the continuity of mineralisation to over 250m down-dip of the existing pit and are largely in line with the 96.4koz at 1.56g/t component of Evanston’s resource, implying strong potential to add ounces to the MRE update coming in the second half of this year. Critically, these intercepts lined up with downhole electromagnetic (DHEM) conductor anomalies, paving the way for LM1 to keep chasing the mineral systems at Marda with extreme accuracy. LM1 is also ready to commence its next drilling program, which will target the 25.7koz at 1.56g/t Au Golden Orb prospect and 87.8koz at 1.26 g/t Au Marda Central prospect – both of which have previously produced and the latter coming with some big unmined assays that have great continuity of mineralisation, such as 62m at 1.94 g/t Au from 102m, 46m at 2.2 g/t Au from 69m and 20m at 3.14 g/t Au from 75m.
These latest assays from Evanston are still all around 100m from surface and could be easily open-pit mined. This campaign was 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. The rig is still running as the 10,000m resource growth campaign continues, and there are currently 50 assays due to be released over the next 4 weeks from 4,600m of drilling completed. Between mineralisation being open in virtually all directions and plenty of EM anomalies yet to be tested, the central part of Evanston which is composed of a 1.6km trend should deliver decent resource growth. Upon zooming out to the edges of the prospect outside this focus zone, the trend becomes 4.5km long – the outskirts of which have 3m at 7.9g/t Au from 33m and 6m at 2.36g/t Au from 26m to the South and 2m at 2.39g/t Au from 44m to the North.
At just a $19.1 million market cap with $6.1 million in cash, LM1’s $13 million enterprise value means they are priced at under $38/oz, which drops to $26/oz at 500koz and just $13/oz at 1Moz. With serious potential to get to 1Moz by extending the current deposits and opportunities for discovery elsewhere on the project, and the recent MRE being achieved with excellent efficiency at under $10/oz in total costs, it’s worthwhile considering what LM1 could be worth once it reaches these milestones and begins assessing development plans – as the market typically rewards resource growth with an expanding multiple. A big deposit just above 1g/t can certainly be worth a fortune in WA, and it can be extremely profitable at the A$6,000-7,000/oz gold has been trading at. A company heading towards production is Astral Resources (ASX: AAR), and with a 1.761Moz at 1.1g/t resource, of which the reserve component is interestingly 1.082Moz at 0.9g/t Au – it is a great example of what a moderate grade at scale can be worth in a place like WA. At a $342.2 million market cap and $80.3 million in cash, AAR is currently running an EV/Resource ratio of $194/oz – which was $256/oz a couple of weeks ago when its market cap was $531.3 million before gold had another pullback.
The use of DHEM is a seriously precise targeting tool for LM1 to hunt sulphide-associated gold mineralisation, especially when it is stratiform and in laminated cherts within a broad folded sequence – so it’s worth making note of a few other gold explorers that have utlised this technique to build valuable projects. While not identical geological analogues – parts of Marda have many similarities with the likes of $290 million market cap Torque Metals (ASX: TOR) 250koz at 3.1g/t Au Paris Creek Gold Project, whose DHEM program identified strong conductors coincident with high-grade gold due to the pyrrhotite-rich sulphide zones being associated with the gold mineralisation. There’s also $708 million market cap Rox Resources’ (ASX: RXL) 2.17Moz at 5.6g/t Au Youanmi Gold Project, where EM and DHEM were used to target the down-plunge extension of a mineralised body that was made of strata-bound gold mineralisation within a sulphide-facies chert horizon, with gold associated with massive and disseminated pyrrhotite-dominant sulphides.
All of Marda’s 342.3koz resources are on granted mining leases and could move back into production very quickly with the right toll-treating deal or acquirer. $6.7 billion Resolution Minerals (ASX: RMS) vended the project to LM1 and became a strategic shareholder after mining Marda for 4 years – during which time it transported ore 191km through specially established haulage routes down to Edna May. While this 2.9Mt mine is currently on care and maintenance, it retains a 940koz at 1g/t Au resource that would greatly benefit with ore from Marda’s high-grade sections if it were to come back online – and RMS is actively assessing options for the mine. RMS mined 143koz at 1.9g/t Au between 2019 and 2023 from various deposits throughout Marda, including Golden Orb, Marda Central, King Brown and Die Hardy, while Evanston produced around 40koz between 1998-2000 under different ownership.
The 25.7koz at 1.56g/t Au resource at Golden Orb has been defined across sections of a 650m strike length that is predominately based around and underneath an existing pit that occupies 400m of strike, which itself is open in numerous directions that are likely continuations of mineralisation. This is particularly the case beneath the existing pit, where LM1 will soon test the extension of the mine sequence BIF. Golden Orb itself has a strike length of 1100m, and a lode width ranging between 4-12m, which dips roughly 75 degrees South West to a depth of 175m so far. However, the mineralised trend has actually been mapped over 3km to date, and extends out to Golden Orb West where there are significant assays yet to be followed up on, including 2m at 13.13g/t Au from 91m and 9m at 1.38g/t Au from 16m.
A cross section of Evanston’s resource block model with new drill results can be seen below, where LM1 has successfully traced high-grade mineralisation through step out drilling that lined up with a DHEM anomaly:
Source: LM1
There is plenty of scope to grow the width of Evanston’s total mineralised area as well, with numerous high-grade assays indicating mineralisation is open in different directions, and significant untested EM anomalies that should correlate with sulphides that contain gold. An updated plan map of the main 1.6km central zone at Evanston can be seen below, with the recent assays added in and areas of intense EM anomalies highlighted:
Source: LM1
The numerous deposits that make up Marda Central can be seen below. As well as targeting extensions of these key areas, LM1 will also be drilling the extremely high-grade rock chips around the outskirts of the prospect, such as 209g/t Au, 62g/t Au and 49.2g/t Au – in an effort to discover new zones of mineralisation:
Source: LM1
The Golden Orb resource block model can be seen below, which shows strong grades at the currently known (and soon to be extended) depths of mineralisation – and is only contained in a 400m fraction of the 3km total mineralised trend:
Source: LM1
LM1 has the perfect opportunity to continue demonstrating that the numerous deposits which make up the broader Marda project, especially the higher grade sections of Evanston and Marda Central, as well as Golden Orb, contain a litany of extensions that can be accurately targeted – and will ultimately provide a pathway to 1Moz. At the same time, the company is persistently targeting new discoveries across the 500km2 project, allowing for significantly more exploration upside. With an absolute onslaught of newsflow continuing for the next few months leading into the MRE update, it is an opportune time to own LM1.
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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.