The recently upgraded MRE at Verity Resources’ (ASX: VRL) Monument Gold project in WA has delineated a highly refined 137.7koz at 1.72g/t Au resource that has serious potential for development, with a scoping study to commence on the open-pit resource of 60.6koz at 1.68g/t Au based on toll-treating at one of the many nearby mills, including $7.4 billion Genesis Minerals’ (ASX: GMD) 3Mtpa Laverton mill – which is hauling in lower grade ore from numerous sources further away. Extensive regional exploration drilling has so far defined a mineralised corridor of 7km within the 20km BIF strike at Monument, with the resource being contained within a section just over 1km across the Korong and Waihi prospects. VRL has also just commenced a 56 hole, 2,800m aircore drilling program across 5 prospects at Monument, following up on largely untested areas across the project’s 20km of strike – but with high-priority signals such as geophysical anomalies, rock chips up to 21.5g/t Au, shallow intercepts up to 3m at 2.51g/t Au, outcropping BIF along strike from a GMD-owned 34koz resource, and a structural target that sits on a contact of gold bearing intrusions with the same multi-element geochemistry as the 1.5Moz Jupiter and 7Moz Wallaby deposits.

An interesting peer comparison is $47 million market cap ($39 million enterprise value) GoldArc Resources (ASX: GA8), which holds a 200koz at 1.82g/t Au resource in WA – of which 152koz at 1.7g/t Au in the same region as VRL is the subject of a development plan that will target GMD’s other 1.4Mt Leonora mill 60km away with BML Ventures, a rising small-scale WA gold developer/operator that has taken a position in GA8 and has been seen in a number of other similar open-pit and toll-treating operations, including AWJ and MRT. GA8 also has a 48koz at 2.15g/t Au resource and a development partnership with MMS, and just raised $7.2 million to fund ongoing exploration. At a $7.85 million market cap, VRL has extremely similar current resources, in the same region and with the same development options – and is likely one partnership and minor scoping study away from rerating upwards and gaining a developer premium on its valuation.

Step out drilling has extended gold mineralisation within the BIF main lode from 900m to 1,400m at Korong, and from 150m to over 800m at Waihi, and with both deposits remaining open along strike and at depth – there is near-term scope for resource expansion. There are numerous shallow and high-grade intercepts to follow up that are well outside the existing resource envelope, such as  2.9m at 2.51g/t Au from 8m at Korong and 3.2m at 5.27g/t Au including 0.8m at 21.3g/t Au at Waihi. Outside of extending Korong and Waihi, VRL has three key and immediate prospects for growth – Triton, Perseverance and Fred’s Well. 

Fred’s Well is a largely untapped opportunity with 1.1km of strike and some outstanding assays such as 24m at 3.24g/t Au from 44m including 12m at 6.35g/t Au, and 8m at 2.09g/t Au from 40m. The Triton prospect is an analogue to Fred’s Well by way of lying along a favourable mafic-siltstone contact, and VRL recently intersected broad supergene gold in the shallow weathered profile with aircore drilling – which will soon be followed up by deeper RC drilling to identify the primary mineralisation beneath. 2km North of Waihi is the Perseverance prospect, where first pass drilling in an untested area hit BIF mineralisation of 2m at 1.24g/t Au from 86m which coincided with above 20ppb surface gold anomalism, and rock chips have reached up to 21.5g/t Au. VRL also just launched an extensive sampling program across Monument, a section of which is right next door to GMD’s 34koz at 1.1g/t Au resource that the mining major has keenly held on to, with the McKenzie Well and Mckenzie Granite currently being mapped. The Gum Well and Star Well prospects are also being included, the latter of which has a previously defined a 250m BIF-coincident anomaly, and a 700m pathfinder and magnetic anomaly that has peaked at 453ppb Au – with surface rock chips previously returning up to 6.17g/t Au from outcropping chert/BIF.

In line with the JORC standards of the reasonable prospect of eventual economic extraction (RPEEE), VRL’s resource uses a shell based on a $5,500/oz gold price and 0.5g/t Au cut-off grade, with toll treatment and 40km of haulage that is based on realistic mining and milling costs for this scale in WA. It also factors in metallurgical recoveries of 89-92.75% which were taken from previous work at Korong, and a 2% royalty. There’s a lot of key parameters here that will likely flow through to the scoping study, and it’s worth reviewing other studies and operations of similar scale in WA – and BML Ventures is emerging as a central player in these small developments. 

BML bankrolled and operated the Boorara deposit belonging to $310 million market cap Maritana Minerals (ASX: MRT), which was based on a 2024 study of 49.5koz at 1.24g/t Au that would be hauled 56km to NST’s 2.8Mt Paddington mill over a 14 month period. With 92.8% recoveries and a 6.1:1 strip ratio, the operation was projected to generate $19.9 million in free cash flow at a gold price of just $3,300/oz – which would have been $173.35 million at $6,400. Mining did eventually commence before MRT acquired its Black Swan processing facility, which it then began stockpiling ore for. Another small and highly relevant open-pit development BML executed was Auric Mining (ASX: AWJ)’s Jeffrey’s Find in WA, which was completed at an AISC of $2,645/oz from 29,534oz at 1.58g/t Au.

Just under 30km away from the beginning of Monument’s 20km of strike is GMD’s 3Mtpa Laverton mill, which last quarter processed 738kt at 1.2g/t for 24.8koz after accounting for 90.3% recovery. However, 138kt at 2g/t Au for 7.9koz after 89.1% recovery was from Brightstar Resources (ASX: BTR), as a part of an ore purchase agreement that has since been completed given BTR is now building up stockpiles to support its under-construction 1.5Mtpa mill nearby, which will commence operations in mid-2027. Part of this new gap in ore supply will be filled with the Bruno Lewis prospect, where GMD is getting ready to mine an initial 170koz at 1g/t Au section that will be hauled 60km to Laverton. GMD sources its ore from numerous prospects in the vicinity of Laverton, such as Jupiter – which last quarter mined 7.4koz at 0.7g/t. 

Given all of these factors, it is clear that the indicated, open-pit resource of 57koz at 1.73g/t Au from Monument – or even just the 49.8koz at 1.68g/t Au Korong section – would make for a brilliant additional ore source for Laverton. GMD’s $639 million acquisition of Magnetic Resources (ASX: MAU), at an implied EV/Resource value of $251/oz, bolster’s the planned expansion of the Laverton mill up to the 5Mt currently under consideration. GMD also has the 1.4Mtpa Leonora mill just over 100km from Laverton, and its building a 4Mtpa processing plant nearby at Tower Hill – which would bring GMD’s total milling capacity in this region that VRL sits in to over 10Mt.

There probably isn’t a better place in the world to have a gold resource that is prime for processing at a nearby mill, and the map below depicts just how well positioned Monument is in relation to many processing plants and other significant deposits:

Source: VRL

Much of the recently completed 11,000m RC and DD campaign was done with a tight 25m by 25m drill spacing inside the MRE envelope, which allowed for a high standard of revalidation of the previous resource. The waterfall chart below breaks down the key changes between the previous Korong resource and the upgraded MRE, highlighting development-driven adjustments including a tighter wireframe interpretation, which further constrained the mineralised envelope around better-defined zones of mineralisation, with infill drilling ultimately supporting a higher-grade resource model:

Source: VRL

The sampling program currently underway at the McKenzie Well, McKenzie Granite, Star Well and Gum Well prospects can be seen overlaid with regional aeromagnetic imagery below, which are being lined up with the geophysical and intrusive targets that will be drilled (note resource figures for Korong and Waihi are pre-MRE update):

Source: VRL

With a scoping study that reflects metrics similar to the small-scale developments outlined here, as well as a couple more decent hits that demonstrate extensions in the high-priority prospects separate from the existing resource – and an expanded drilling campaign to go after them – VRL could re-rate to somewhere similar to GA8.

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