A prized Victorian asset that’s part of a goldfield which previously produced 400koz at 15g/t Au is set to be mined again for the first time since 1995, with Aureka (ASX: AKA) having received a mining licence for the Comstock Pit, Walkers Zone and main Comstock Shear at its St Arnaud Project – just 4 months after the application was submitted. Ore will be processed at the recently acquired Wedderburn Mill, which is 45km away and has a 42ktpa capacity that AKA is intent on expanding. Drilling at the producing Fiddlers Creek mine is testing continuity around previous hits of 1.19m at 40.48g/t Au from 19m including 0.06m at 786.1g/t Au from 20.13m, and 1.57m at 31.09g/t Au from 135.14m including 0.26m at 134g/t Au from 136.45m, targeting additional ore for Wedderburn that will continue the exemplary figures currently running through the plant – which are 7g/t Au of ore at 86% recovery rates and with 90% payabilities. Mineralisation has also been extended 725m along strike of Irvine’s 398.3koz resource at 2.59g/t Au, with a rapidly expanding mineralised footprint continuing to emerge with new drilling returning 4.25m at 1.42g/t Au from 173m, including 1.5m at 3.16g/t Au from 173.3m. Exploration and mining licences are being approved in record times and en mass across Victoria as the state seeks to rapidly revive its resources industry while maintaining a high level of diligence, with another notable recent example being Southern Cross (ASX: SX2) gaining approval to add underground drilling, which will turn it into one of the largest pre-development drill-outs globally as it awaits an outcome of its mining licence decision that was applied for in late September and has a firm 120 day turnaround time. AKA has a litany of options to increase mining, throughput and capacity at its gold mining operations, and the recent strong performance in its share price indicates the market is getting ready for the company to do just that – but the current $39.6 million market cap at $0.145/share leaves room for significant potential upside once Comstock enters production.
The Walkers Pit will be where AKA first seeks to get mining underway, with the previously producing asset containing hits of 14m at 7.2g/t Au from 18m and 2.2m at 27.4g/t Au from 63.2m, which recently had some additional shallow intercepts added including 0.7m at 57g/t Au from 45.5m. There’s also the southern Comstock Pit, where 4.4m at 8.9g/t Au from 102.8m was hit beneath the last mined area. Both of these sites already have existing pit access and roads, as well as near and at surface mineralisation – which sets up an excellent base for a low capex operation to commence.
The initial campaign at Fiddlers Creek comprises at least 400m of highly concentrated drilling designed to test mineralisation around existing underground workings, giving the operating mine its own opportunity to increase feed. As well as the headline assays above, previous intercepts that are being followed up on include 1.87m at 21.21g/t Au from 97.23m, including 0.19m at 156g/t Au from 98.91m, and 1.41m at 13.77g/t Au from 5.65m – while an exciting amount of silver mineralisation was hit in 0.35m at 1,600g/t Ag and 1.2g/t Au from 23.35m. The current drilling is following quartz veins that pinch and swell within the shear, with extensions open along strike, down dip and towards the southeast plunge. Defining continuous shoots around existing development would support additional mining areas and more regular processing campaigns.
Irvine’s northern discovery sits around 500m south of the Stawell Granite and follows geophysical targets onto faulted basalt and sediment contacts, which alongside the shallower result, also returned 5.65m at 0.83g/t Au from 341.5m, including 0.85m at 3.19g/t Au from 343.3m. Gold has now been identified across a footprint exceeding 5.5km, with exploration addressing targets beyond Resolution and shallower extensions towards Tenacity. The northern results support further drilling along the prospective contacts, and as Irvine’s scale continues to grow – it progresses towards AKA’s goal of either a standalone development or a deal with the Stawell Gold Mine, which is operating at 75% capacity and mines slightly above 2g/t Au ore from up to 2km underground.
There’s a lot that can be done by niftily acquiring second hand equipment in mining, and the Gekko plant that was purchased from Victoria’s Morning Star mine for $620k formed the core of Vertex Minerals’ (ASX: VTX) Hill End upgrade, replacing a 30,000tpa plant with a circuit designed for 110,000tpa. VTX commissioned the plant and built a TOMRA ore sorter for under $9m, with Gekko refurbishing and reinstalling the plant, while Vertex was able to reuse its jaw crusher, gold room, power generation, water systems, workshops and roads – and the automated plant was designed for just two operators. There are some key differences in the two operations, with ore sorting rejecting waste before gravity recovery and coarse gold being liberated without a ball mill, while Wedderburn combines grinding, gravity and flotation – but it highlights what can be possible when minimal amounts of capex are strategically deployed into existing infrastructure even in a small operation.
The magic of the new framework set up in 2023 that centralised and fast tracked the approvals process for mining and exploration activities is reaching a level of efficiency and consistency that could justify investors reassessing Victorian gold valuations closer to what something similar in WA would be. The Resources Victoria Approvals Coordination system has dramatically improved the landscape for resources endeavours in the state and there are now a respectable number of examples that demonstrate that the unnecessary elements of bureaucracy previously holding up permitting processes have effectively been gutted. We’ve been out on site visits to AKA and SX2, as well as the Alkane Resources (ASX: ALK) Costerfield mine and the Stawell Gold mine. Combined with a presentation directly from Resources Victoria on the goals of its regime – which has been followed up with numerous key and timely approvals – the general consensus is that the state’s mining revival is in full swing.
SX2’s Sunday Creek exploration decline is going to turn 11 surface rigs into a massive 24 surface and underground rigs, combined with Catalyst Metals’ (ASX: CYL) Four Eagles exploration tunnel work plan approval provides solid precedents for conducting underground drilling at Irvine, which would be a big leg up in what can be achieved on the continued discovery front at the project. Underground access could improve drilling density and provide geological, metallurgical and geotechnical information for a future mine plan, connecting resource growth with the feed requirements of an expanded Wedderburn operation.
The southern Comstock drilling sits beneath existing workings, providing targets for the resource definition and mine design work now following the licence grant:
Source: AKA
Comstock’s granted footprint encompasses the existing pit and proposed ramp, waste dump and stockpile areas, showing how a moderately sized operation could use the previously disturbed site:
Source: AKA
Fiddlers Creek’s historical intersections surround existing underground development, giving the current drilling program specific targets for extending the operating mine:
Source: AKA
Irvine’s northern discovery expands the area being tested beyond Resolution, while the wider target distribution shows the larger exploration opportunity across what is now a massive prospect:
Source: AKA
Comstock’s licence grant gives AKA a tangible development milestone behind its next source of mill feed, and a relatively small selective operation could materially increase Wedderburn’s utilisation, while the company investigates intermediate processing additions that can offer a way to build capacity alongside the mining inventory.
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