In this week’s edition of the Bargain Barrel, we look at a gold explorer that is embarking on an ambitious drilling campaign and an up and coming specialist insurer that is on track towards becoming cash flow positive.
Norwest Minerals (ASX:NWM) holds the shallow, easy to mine Bulgera gold project about 200km north of Meekatharra that already has a resource of 2 million tonnes grading 1.03 grams per tonne (g/t) gold, or 65,500 ounces of contained gold.
Bulgera was originally mined for its near-surface oxide ore to feed the Plutonic gold project, which is just 50km to southwest, before operations ceased in 2004.
Since then, there had been no work at Bulgera until Norwest acquired the project in July this year from Accelerate Resources (ASX:AX8) for $220,000, a price which managing director Charles Schaus described as a steal.
However, it is Bulgera’s proximity to Vango Mining’s (ASX:VAN) Marymia project that has Schaus excited.
“The Bulgera gold project is actually a geologically offset extension of the Marymia mine sequence, which is being explored and developed by Vango Mining, who are forming a partnership with a large Chinese company,” he told Stockhead.
Vango has enjoyed considerable success at Marymia with recent holes returning up to 10m at 22.6g/t gold from 50m while previous drilling at depth had intersected 7m at 15.7g/t gold from 144m.
The excellent results from deep drilling is what really excites Norwest given that just 140 of the 422 historical holes at Bulgera extend below 50m depth, while a paltry eight were drilled below the 100m mark.
To address the lack of deeper holes, the company has embarked on a 8,700m program of reverse circulation drilling targeting multiple near-surface gold lodes adjacent to and extending below the four historical, shallow open cut pits.
“The premise behind this drilling program is to increase that resource (at Bulgera) significantly. We will certainly like to see it double in size and hopefully the deeper drilling will be bringing us higher grade,” Schaus said.
“The reason I say that is if you look at the deep drilling in what is virtually the same set of rocks at Vango’s project, they are returning fantastic results.
“So we are hoping that the fact that we are drilling in the same rock sequences and the fact that we are drilling deeper now will give us similar returns.”
The company also plans to start a shallower 14,200m aircore drilling program in February next year to test targets along the 5km northeast to southwest strike of the Bulgera greenstone package.
“We will be chasing geophysical targets and some soil anomalies as there is fairly thick, transported cover that makes any soil sampling in the area where the cover exists basically useless because it has masked what is below it.
“So we are going in with an aircore rig to penetrate that and test the bedrock below it.”
The drilling programs are likely to be followed by resource upgrades that could drastically change the project.
“We think that Bulgera could prove to be the company-making deposit for us and the fact that we got it for such a low price, it has so much upside and because there is so much infrastructure in the area we can see it getting it into production sooner rather than later,” Schaus said.
He noted that the current development option would be to truck ore up the existing haul road to Plutonic for toll treatment.
Vango’s move to develop its Marymia project could also open up a second toll treatment option.
Schaus added that while the fairly large upfront capital cost of a heap leach development was currently off the table, it could be brought back as an option if the company managed to grow its resource, particularly the near-surface softer ore that could come from the aircore drilling.