Key Highlights

  • The maiden JORC 2012 estimate for Cross Fault is 933,000 tonnes at 1.14 g/t gold for 34,000 ounces.
  • With Cross Fault included, the Mulgabbie North gold resource is now about 294,000 ounces.
  • The estimate was prepared by BM Geological Services.
  • The new estimate feeds into a heap-leach scoping study for the project.

OzAurum Resources (ASX:OZM) announced on 9 November a maiden JORC 2012 mineral resource estimate for the Cross Fault deposit at its Mulgabbie North gold project in Western Australia. The estimate stands at 933,000 tonnes grading 1.14 g/t gold for 34,000 ounces and was prepared by BM Geological Services.

With Cross Fault included, the total mineral resource for Mulgabbie North is now about 294,000 ounces of gold, a combined total across the project's deposits. Chief executive and managing director Andrew Pumphrey described the result as an "encouraging increase" for the project.

Location and setting

Cross Fault lies on the 7.5-kilometre Relief Shear corridor and, according to the company, remains open at depth and to the north. Mulgabbie North is about 130 to 135 kilometres north-east of Kalgoorlie and is 100% owned by OzAurum.

The project is located about 3.5 kilometres east of Northern Star Resources' 4.0 million tonnes per annum Carosue Dam mill. Proximity to existing processing infrastructure is often noted for smaller deposits because it can widen the potential development options, although any toll-treatment or ore-sale arrangement would require commercial agreement with the mill owner, and none has been announced.

Why the addition matters

The Cross Fault ounces add a further deposit to the Mulgabbie North inventory. For a project being assessed as a potential heap-leach operation, more deposits within a compact area can help support mine life and provide flexibility in scheduling. The modest grade of 1.14 g/t gold is consistent with the kind of material often considered for heap leaching, a lower-cost processing route in which crushed or run-of-mine ore is stacked and irrigated with a leach solution.

Cross Fault represents about 12% of the total Mulgabbie North resource, so most of the project's ounces sit in other deposits. Its significance lies partly in what it adds to the overall inventory and partly in its potential for further growth, given that it remains open.

OzAurum said the new resource will be incorporated into its continuing heap-leach scoping study, which it has described as a low-capital approach. The scoping study will provide an early view of whether a heap-leach operation could be technically and economically viable.

What remains uncertain

A mineral resource is an estimate of mineralisation with reasonable prospects for eventual economic extraction; it is not an ore reserve, and it does not establish that Mining would be profitable. Maiden estimates frequently contain a substantial Inferred component, which carries lower geological confidence and would need further drilling before it could support reserves. Until the category split is published, the total of about 294,000 ounces should not be read as a measure of mineable gold.

Heap-leach Economics depend heavily on metallurgical recoveries, which vary between ore types and must be confirmed through testwork. Capital and operating costs, permitting, water and the gold price will also influence any outcome.

Next steps

The immediate disclosed step is the inclusion of the Cross Fault resource in the heap-leach scoping study. Further drilling would also be needed to raise confidence in any lower-category material. The scoping study results, when released, will be the next major marker for Mulgabbie North and should give a clearer view of the project's potential development path.