Key Highlights

  • A second drill rig is now operating at the Wilga Flats copper-gold project.
  • The company reported A$4.35 million in cash at 30 September.
  • Work spans four New South Wales programmes, including skarn targets at Breakfast Creek and a Gundagai start-up.
  • Rock chips and soil anomalies coincide with conductors, providing clear drill targets.

Koonenberry Gold (ASX:KNB) has updated the market on four exploration programmes across New South Wales, with a second drill rig now operating at its Wilga Flats copper-gold project. The company reported A$4.35 million in cash at 30 September.

Executive chairman Paul Harris said the focus remained on advancing the most prospective opportunities across the portfolio. With limited cash and several active projects, that prioritisation is the central issue for investors.

Wilga Flats: testing a blind porphyry

Wilga Flats lies about 20 kilometres north-north-west of the Cowal gold mine, which has more than 15 million ounces. Proximity to a major mine is context only and does not mean similar mineralisation exists at Wilga Flats.

Drilling is following the 4.2-kilometre Olaf's Trend. Three reverse circulation holes for 744 metres have been completed, and a diamond hole of about 450 metres, 26WFRCD004, was nearing its planned depth. That hole is testing a blind porphyry copper-gold target defined by a magnetic high extending more than 1,000 metres vertically, an induced polarisation chargeability halo and zoned soil geochemistry.

The second rig has begun four further RC and diamond holes on a central target defined by a copper-in-soil anomaly of about 1.2 by 0.5 kilometres, a coincident gold anomaly and rock chips up to 1.37% copper. Early RC holes in the north intersected zoned alteration and porphyry-style quartz-magnetite-pyrite veinlets. These are visual observations only; they say nothing about grade until assays are received. Assays from the first three holes are expected late in the December quarter.

Breakfast Creek: three skarn targets

At Breakfast Creek, 27 new rock chip samples included 19.05% copper in float and 3.22% in mullock. Infill soil sampling of 439 samples and reprocessed historical electromagnetic data have defined three targets: Balbardie, a soil anomaly of more than 1.8 kilometres with an untested conductor; a Bimberoo copper-gold skarn target with a 700-metre undrilled conductor; and a Bimberoo tin-indium target with two undrilled conductors.

Rock chips and float are selective and do not represent average grades. The value of the work lies in the coincidence of soil anomalies and conductors, which gives clear drill targets. Permitting and logistics are under way, and no resource has been estimated.

Gundagai and Dunedoo

At the newly acquired Gundagai project, on-ground exploration has started and large-scale soil sampling across the Big Ben trend will begin shortly. Historical results there include rock chips up to 22 grams per tonne gold and 20 metres at 1.78 g/t from 27 metres.

The maiden seven-hole programme at Dunedoo was less successful. Hillside returned only low-grade gold-silver anomalism, such as 36 metres at 0.10 g/t gold and 3.84 g/t silver from surface. Bolinda Vale returned no significant gold or copper in four holes, with geophysical anomalies explained by pyrite and magnetite alteration. Reporting the misses alongside the positives gives a more complete picture of the portfolio.

Why porphyry targets are attractive

Porphyry copper-gold deposits are prized because they can be very large, supporting long-life bulk Mining operations. The Lachlan Fold Belt in central NSW hosts several such systems, which is why explorers are drawn to blind targets under cover. The flip side is that most porphyry targets drilled never become deposits, and confirming one usually requires multiple deep holes.

Other interests

Newmont has completed diamond drilling at the Junee joint venture, where Koonenberry retains a 20% free-carried interest, and assays are under way. Preparations continue for drilling at the Queen of Sheba target at Enmore.

What to watch

The Wilga Flats assays, including the deep diamond hole, are the nearest meaningful catalyst. Because cash must fund drilling across several projects, investors should also watch for any Capital raising or decision to narrow the portfolio further.