The Murchison goldfields could be the best place in WA to find a new gold mine
The Murchison is one of the best places in WA to explore for gold
Competitive tension between major players Westgold and Ramelius puts toll treatment and takeovers on the agenda for juniors
Caprice Resources is in the sweet spot, wedged between the fiefdoms of WGX and RMS
In one of Australia's longest running gold fields, its infrastructure literally shaped by the historic mines the run like arteries through its landscape, two great fiefdoms have emerged.
To the north of the Murchison, centred around the historic gold rush towns of Cue and Meekatharra, is the territory of Westgold Resources (ASX:WGX), which mills over 200,000oz of the precious metal every year through plants at Tuckabianna, Bluebird and Fortnum.
To the south is Ramelius Resources (ASX:RMS), the king of the town of Mt Magnet, which has a similar production footprint out of its Checkers Mill and is charting a path to 500,000ozpa by incorporating Spartan Resources (ASX:SPR) and its Dalgaranga gold project.
The competitive tension is palpable, highlighted in 2023 by the battle between the warring parties for Musgrave Minerals and its Cue gold project – RMS won the bidding there. Westgold ended up merging with TSX-listed Karora to take on its Beta Hunt mine further south near Kambalda, but was at one point a suitor for Spartan forerunner Gascoyne before its fateful Never Never gold discovery.
Any player with a decent find in the district will become a takeover target for the hungry titans of the 133-year-old gold field. And new players are emerging that makes it even more exciting, especially with gold prices running above $5200/oz.
Meeka Metals (ASX:MEK) raised $60m this week for its Meekatharra gold project, where it is mulling the expansion of the project's 600,000tpa mill. Vault Minerals (ASX:VAU) is chasing life extensions for the Deflector gold and copper mine, TSX-listed Monument Mining is looking to revive the mothballed Burnakura plant and Catalyst Metals (ASX:CYL) has hit a $1.5bn valuation with its revival of the Plutonic gold mine further afield beyond Meekatharra.
For Caprice Resources (ASX:CRS) managing director Luke Cox, there's no better place to be looking for a fresh gold deposit in the context of an all-time boom for the precious metal, revealed by the WA Government to be contributing a record $739 million in royalties for the resource rich State alone in 2024-2025 and heading for higher climes of close to $1bn in each of 2026 and 2027.
Caprice's New Orient and Island gold projects sit at the nexus of the two big players, wedged literally between the domains of Westgold and Ramelius.
"You have two major players butted up against each other in the Murchison goldfields," Cox said.
"They have mills they need to feed and all of a sudden you've got the explorers, which are like the incubators for future resources within the area that will feed their mills."
Fill the mills
It's known Westgold is chasing additional feed for its processing plants, especially shallow open pit gold that can supplement the underground mines under its control like Big Bell and Great Fingall.
The $2.8bn gold miner has already inked a deal with New Murchison Gold (ASX:NMG) to process ore containing around 140,000oz over 2.5 years through its Bluebird plant near Meekatharra from the junior's Crown Prince gold deposit.
Ramelius, meanwhile, has been acquisitive in recent years, bolting on higher quality but short live resources like the Penny gold mine and Break of Day, the latter literally located next door to Caprice's ground.
CRS has a headstart on permitting. Its New Orient and Island projects sit on separate granted mining leases, removing a critical hurdle to get any gold project up and running given the time it takes to secure Aboriginal heritage clearances and State Government approval to have a mining lease granted.
Now the aim is to drill out something worthy of getting the mid-tiers intrigued.
The Vadrians Hill prospect at Island has already shown its wares – a headline strike of 28m at 6.4g/t in February proved the catalyst for the $37m capped explorer's 160% YTD share price rise.
A 7000m program recently wrapped up, with 2000m added to an initial 5000m campaign as gold continued to show. Work is also ongoing to prove up the tighter drilled New Orient, where a historic resource was once reported.
In the more than two decades since drilling has gotten denser, deeper and expanded the known strike of gold mineralisation, Cox says. At Vadrians, the aim is to outline a potential open pit with drilling continuing to find more gold.
"Initially we're looking at open pit material because that'll be the material that's of more interest to potential players in the area," he said.
"When you look at (Ramelius') Break of Day, we'll be chasing one of these to depth, either Baxter or Vadrians, North Vadrians, South Vadrians, we've just got a new discovery down here.
" There's always things that we can start to chase.
" At the moment, we're doing the shallower drilling, and then we'll start following up with deeper drilling. That's where you start getting some significant ounces."
The critical thing for companies like Ramelius and Westgold is to keep their mills fed to the optimum level. Cox, who was once mine manager at the Edna May gold mine in WA, pointed out they need to run at a critical mass or the ball mills – rotating barrels that grind down and liberate gold from mineralised ore before it is leached with cyanide – literally "eat themselves".
The steel balls which act as the grinding media can erode against each other without the right amount of ore to act as a buffer. Filling the mills isn't a luxury, it's a necessity.
Handily, work completed by previous owners has shown the ore at Island is similar to that which has been processed at Ramelius' Checkers mill for decades. Caprice will be taking its own samples for metallurgical testwork in upcoming diamond drilling.
The golden radius
Forget the golden ratio, the golden radius has become the key equation for mill operators in WA's hot gold scene.
Back in his Edna May days, Cox recalls drawing a 100km circle around the Westonia mine's processing plant. Everything inside was fair game for M&A or toll treatment deals.
With gold prices at record highs, that circle is expanding. Mines now located between 100-200km from a processing plant can be comfortably trucked and milled at a profit.
Where Caprice thinks its ground position stands out is that if the gold price were to collapse, that radius could shrink to 50km.
"If the gold price goes down to US$1500/oz, what are you going to do? If the gold price goes up to US$5000/oz, how are you going to bang for as much material as possible to make like hay while the sun shines?" Cox said.
"So you need all of these juniors to prove up resources that become potential feed sources for there mills."
For CRS, Cox said the key thing was it knows the gold is there in the ground, it just needs to do the work to prove up deposits of significance, and recently raised a cool $7m in quick time from investors to do just that.
Who else is aiming to join the Murchison empire?
There are plenty of other gold explorers looking to outline and mine resources across the historic Murchison Goldfields.
Aforementioned New Murchison Gold is an obvious one, given their processing tie-up with Westgold and denied media speculation of a takeover approach from WGX last last month. NMG is planning to develop Crown Prince at a cost of just $5.4m in the second half of this year, with its ore reserve running at 890,000t at 4.8g/t for 140,000oz.
Odyssey Gold (ASX:ODY) owns the Tuckanarra project where it boasts a significant resource of 407,000oz at 2.5g/t, as well as an access and collaboration agreement to potentially process the ore with its joint venture partner Monument Mining at the Burnakura mill. Monument is currently looking into the reopening of the plant and its expansion from 260,000tpa to 750,000tpa.
Great Boulder Resources (ASX:GBR) owns the Side Well gold project, containing over 500,000oz on Meekatharra's doorstep and is regularly touted as a potential takeover prospect for Westgold.
Further afield Strata Minerals (ASX:SMX) is looking to see if the mineralisation hosting Ramelius' ultra high grade Penny gold mine continues to the south. Initial drill results returned some low grade gold hits, but provided encouragement to plan another round of drilling.
Closer to Wiluna on the cusp of the Murchison and Northern Goldfields, Western Gold Resources (ASX:WGR) is planning FID on its Gold Duke utilising a processing deal with the operators of the Wiluna gold mine.
The site would deliver 447,000t at 2.55g/t Au for 34,000oz according to a scoping study, generating an estimated undiscounted accumulated cash surplus of $38.10 million against a capital bill of just $2.1-2.5m.
Star Minerals (ASX:SMS) is also aiming to become a small-scale gold producer at its Tumblegum South project, with India's Bain Global Resources on board as a strategic investor. With the Indian mining contractor's help it wants to bring Tumblegum South into production in early 2026.
A scoping study suggested at gold prices from A$3000 to A$3800/oz – well below current levels – the updated production target for the Tumblegum South Gold Project ranges from approximately 167,000t at 2.43g/t producing 11,800oz gold, to 255,000t at 2.16g/t producing 15,900oz gold.
That would generate an undiscounted accumulated cash surplus after payment of all working capital costs, but excluding pre-mining capital requirements, of approximately A$9.4m to A$19.6m. Tumblegum South contains a total resource of 45,000oz.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
16 minutes ago
- News.com.au
Houses for auction decrease as winter season emerges
REA Group Senior Economist Anne Flaherty discusses the property market and the auctioning happening this weekend. 'We have seen the number of homes coming up for auction decrease in line with winter,' Ms Flaherty said. 'We are around 10 per cent below the same levels we were seeing this time last year. 'We are still seeing very strong levels of buyer demand."
ABC News
23 minutes ago
- ABC News
More and more aussies turning to social media for news
More Australians than ever are getting their news from social media with the big platforms expanding their online reach over that of Aussie newsrooms. We're also becoming more and more worried about misinformation but, depending on our political persuasions, we disagree about where it's coming from. The University of Canberra's News and Media Research Centre's digital media report for 2025 lays our news consuming souls bare. It's been a week for strange PR apologies, or non apologies. Three Australian companies illustrate how not to do it. And it's Christmas for audio statisticians! The radio stars aligned this week with three sets of data showing us how Australians are listening. Guest: Associate Professor of Communication at the University of Canberra Dr Caroline Fisher
News.com.au
35 minutes ago
- News.com.au
Supercars Darwin: Barry Ryan's frank verdict on fall of Erebus
Erebus chief executive Barry Ryan has offered a frank reflection on a crippling 18 months that has seen his title-winning team slip to last in the Supercars standings. After a fairytale start to the Gen3 era, which saw Erebus win both the drivers' and teams' titles in 2023, the squad has endured a string of well-publicised internal struggles. Will Brown defected to Triple Eight at the end of 2023, while reigning champion Brodie Kostecki missed the start of the 2024 season while in dispute with the team, which coincided with big name sponsors such as Coca-Cola walking away. Kostecki would later return and win the Bathurst 1000, however left to Dick Johnson Racing at the end of last season – along with both Erebus race engineers George Commins and Tom Moore. Team principal Brad Tremain also left the squad at the end of 2024 with plans to pursue an opportunity in IndyCar in the US. That has prompted a significant, and ongoing, internal rebuild, highlighted by Ryan himself needing to take the race engineer role on Jack Le Brocq's car. It's been tough going for Le Brocq and rookie teammate Cooper Murray, too, with Erebus slumping to last in the teams' standings ahead of this weekend's Darwin Triple Crown. 'There's no hiding behind it; the last 18 months have been really hard on our team. Really hard,' said Ryan at Hidden Valley on Friday. 'Losing key people … our last rebuild was 2021 and we got Brodie and Will and no one believed, really, in that. And we won a championship two years later, and we won Bathurst the year after. 'We've gone back to where we were [in 2021]. 'It's hard on the team. To replace people like George, Tom and Brodie is really hard. Brad Tremain is going to kick goals in America. That's four key people out of the team, it's really tough to replace that. 'It's going to take time. We can't hide behind that. I can only do so much and the boys that I've had there for six, seven years can only do so much. 'Unfortunately I'm still race engineering, and I say that because I shouldn't be. I should be running the business. But until we can get the right person to do that role; we're trying to self-promote from within, we're trying to find an engineer we can just put in and be really successful. 'It's a balancing act and I can't say I'm really enjoying it. We got to a point where we were beating Triple Eight and we wanted to be that team that was the best year in, year out. 'Massive respect to Roland Dane for what he did for that whole time he was there, and what they're still doing. We got there and we just couldn't keep the momentum. 'No matter what everyone thinks the reason is why. We just couldn't keep that momentum that teams like that can do. 'Anyway, it's a lesson learned, this whole situation. We'll try not to go through it again. 'We'll get there again. We're confident in our team. We've got a great bunch of loyal staff that want to stay on and want to see us get there again and win championships and Bathursts. 'We're still going to go to Bathurst trying to win there this year. We'll have the belief and we'll have the drivers than can do it.' Erebus showed signs of improvement on track on Friday, with Murray 11th in the second practice session and Le Brocq in 19th as Andre Heimgartner led the way for Brad Jones Racing ahead of Ryan Wood and Will Brown.
