Source : THE AGE NEWS
By James Pearson
Pacgold Resources is onto a Hemi-style intrusive gold system in Queensland, showing surface and geophysical signs that stretch for kilometres, which has attracted some of the smartest small-cap exploration investors in the room.
When it comes to investing in small cap listed exploration companies, Acorn Capital, Resource Capital Funds (RCF) and mid-tier broker Argonaut’s global gold fund are considered to be among the glitterati of high-risk, high-reward investment funds… and curiously, all have taken big positions in Pacgold, underlining the potential of its intrusive-style Alice River gold project in northern Queensland.
Pacgold Resources recently revealed an 854,000-ounce global gold resource at its Central Area deposit, part of the company’s Alice River gold project in Far North Queensland.
Hemi-style “intrusive” gold mineralisation gained a massive following when DeGrey Mining discovered the Hemi deposit in WA in 2019. Hemi would eventually go on to give up a massive 9.5 million ounces of gold.
Intrusive deposits involve gold that has disseminated into granite that “intruded” into older host or country rock. This differs from better-known Archean greenstone-hosted gold deposits that dominate much of WA’s historic production.
Intrusives tend to be big, lower-grade bulk tonnage operations that, like Hemi, can throw up biblical-scale gold deposits. At first blush, Pacgold’s massive target-rich intrusive environment, which hugs the Alice River fault in northern Queensland for 30km, might end up fitting the bill.
Over decades, Australian geologists have walked away from granites, preferring instead to focus on greenstones. Hemi changed that and Pacgold is now in the vanguard of seasoned players looking to replicate DeGrey’s success with Hemi gold in granite.
At Alice River, Pacgold recently kicked off a 10,000-metre reverse circulation (RC) drilling blitz to target that 30km corridor, which is packed with gold hits, geophysical anomalies and historical production.
The project lies about 450km northwest of Cairns and already boasts a colourful past. Gold was discovered there in 1903 by prospector John Dickie.
Between 1903 and 1917, small-scale underground mining operations produced about 3000 ounces of gold from about 2420 tonnes of ore, with an average grade of just under an ounce to the tonne gold.
In the late 1980s, open pit mining operations extracted about 30,000 ounces of gold at an average grade of 5.6 grams per tonne (g/t). However, what’s beneath and beyond the old workings has Pacgold fired up.
Since hitting the boards in 2021, Pacgold has punched out more than 27,000m of drilling across its sprawling 377-square-kilometre Alice River holding, which resulted in a handsome payoff. About 90 per cent of those holes hit anomalous gold, pointing to a potentially rich district-scale system.
When managing director Matt Boyes took the reins in September last year his first move was to orchestrate a $4 million placement to recapitalise the company. Boyes has enjoyed a 25-year career in exploration and mining, having served stints at Solis Minerals – a spin-out of Latin Resources, Red Dirt Metals and Warriedar Resources.
With the saddlebags full of cash, the veteran geologist immediately launched a two-month drilling assault in October last year ahead of the wet season.
Some 7000m of air core and 3000m of track-mounted RC drilling were plunged into high-priority zones to test for extensions of known mineralisation at the Central target area and to test the regional targets, Posie, Jerry Dodds and Southern Target, not previously drilled.
By December, early results pointed to a big expanded system that remains fertile and far from tapped out. Compelling evidence of new mineralisation was uncovered on the western flank of the Alice River Fault zone close to Posie in the northern end of the leases. Just 300m away, similarities with the nearby Shadows prospect suggest a broader structural trend may be emerging.
The company has now marked out an initial large-scale target zone of more than 1.4km in strike that is open at both ends at the new location. Notably, the high-grade air core results have only been gathered from the shallow oxide and haven’t yet touched the fresh material below.
With that in mind, the RC rigs are back on the ground and turning hard, with another 10,000m set to go deeper.
Supported by solid geology, geophysics, previous air core success and surface geochemical hints, Pacgold’s latest drill blitz is designed to reach depths of 150m or more at its most promising targets, including Jerry Dodds, the Southern Target, Victoria and The Shadows prospects. The program will also conduct extensional and infill drilling at the company’s Posie and Central Area prospects.
Early assays from the first 1118m of drilling across eight holes are due back shortly, while a further 3000m of diamond drilling and 3000-5000m of follow-up air core drilling also in the pipeline.
There is evidence at the project of mineralised repeats with folding and stacked vein systems – a style known for spawning tier-one deposits such as Mount Leyshon, which pumped out more than 3.5M ounces. In fact, one of Pacgold’s highest-priority targets, White Lion, carries eerie geophysical similarities to Mount Leyshon’s famed pressure pipe model.
IP surveys at the company’s White Lion prospect at the southern end of its tenements are already lighting up, with a circular chargeability anomaly – similar to Mount Leyshon – growing in strength. That doughnut-shaped signal has tongues wagging and management lining up permits to punch RC holes straight into the heart of it.
Meanwhile, the company’s Central Area prospect – home to the original old open pit mine – has come up golden with intercepts up to a ridiculously long 170m at 1g/t.
The prospect is now shaping up as the first cab off the rank for development after Pacgold posted a maiden indicated resource a few days ago of 4.7 million tonnes grading 1.5g/t for 229,000 ounces of gold. The deposit also includes a high-grade underground component of 45,000 ounces running at 1.7g/t gold.
Zooming out, the numbers across the broader Alice River project are stacking up well. When all prospects are factored in, Pacgold is sitting on a combined indicated and inferred resource of 12.2Mt at 1.2g/t for 474,000 ounces of gold using a 0.5g/t cut-off.
However, without a cutoff, the company’s global mineral inventory now tips the scales at a hefty 26.7Mt at 1.01g/t for a total 854,000 ounces.
By focusing on leveraging high-impact exploration to define a gold inventory with proven scale, continuity and grade, the company says it is gunning for a 2-4M-ounce prize across the greater system. No doubt, with a project that size, management would be aware that it could also light up the radar for potential M&A action.
With a tight 130M shares on issue, $2MM in the bank and plenty of drilling lined up over the next six months, Pacgold could be knocking on the door of the million-ounce club sooner rather than later. That would only represent a tiny portion of its huge landholdings along the Alice River fault.
The intrusive nature of the geology at Alice River provides huge potential upside for a discovery of scale but for now, Pacgold appears to be hitting its straps with the drill bit. Only time will tell just how big it could end up.
One thing seems certain, however: Acorn, Argonaut and RCF don’t tend to punt projects for small outcomes – and certainly not collectively.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
