Barton Gold (ASX: BGD) was one of 150 companies to list on the ASX in 2021, but perhaps none have worked at such a breakneck speed to deliver post-IPO results to market.
The South Australia focused gold explorer listed in June and was ready to drill by July, beginning their planned exploration programs including some ~11,000 metres of reverse circulation drilling across the Tarcoola and Tunkillia Projects.
Initial programs were designed to test priority targets identified from new geophysical surveys and detailed reprocessing of historical data. These programs have made ‘rapid and significant’ progress on a very cost-efficient basis, with geophysical and drilling programs validating several pre-IPO theses and confirming multiple new gold zones.
Managing Director & CEO Alex Scanlon explains: “Gold exploration in the Gawler Craton has traditionally been more challenging than other domains owing largely to the challenges of exploring under cover. However, since we acquired the Barton assets and started advancing them we have seen an increasing level of attention to gold exploration in the central Gawler Craton. We have seen a flurry of smaller scale M&A and exploration activity around us given that we own the region’s only gold mill. We expect to see further increasing levels of in-ground expenditure as our neighbours work to identify resources which might access our mill.”
With strong support from the South Australian government alongside the use of modern geophysical technology, Barton Gold have set themselves up for successful post IPO results and a promising 2022.
Scanlon is a financial economist with over 15 years’ experience in financial analysis, consulting, structured finance and mining advisory, investment and management. He was previously Managing Director of PARQ Capital Management and a Director with Lusona Capital, where he focused on corporate advisory and principal investments in the resources sector.
“I am always looking through my ‘economist’s lens’ for assets which are high quality but mis-priced because of the market’s misunderstanding or psychology and perceptions”
“My professional background is as an investor and a structured financier, and I am always looking through my ‘economist’s lens’ for assets which are high quality but mis-priced because of the market’s misunderstanding or psychology and perceptions. Tarcoola and Tunkillia are clear examples of this, having been previously affiliated by ownership with a failed underground operation. However, literally nothing about that failed operation affects these projects and they have extensive exploration upside potential. The outstanding results of our post-IPO drilling programs have validated this and we are very pleased with the path we are on.”
Sitting on a gold mine
Barton owns ~4,660km² of prospective gold tenure and JV gold rights in South Australia’s Central Gawler Craton via its Tarcoola and Tunkillia projects, encompassing a ~1.1 million ounce Au @ 1.2 g/t Au attributable JORC (2012) Mineral Resources base.
“The Gawler Craton itself is one of the most richly mineralised terranes in Australia, and host to world-class mineral deposits including Prominent Hill, Carrapateena, and of course Olympic Dam. These three operations are located in the ‘IOCG belt’ on the more eastern margin of the Gawler Craton, whereas Barton’s projects are located ~150km west in the Central Gawler Gold Province which runs roughly parallel to the IOCG belt (from NW to SE).”
The ground is described as under-explored, with new, innovation-driven exploration work showing that assets are far more substantial than originally thought.
“Despite a more than 100 year history of high-grade gold production, modern systematic gold exploration in the central Gawler Craton has not occurred. Barton has aggregated the most promising ground, with the majority of ‘modern’ historical gold deposits and mineral occurrences, and is undertaking a dedicated exploration driven approach to unlocking and developing a major gold district for South Australia.”
In addition, the company owns the region’s only gold mill, sitting adjacent to the historic Challenger Mine, and which brings a 650,000 tonnes per annum capacity and an historical ~94.5% recovery rate. The mill is surrounded by a large exploration license where Barton holds 100% of the gold rights, and multiple JV tenements hosting a 319,000oz Au (@ 1.1 g/t) JORC (2012) Mineral Resource within ~40km of the mill, where Barton has a minority ~19-21% joint venture gold interest.
Since its IPO in June, Barton has pursued an aggressive exploration strategy at both Tarcoola and Tunkillia, delivering ~10,300m in drilling, ~2.6km2 ground-penetrating radar, and ~80.5km2 of gravity surveys.
This work has resulted in a ~66% increase in total mineralised strike and incredibly, a 100% success rate in confirming a new discovery or zone of mineralisation with every prospect targeted.
Importantly, this has also included a ‘high grade’ open pit extension plus 25 new targets at Tarcoola, along with the discovery of two additional gold zones adjacent to the 223 Deposit at Tunkillia.
“Every work program undertaken continues to affirm that Tarcoola and Tunkillia host two large-scale, highly prospective systems and we are steadily identifying and building out gold mineralisation on each. We believe we have just scratched the surface, and we are targeting open-pittable, multi-million ounce mineral resource potential across the two projects.”
Technology-focused exploration unlocks Tarcoola potential
Tarcoola has proven to be an exercise in starting with the basics and moving forward with a technology-minded approach, reinterpreting the geological understanding of the project, applying a range of new exploration methods and identifying obvious targets.
The project area was host to significant artisanal gold production during the early to mid 20th century, with around 77,000 ounces of gold recovered from 640,000 tonnes of ore between 1900 and 1955, with an average grade of over 37 g/t Au.
The Perseverance open pit mine, which was in operation from 2017 to 2018, achieved average grades in excess of 4g/t Au despite limited work outside of the main target area.
Based on geophysical baseline work, Barton was able to identify large structural elements that run down to a crustal fault and interact extensively to intrusives pushing up against Tarcoola Basin. Barton believes these features are responsible for the project’s high-grade mineralisation. The company has also identified more than a dozen parallel and cross-cutting structures which are analogous to the main mineralising structure of the Tarcoola open pit mine.
A 5,300 meter drill program has been completed next to the Perseverance open pit, discovering a new ~350m long shallow-gold zone dubbed ‘Perseverance West’, which is expected to extend the boundaries of the existing mine and remains open along strike.
The drilling also provided confirmation of the existence of the 500m long ‘Deliverance’ gold target, with assays marrying-up with data from historical exploration work.
Further work including ground penetrating radar has validated ML target structures and identified over 25 new shallow targets, all within 1.5km of the open pit, while high-resolution geophysics has revealed a new regional structural framework, pointing to a potential repeating high-grade system of analogous structures across ~14km of the Tarcoola Project.
Tunkillia continues to deliver high-grade results
Over at Tunkillia, which is believed by some to be one of South Australia’s most exciting undeveloped gold projects, Barton has been undertaking a back-to-basics exploration program in much the same vein as work carried out at Tarcoola.
Geological remodelling at the 1,285km² project has focused on better-defining resource boundaries by removing low-grade mineralisation, along with sub-domaining of the project’s mineralisation.
This has assisted Barton to establish a more workable resource model by zoning-in on a series of higher-grade ore zones, and in turn providing greater development options.
Barton released a mineral resource upgrade in October 2020, with the JORC resource at its cornerstone 223 Deposit weighing-in at 965,000 ounces at 1.15 g/t Au, and importantly with 68% sitting within the indicated resource category.
The 223 Deposit puts Barton’s total JORC Mineral Resources at ~1.1Moz (@ 1.2 g/t Au) with ~90% coming from a single continuous ore body. This is, incidentally, an almost identical mineral resource profile to Apollo Consolidated Limited (ASX:AOP) which is currently being acquired by Ramelius Resources for some ~$180 million, while Barton is valued around $37 million.
A recently-completed, 5,362m Phase 1 drilling program has also confirmed the central area of the 223 Deposit as a ‘high grade’ zone offering an improved development profile, with two additional zones of mineralisation identified dubbed ‘223 North’ and ‘Area 191’. The program has delivered a 60% total increase in mineralised strike to ~4km at the Tunkillia Project.
Southern Hub – a vision for a more cost-effective regional solution
Barton’s Southern Hub Strategy, combining the district-scale Tunkillia with higher-grade ore from Tarcoola, has underscored the company’s belief that a unified approach would generate superior returns for shareholders based on current assets.
“As with the exploration and discovery theme, we are looking at scale here. Tarcoola and Tunkillia are located only ~70km apart and are highly complementary in several ways. As each project becomes more interesting, so too does the other because they can easily be co-developed, with Tunkillia providing large-scale, lower-grade baseload feed to a new mill on site, and Tarcoola contributing higher grade ore from open pits to increase the average feed grade.”
Barton believes that it can achieve significant cost savings by constructing a centralised mill near the project’s mine site, supplemented by ore shipped down from Tarcoola. This could see potential 50-60% savings in haulage costs for Tarcoola ore compared to the180km trip to the Central Gawler Mill.
Barton also retains the option to use the existing mill for a ‘stage 1’ startup with the construction of a second plant in the Southern Hub leading into large scale combined Tarcoola and Tunkillia operations. This would then leave the Central Gawler Mill in a position to anchor regional consolidation around the Northern Infrastructure Hub.
“The benefit of our current Central Gawler Mill, aside from it being the only one in the region, is that it can provide ‘Stage 1’ operational processing capacity for Tarcoola ore during and development of a new Tunkillia mill. This mill processed Tarcoola ore during 2017 and 2018 with very high recoveries (~94.5%). Restart costs would be limited and Tarcoola has an existing ML, so operations could commence fairly quickly and cheaply, and when a new Tunkillia mill is commissioned we could simply divert Tarcoola ore to the south and reduce our logistics costs by some ~ 50% on that material.”
Experience powers growth
Scanlon is joined by an experienced team tasked with pushing forward Barton’s aggressive exploration strategy: “We have built a Board and Management team which reflects our forward ambitions, and which we are continually evolving to expand our execution capabilities on all fronts.”
“We have built a Board and Management team which reflects our forward ambitions, and which we are continually evolving to expand our execution capabilities on all fronts”
This includes Chairman Mark Connelly who brings over 30 years of experience in the resources sector, including positions with Newmont, Inmet and Endeavour Mining.
Exploration Manager Marc Twining has over 25 years of experience in resources development both within Australia and abroad, having worked with major gold producers Normandy and Newmont, along with acting as Senior Principal Geoscientist for the Geological Survey of South Australia
Further experience is provided by General Manager Projects Andrew Bales, a 22-year resources veteran as both a geologist and 10 years in management.
Government support places faith in technology-led strategy
Barton has also fostered strong support from the South Australian government, which has recently extended its Accelerated Discovery Initiative through until 2025 with a further $11.5 million commitment while highlighting Barton as a case study in local exploration success.
The program, which provides co-financing to accelerate the discovery of new mineral resource discoveries via the use of innovative technologies, has been an enthusiastic supporter of Barton with $300,000 provided last year to facilitate the trial of deep ground penetrating radar, gravity surveys, trial deployment of the CSIRO-developed Portable PPB technology and conceptual test drilling at Tarcoola. Impressive GPR results released during late September 2021 identified over 25 shallow new target structures within ~1.5km of the existing open pit, all within ~10m of surface.
“We are looking at an order of magnitude gain in cost and time to target delineation, acquiring these targets and their precise orientation for less than $200,000 over a 1-2 month period, versus $2-3 million of drilling over a 1-2 year period of time.”
Pushing ahead in the new year
2022 is expected to be busy for Barton, with exploration continuing at a rapid pace. Having completed ~10,300m of drilling in the 10 weeks post-IPO, and aiming for another 10,000 to 20,000m in the pipeline for the first half of the new year, Barton looks set to pursue significant growth in mineralisation in the near term. The company’s stated goal of prioritising new discoveries, new extensions and new mineral resources will form the central core to work at both Tarcoola and Tunkillia.
“We are focused on large-scale exploration and discovery, and therefore (hopefully) significant Mineral Resources. We are very well capitalised to pursue this strategy, so rather than doing things piecemeal and pursuing small incremental exploration programs and resource updates, we are pursuing large programs for more significant updates.”
“We expect to be in a position to release a comprehensive resources update sometime during the early second half of 2022.”
This article is a sponsored feature from Mining.com.au partner Barton Gold Holdings Limited. It is not financial advice. Talk to a registered financial expert before making investment decisions.