Euroz Hartleys, Cumulus Wealth lead Astral raise

Astral Resources (ASX:AAR) has locked in $7 million from both existing shareholders and new investors via a share placement to advance both its wholly owned Mandilla and Feysville gold projects in Western Australia. 

Euroz Hartleys and Cumulus Wealth were retained as joint lead managers to the placement. 

Astral, which has a $47.58 million market capitalisation, says the funds, together with existing cash reserves, will be used to fund diamond and reverse circulation (RC) drilling, assays, and testwork at both projects. 

The proceeds will also support Mineral Resource Estimate (MRE) updates for the projects, as well as exploration and evaluation support and overheads, the start of the Mandilla Prefeasibility Study (PFS), and general working and capital. 

Under the placement, eligible sophisticated, institutional, and professional investors will be issued a total of 140 million shares at $0.05 each. 

Directors of the company also subscribed for an additional 2.1 million shares at the same price. 

Further, 17 million unquoted options exercisable at $0.075 with an expiration date of 3 years from date of issue will be delivered to the joint lead managers.

Managing Director Marc Ducler says: “We are truly delighted with the strong support received from new and existing investors, particularly given the extremely challenging market environment for gold juniors. 

“The continuing exploration success at the exciting Kamperman prospect at Feysville gives us increasing confidence that Kamperman will become a valuable contributor of high-grade satellite ore feed to the Mandilla Gold Project development. 

“Assay results from a further 15 RC drill holes at Kamperman are expected to be received imminently. 

“With Mandilla firmly established as one of the best free-milling open pit resources in WA’s Goldfields Region and Feysville firming up as a genuine source of high-grade satellite ore-feed, our confidence in our strategy of building Western Australia’s next quality gold mining operation has never been greater.”

As of 31 December 2023, Astral Resources had $1.75 million in cash at hand, according to its latest quarterly report. 

Write to Adam Drought at Mining.com.au 

Images:

Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.

Astral building confidence in Mandilla’s potential

Astral Resources (ASX:AAR) is continuing to increase the potential of its Kamperman prospect becoming a ‘valuable’ contributor to its Mandilla Gold Project in Western Australia. 

Managing Director Marc Ducler says with assay results from a further 15 reverse circulation (RC) holes still pending, the company is confident that the best may yet be to come

“The potential for Kamperman to become a valuable contributor of high-grade satellite ore feed to the Mandilla Gold Project development continues to increase with every hole drilled.

Astral, which has a market capitalisation of $46.79 million, reports assay results have been returned from the first 4 RC holes, as part of a 19-hole for 2,459m drilling program. 

Ducler says these latest results have further reinforced the potential scale and grade of the Kamperman prospect. 

“Hole FRC267 was drilled to infill the 80m sectional spacing between previously reported intersections of 35m @ 2.19 grams per tonne gold and 5m @ 5.89g/t Au. 

To have returned the widest, highest grade intersection seen at Kamperman to date with such consistent gold mineralisation down the length of the reported mineralised zone, was especially pleasing.”

Hole FRC267 intersected 14m @ 0.98 grams per tonne gold from 25m and 35m @ 3.81g/t Au from 86m, including 1m @ 11.7g/t Au from 96m, 2m @ 12g/t Au from 105m and 1m @ 19.2g/t Au from 114m. 

The Kamperman prospect is part of the Feysville Gold Project that lies within the north-north-west trending Norseman-Wiluna Greenstone Belt in Western Australia. 

The Feysville Gold Project is located within the north-north-west trending Norseman-Wiluna Greenstone Belt, within the Kambalda Domain of the Archaean Yilgarn Craton. 

It hosts a Mineral Resource Estimate (MRE) of 3Mt at 1.3g/t Au for 116,000oz of contained gold at the Think Big deposit, providing a foundation to potentially become a source of satellite ore feed to a future operation based on the Company’s flagship Mandilla Gold Project. 

‘Significant’ gold and nickel mineralisation occurs throughout the belt, including world-class deposits such as the Golden Mile Super Pit in Kalgoorlie owned by Northern Star (ASX:NST) and the St Ives Gold Mine south of Kambalda owned by Gold Fields (NYSE:GFI). 

Locally, Feysville has been interpreted to contain upthrust ultramafics, emplaced within a sequence of volcanic sediments (the Black Flag sediment group), granitic intrusions, mafic basalts, gabbro and andesite.

On 8 February 2024, Astral began a 19-hole RC drill program at Kamperman where a mineralised strike length of 250m had previously been interpreted. The primary aim of the program was to link and further extend the known mineralised corridor at Kamperman, and to further investigate the potential for multiple mineralisation styles within the exciting new prospect. 

Some 2,459m were drilled. Nine RC holes of extensional drilling were completed to the north to extend mineralisation a further 100m from FRC243 (4m @ 94.8g/t Au from 77m) for a total strike length of about 350m. 

Astral Resources is a Perth-based gold and base metals explorer focused on exploring for gold in Western Australia. 

As of 31 December 2023, the company had $1.8 million cash at hand, according to its latest quarterly report. 

Write to Aaliyah Rogan at Mining.com.au   

Images: Astral Resources
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.

Astral validates Kamperman’s ‘high-grade’ potential

Astral Resources (ASX:AAR) has further confirmed the ‘high-grade’ potential of the Kamperman prospect, as part of the Feysville Project in Western Australia, after receiving assay results from a recent drill program. 

The $48.37 million market capitalisation company says at the Kamperman discovery, gold intercepts are routinely ‘high-grade’ with ‘significant’ gold occurrences of coarse gold observed in early drilling. 

According to Astral, previously identified targets combined with the existing mineral resources on the project the project has potential to contribute ‘significant’ future ‘high-grade’ ore sources to the greater Mandilla project, subject to ongoing development studies. 

During the March quarter, the company conducted a 3-hole for 217m reverse circulation (RC) drill program, with hole FRC263 returning 7m @ 5.81 grams per tonne gold from 19m, including 2m @ 12.3g/t Au from 19m. 

Managing Director Marc Ducler says upon completing an aircore drill program in January, the same rig was converted to an RC configuration to assist with the company’s interpretation and modelling of the recent ‘high-grade’ Kamperman discovery. 

“This 3-hole program yielded high-grade assay results in every hole, further reinforcing the exceptional high-grade potential at Kamperman.”

Upon completing the RC program, a follow-up RC infill and extensional drilling program was completed within Feysville. 

Drilling was aimed to link and further extend the known mineralised corridor at Kamperman, as well as further investigate the potential for multiple mineralisation styles within the prospect.

Ducler says: “A follow-up 2,459m RC program was immediately completed at Kamperman with assay results expected later this quarter as we continue to unlock the potential of this growing prospect which we have increasing confidence can contribute potential future high-grade satellite ore feed to our broader Mandilla Gold Project development.”

The Feysville Gold Project lies within the north-north-west trending Norseman-Wiluna Greenstone Belt in Western Australia, which hosts a Mineral Resource Estimate (MRE) of 3 million tonnes @ 1.3g/t Au for 116,000 ounces of contained gold at the Think Big deposit. 

Astral Resources is a Perth-based gold and base metals explorer focused on its assets in Western Australia. 

As of 31 December 2023, the company had $1.8 million cash at hand, according to its latest quarterly report. 

Write to Aaliyah Rogan at Mining.com.au   

Images: Astral Resources
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.

Astral projects further Feysville gold potential 

Astral Resources (ASX:AAR) continues “to progress well with the ambition of becoming one of Australia’s next high quality gold producers” after returning more ‘high-grade’ gold intercepts from its Kamperman prospect in Western Australia. 

Managing Director Marc Ducler says Kamperman, which is part of its Feysville Gold Project, continues to present as a ‘compelling, high-grade’ gold target that warrants further drilling, planned for mid-February 2024. 

The $53.13 million market capitalisation company says RC drilling will comprise 21 drillholes for 2,500m. Drilling is designed to focus on in-fill at Kamperman and extensions to the north of the current highest-grade intercept in hole FRC243 (4m @ 94.8 grams per tonne Au from 77m). 

Astral announced today (30 January 2024) it had posted additional ‘high-grade’ gold intercepts generated from 3-hole diamond drilling completed in December 2023 that demonstrate grades up to 12.2g/t Au from 67.8m including 1m @ 41g/t Au from 70.1m in hole FRCD262. 

Astral reports over the last year, 13 holes have been drilled at Kamperman with ‘highly significant’ results returned in 7 of those holes. 

Ducler says: “With additional growth potential confirmed at Mandilla from the diamond drilling results already released this year, these latest drill results at Kamperman also demonstrate the genuine high-grade opportunity that we have at Feysville, 2024 is off to a flying start! 

The 2,500m RC program expected to commence in mid-February will be crucial in determining the potential scale of what is emerging as an exciting high-grade opportunity at Kamperman. 

The recent Mandilla Scoping Study demonstrated the substantial economic potential of our flagship gold asset. With further exploration success at Mandilla since the study was completed and with the Kamperman prospect at Feysville now presenting as an additional potential high-grade ore source, Astral is progressing well with the ambition of becoming one of Australia’s next high-quality gold producers.” 

Astral Resources is a Perth-based gold and base metals explorer focused on its assets in Western Australia. 

As of 30 September 2023, the company had $4.1 million cash at hand, according to its latest quarterly report.

Write to Adam Drought at Mining.com.au

Images: Astral Resources
Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.

Gold sector consolidation not slowing down

We’re living, it seems, in the age of M&A warfare.

After buying up a 19.9% stake in OreCorp (ASX:ORR) in November last year, Perseus Mining (ASX:PRU) lobbed an all-out takeover bid in January 2024 to rival that of Vancouver-based Silvercorp (TSX:SVM).

Silvercorp’s offer, which OreCorp’s directors backed in August 2023, would convert each OreCorp share into 0.0967 Silvercorp shares and deliver $0.19 per share to OreCorp investors. Based on Silvercorp’s share price of US$2.31 earlier this week, OreCorp shareholders would receive the equivalent of $0.528 per share.

Perseus, meanwhile, has made an all-cash offer to buy the rest of OreCore’s shares at $0.55 each.

“Clearly a cash offer is superior,” Perseus CEO Jeff Quartermaine said in an interview with The Australian Financial Review.

“It is a very stark choice, do they want to take cash in hand and have certainty or do they want to roll the dice on a company that is less well known in this market and doesn’t have the credentials that we have for developing projects in Africa.”

Central to the bidding war is OreCorp’s Nyanzaga Gold Project in Tanzania, which hosts a probable ore reserve measuring 40.08 million tonnes at 2.02 grams per tonne (g/t) gold for 2.6 million contained ounces. According to a Definitive Feasibility Study completed in 2022, a 4-million-tonnes-per-year open pit and underground mining operation has been proposed, with a 10.7-year life and pay-back period of 3.7 years.

Perseus currently owns three gold mines in Africa — Edikan in Ghana, and Sissingué, and Yaouré in Côte d’Ivoire — but has been shopping around for potential add-ons after violence in Sudan forced it to put a pin in its Meyas Sand Gold Project.

However, in response to Perseus’s bid, OreCorp says the conditional proposal is not considered to be a superior one, and that “the board has not changed their existing unanimous recommendation in favour of the current offer by Silvercorp.”

It’s the second time in less than a year that directors of an ASX-listed gold target have thrown their support behind what appears to be a lesser offer. In H1 2023, St Barbara (ASX:SBM) shrugged off Silver Lake’s (ASX:SLR) bid for the Gwalia Gold Mine near Leonora in preference for what was considered a more reliable offer from Genesis Minerals (ASX:GMD).

Indeed, 2023 was a monster of a year for M&A. Newmont (ASX:NEM) acquired Newcrest Mining for $26.2 billion to create the world’s largest gold miner. BHP (ASX:BHP) forked out $9.5 billion to buy Oz Minerals. Livent and Allkem embarked on an $8.6 billion merger to create Arcadium Lithium (ASX:LTM), and Andrew “Twiggy” Forrest’s investment vehicle Wyloo spent $760 million to acquire Mincor Resources (ASX:MCR).

In its Australian Public M&A Report 2023, law firm Herbert Smith Freehills noted the continued strength from the belter year that was 2022, and that the activity slowdown at the end of FY22 and start of FY23 was short-lived.

“There were 56 deals announced in FY23 (compared to 65 in FY22 and 57 in FY21). Total deal value for FY23 was the second highest in the past 5 years, at an aggregate $75.6 billion (compared to $123.7 billion in FY22 and $44.4 billion in FY21),” the report said.

“The data shows that the press suggesting a soft public M&A market is not supported, with the number of deals in line with the 5-year average and the value being 41% greater than the average

“The data shows that the press suggesting a soft public M&A market is not supported, with the number of deals in line with the 5-year average and the value being 41% greater than the average.”

There is, of course, a heavy smattering of factors that inform any transaction. While they can vary from momentum-driving ESG concerns to the impact of inflation, or from regulatory involvement to shady equity tactics, some are purely geological.

In an interview with Reuters, Harmony Gold (JSE:HAR) CEO Peter Steenkamp said a certain amount of corporate consolidation, particularly within the gold sector, is unavoidable.

“I think it’s going to be inevitable that there will be some sort of consolidation, because exploration has been lacking for such a long time and for people to replace assets they will have to look at what their neighbours have and what the opportunities will be,” Steenkamp said in March last year.

It’s true that, in Australia particularly, the gold discoveries that had once established Down Under as a global hotspot are failing to materialise at the same scale. Major producers have been scratching their heads, looking for viable reserves to get their multi-million-ounce processing operations up to capacity, and decided in many cases that acquisitions are cheaper, easier, and much quicker than exploration.

“The rate of discoveries has dropped off despite the increase in absolute dollar terms in exploration,” Genesis Minerals CEO Raleigh Finlayson told The Australian Financial Review in August.

“The other thing is where those ounces have been discovered is obviously deeper from an underground sense of higher strip ratio from an open pit sense, and that makes it higher cost to convert into production.”

Exploration data from the Australian Bureau of Statistics shows that although exploration spending for the September 2023 quarter had risen 5.2% from the year before, the amount of drilling carried out had fallen 4.1% to 2,813.4km. Of that amount, 1,991.7km of drilling was carried out at existing deposits, while 821.7km was undertaken at new deposits.

While the September quarter was heralded by the Association of Mining and Exploration Companies as a record one, the apparent increase in drilling costs falls in line with concerns about how, exactly, depleting reserves can be replaced in a way that isn’t prohibitively expensive.

A headache for producers though it might be, it presents some key opportunities for juniors.

Astral Resources (ASX:AAR), which owns the Mandilla and Feysville gold projects and 100% of the gold rights at the Carnilya Hill Project — all of which sit within the prolific Goldfields district surrounding Kalgoorlie — is taking notice.

“If you look widely within the gold sector at the moment, there is a lot of discussion about the majors and even the mid-tiers struggling to replace ounces, so they do look to acquire them rather than explore for them,” Managing Director Marc Ducler told Mining.com.au in June last year.

“You’ve got Newmont taking over Newcrest. I think that’s just about scale, they just want to be the biggest and the best by a long way. Then you’ve got Westgold taking over — or trying to take over — Musgrave. You’ve had Ramelius take over Apollo and Breaker, and they’re all looking to buy those ounces.

“I think that also is an opportunity for us, because people that would potentially look to buy our ounces are buying them to feed into existing processing infrastructure, so they don’t have the capital costs associated with building something new. They can literally grab those ounces and start making money, which potentially presents us with a good opportunity to monetise it as well.”

Euroz Hartleys Managing Director Tim Bunney agrees, saying in an interview with The West Australian last month that miners “just can’t get the organic production out of their own asset base at the moment.”

“And as some of the small miners become capital constrained, I think equity values will become appealing to large companies with their balance sheets,” he added.

Whether or not Perseus’s tilt for OreCorp falls into the ounce-grab category is probably a matter of conjecture. The Perth-based company produced 128,773 ounces of gold from its Edikan, Sissingué and Yaouré mines in the December quarter, at an all-in sustaining cost (AISC) of US$1,023 per ounce.

For the 2023 calendar year, Perseus produced 528,486 ounces at an AISC of US$984 per ounce.

Perhaps it’s the reverse situation; that — having enjoyed a strong year of production and sales in 2023, and having witnessed the direction the global gold sector seems to be heading now — Perseus has acted preemptively.

In its 2023 Annual report, published at the end of August, the company made mention of its strategy to pursue both organic and inorganic growth strategies in Africa and elsewhere.

“We keep a watching brief across many projects and with approximately US$800 million in existing cash reserves and undrawn debt capacity at our disposal along with expectations of continued strong cash flows in the years ahead, we are well positioned to capitalise on any opportunities that, upon evaluation, demonstrate the potential to generate added value for our shareholders, in line with our corporate objective,” Perseus said.

In any case, consolidation in the resources sector — particularly gold — has shown no signs yet of letting up. If the trend continues as it has in the post-COVID hubris of the last couple of years, we can expect 2024 to be another big one for both dealmakers and investors.

Write to Oliver Gray at Mining.com.au 

Images: OreCorp & Perseus
Author Image
Written By Oliver Gray
Originally from Perth, Oliver has a keen interest long-form journalism. He has written for a number of publications and was most recently Contributing Editor of The Market Herald’s opinion section, Art of the Essay.

Astral flags increasing confidence in Mandilla

Astral Resources (ASX:AAR) says latest assays returned support a potential increase in resource confidence to the indicated category from the Mandilla Gold Project in Western Australia. 

Managing Director Marc Ducler says previously reported diamond drilling, completed during the December 2023 quarter, is likely to support the increase in confidence of the Theia deposit at depth.

The final 3 holes of the Theia diamond drilling program have returned wide, ‘high-grade’ intercepts, including 29m at 2.78g/t gold, supporting a potential increase in resource confidence to the indicated resources category.  

The $53.93 million market capitalisation company conducted an updated Mineral Resource Estimate (MRE) in July 2023, which resulted in 37 million tonnes  at 1.1 grams per tonne gold  for 1.27 million ounces of contained gold for Mandilla.

Ducler says: “With the latest DD hole, MDRCD830, returning 221 gram-metres over its length, this means that, over the 6-hole program, an average of 137 gram-metres of gold over the length of the hole was achieved — an outstanding result. 

The geology team has wasted no time in getting back to work this year with a 2,500m aircore program underway at Feysville and a 2,500m reverse circulation (RC) program scheduled to commence at Kamperman in mid-February.”

Meanwhile, a 2,500 metre AC exploration program testing regional extensions to known shears in the western portion of the tenement package at Feysville is currently underway. 

Following completion of the AC program, a 21-hole, 2,500m RC program at Kamperman is expected to commence in mid-February. Astral says this program is designed on an 090 azimuth, which is slightly oblique to the stratigraphy but interpreted to be perpendicular to the trend of gold mineralisation intercepted in previous drilling.

The Kamperman prospect drilling program is designed on an 090 azimuth, which is slightly oblique to the stratigraphy but interpreted to be perpendicular to the trend of gold mineralisation intercepted in previous drilling. 

The Mandilla Gold Project includes the Theia, Iris, Eos and Hestia deposits.

Gold mineralisation at Theia and Iris is comprised of structurally controlled quartz vein arrays and hydrothermal alteration close to the western margin of the Emu Rocks Granite and locally in contact with sediments of the Spargoville Group. 

Significant northwest to west-northwest-trending structures along the western flank of the project are interpreted from aeromagnetic data to cut through the granitic intrusion. Astral says these structures are considered important in localising gold mineralisation at Theia, which now has a mineralised footprint extending over a strike length of more than 1.6km. 

A second sub-parallel structure hosts gold mineralisation at the Iris deposit. The mineralised footprint at Iris extends over a strike length of approximately 600 metres, combining with Theia to form a mineralised zone extending over a strike length of more than 2.2km. 

At Eos, located further to the south-east, a relatively shallow ‘high-grade’ mineralised palaeochannel deposit has been identified by the company which extends over a length of about 600m. A primary gold source is also present with further drilling required to determine both the nature and structural controls on mineralisation and its extent. 

Mineralisation delineated over some 800m of strike at the Hestia deposit, located about 500m west of Theia, is associated with a shear zone adjacent to a mafic/sediment contact, interpreted to be part of the major north-south trending group of thrust faults known as the Spargoville Shear Corridor. 

Astral Resources is a Perth-based gold and base metals explorer focused on its assets in Western Australia. 

As of 30 September 2023, the company had $4.1 million cash at hand, according to its latest quarterly report.

Write to Aaliyah Rogan at Mining.com.au        

Images: Astral Resources
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.

Astral Resources making moves amid resignation

Astral Resources (ASX:AAR) has appointed ‘highly regarded’ Australian mining executive Mark Connelly as Non-Executive Chair. 

The $55.51 million market capitalisation company says Connelly brings a ‘strong’ track record in the gold industry, having undergone tenures at Oklo Resources and Chesser Resources. 

Oklo was subject to a $90 million takeover by B2Gold Corporation (TSE:BTO) which was completed in September 2022. Chesser was acquired in a $89 million takeover by Fortuna Silver Mines (TSE:FVI), which was completed in September 2023.  

As announced by Astral in December 2023, Connelly was appointed to the board as an independent Non-Executive Director and Chair-elect following departing Chair Leigh Warnick’s desire to step down as a director of the company. 

Warnick tendered his resignation as a director effective yesterday (15 January). 

Earlier in his career, Connelly was Managing Director and Chief Executive Officer (CEO) of Papillon Resources and was instrumental in a US$570 million takeover by B2Gold in October 2024. 

Prior to his time at Papillon, Connelly underwent a tenure at Endeavour Mining Corporation (TSE:EDV) as Chief Operating Officer (COO), following its merger with Adamus Resources he was Managing Director and CEO.  

Astral Resources is a Perth-based gold and base metals explorer with assets in Western Australia. The company’s Mandilla Gold Project sits in the northern Widgiemooltha greenstone belt in the western part of the Kalgoorlie geological domain. 

As of 30 September 2023, Astral Resources had $4.1 million cash and cash equivalents at hand, according to its latest quarterly report.

Write to Adam Drought at Mining.com.au

Images: Astral Resources
Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.

‘This thing can make some serious cash’: Astral Resources’ Marc Ducler on 2023 wins and 2024 plans

Astral Resources (ASX:AAR) Managing Director Marc Ducler revisits some of the company’s biggest wins over 2023, including an important resource update and a fresh scoping study for its Mandilla project near Kalgoorlie in Western Australia. Looking ahead, Ducler tells Mining.com.au that over 2024, the company will look to continue growing Mandilla and potentially increase its exploration efforts at the nearby Feysville project.

Astral eyes Theia’s further resource upside

Astral Resources (ASX:AAR) continues to demonstrate the presence of a ‘high-grade’ assay population within its Theia deposit, as part of the Mandilla Gold Project in Western Australia. 

A 6-hole 1,822.3m diamond drilling program was completed at Theia in November, with the first 3 assay results returning broad zones of ‘high-grade’ gold mineralisation, 

The $57.89 million market capitalisation company reports ‘exceptional’ intercepts from drillhole MDRCD828 includes 39m @ 5.43 grams per tonne (g/t) gold (Au) from 279m, including 1m @ 199g/t Au from 279.6m. 

Astral Resources Managing Director Marc Ducler says the company has continued to highlight the ‘significant’ growth potential of its Mandilla project. At the same time he says Astral continues to complement the July Mineral Resource Estimate (MRE) update and Scoping Study outcome in September.

“The July 2023 MRE update – which saw the Mandilla resource pass 1.27Moz – demonstrated our proven ability to deliver cost-effective resource growth while, importantly, also increasing in the higher confidence Indicated Mineral Resource category. 

This allowed the Astral team to complete the maiden Mandilla Gold Project Scoping Study, which outlined an 845,000oz production target, with 70% of the potential gold production sourced from the indicated category.

These latest diamond drill results further reinforce the significant upside potential of the project as we continue to enhance our understanding of the complexities of the Mandilla gold deposits.”

The upper interval of gold mineralisation from drillhole MDRCD828 supports the current MRE interpretation on this section. 

Astral says this is likely to support an increase in the resource confidence to the indicated category in this area at Theia.

Ducler says in addition to the advancements made at Mandilla, Astral’s Kamperman prospect within the Feysville project has increased and now represents a ‘significant high-grade’ target. 

“This has been followed up with a 3-hole diamond drill program for which assay results are expected in the New Year. Further testing of the high-grade potential at Feysville will commence by mid-January with both aircore and reverse circulation (RC) drilling.”

The Mandilla Gold Project sits in the northern Widgiemooltha greenstone belt in Western Australia. The project’s current MRE includes 37 million tonnes (Mt) @ 1.1g/t Au for 1.27 million ounces (Moz) of contained gold. 

Astral Resources is a Perth-based gold and base metals explorer with assets in Western Australia. 

As of 30 September 2023, the company had $4.1 million cash at hand, according to its latest quarterly report.

Write to Aaliyah Rogan at Mining.com.au    

Images: Astral Resources
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.

Astral eyes growth potential for Eos

Astral Resources (ASX:AAR) will launch a follow-up drilling program next year at its Eos deposit, which is part of its Mandilla Gold Project in Western Australia.

The $63.38 million market capitalisation company says further drilling is required to determine both the nature and structural controls on mineralisation and its extent following the receipt of ‘high-grade’ results.

The follow-up program will start once all assays from the latest drilling programs have been received. 

This news comes after an 11-hole reverse circulation (RC) and 37-hole aircore (AC) drilling program was undertaken at the Eos deposit. That program further demonstrated the potential for a shallow primary gold resource, as well as an expanding palaeochannel deposit sitting above the Archaean rocks. 

Some of the ‘best’ results recorded include hole MDRC852 with 4m @ 3.22 grams per tonne (g/t) Au from 38m and 6m @ 5.57g/t Au from 48m; and hole MDRC842 with 3m @ 2.81g/t Au from 57m and 19m @ 0.65g/t Au from 90m. 

The company reports the results from hole MDRC852 represent the ‘highest-grade’ intersection returned to date at Eos from primary mineralisation. 

Astral Resources Managing Director Marc Ducler says the recent drilling program has delivered on both fronts, with RC drilling highlighting the presence of primary gold mineralisation and extending the ‘high-grade’ central channel by a further 120m to over 600m in total strike. 

“A small program of diamond drilling is now required for Eos to gain a better insight into the nature and possible structural controls of the primary gold mineralisation in this area. This will occur in 2024 when our drill schedule best allows. 

A 3-hole diamond program following up on previous high-grade RC drilling has recently been completed at the Kamperman prospect. Preparations are now underway for a 2,500m RC program at the same prospect, likely to commence early in the March quarter 2023. 

Preparations are now underway for a 2,500m RC program at the same prospect, likely to commence early in the March quarter 2023

This will further evaluate the high-grade gold potential of the exciting Kamperman prospect.”

Astral Resources is a Perth-based gold and base metals explorer. The Mandilla Gold Project sits in the northern Widgiemooltha greenstone belt in the western part of the Kalgoorlie geological domain in Western Australia.

As of 30 September 2023, the company had $4.1 million cash at hand, according to its latest quarterly report.

Write to Aaliyah Rogan at Mining.com.au  

Images: Astral Resources
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.

Astral’s latest gold results confirm Mandilla upside

Astral Resources (ASX:AAR) has encountered additional ‘strong’ gold mineralisation from a reverse circulation (RC) drilling program at its Mandilla Gold Project in Western Australia. 

The $64.97 million market capitalisation company says drilling at the Theia deposit comprised 37 holes for 5,531m and returned grades of up to 35.35 grams per tonne (g/t) gold.

Astral reports ‘wide’ zones of gold mineralisation were intersected to the south of Theia, highlighted in hole MDRC816 with 32m @ 1.74g/t Au from 120m and 31m @ 0.93g/t Au from 185m. 

Other key results from this area include hole MDRC820 with 1m @ 35.35g/t Au from 115m; hole MDRC807 with 14m @ 1.19g/t Au from 42m; and hole MDRC813 with 1m @ 5.14g/t Au from 113m.

This comes in conjunction with gold mineralisation on the eastern flank of the deposit. 

Infill drilling completed on the eastern flank was designed to join 2 zones of ‘high-grade’ mineralisation previously delineated over 320m of strike and returned results of up to 50m @ 1.18g/t Au and 6m @ 2.61g/t Au across 2 RC holes. These holes extended mineralisation between the known zones.

Further, Astral notes that an 8-week, 6-hole diamond drilling program at Theia is now complete. The drill core is currently being processed, with assays expected later this quarter.

The diamond drill rig has now been relocated to the Feysville Project for a 3-hole follow-up drilling program targeting ‘high-grade’ mineralisation at the Kamperman prospect. 

Meanwhile, aircore (AC) drilling at the Eos deposit has also been completed, with results expected in the coming weeks. 

Astral Resources Managing Director Marc Ducler says these results follow on from July’s Scoping Study and add to this already ‘significant’ and potentially profitable project.     

“Following the release of the July 2023 MRE update and the September 2023 Mandilla Scoping Study, the exploration team has been busy with several drill programs across both Mandilla and Feysville. 

“These latest RC in-fill drill results further demonstrate our ability to continually grow the resource base at Theia”

These latest RC in-fill drill results further demonstrate our ability to continually grow the resource base at Theia — which is already a significant deposit in terms of its scale — and, as demonstrated by the Scoping Study, a very significant deposit in terms of its potential profitability.”

Astral Resources is a gold-focused explorer targeting the exploration, growth, and development of its flagship Mandilla project and its Feysville project. 

Mandilla is in the northern Widgiemooltha Greenstone Belt, about 70km south of the mining centre of Kalgoorlie, while Feysville is within the north-northwest-trending Norseman-Wiluna Greenstone Belt in the Archean Yilgarn Craton.

As of September 30, Astral Resources had $4.1 million cash and cash equivalents at hand after undertaking a $3 million placement in August. The company followed this up with a share purchase plan (SPP) to support both Mandilla and Feysville.

Write to Adam Drought at Mining.com.au

Images: Astral Resources
Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.

Astral recaps productive September quarter

Astral Resources (ASX:AAR) dedicated its September quarter to levelling up its Mandilla Gold Project in Western Australia. 

On 21 September this year, the $62.4 million market capitalisation company delivered a Scoping Study for the project, outlining a ‘large-scale, long-life’ mine open-pit development with ‘robust’ financials.

The key highlights of the study include a life-of-mine (LoM) payable metal production target of 845,000oz at an all-in sustaining cost (AISC) of about $1,648 per ounce, a projected average annual gold production target of about 100,000 tonne per annum (tpa), a net present value of $442 million, and free cashflow of $740 million. 

This is all over an 11-year mine life and a payback period of 9 months. 

The company notes the Scoping Study was based on an updated JORC 2012 Mineral Resource Estimate (MRE) of 37 million tonnes (Mt) @ 1.1 grams per tonne (g/t) for 1.27 million ounces (Moz) of contained gold, as reported in July 2023.

Astral completed about 10,440m of drilling during the September quarter at Mandilla to further grow and upgrade the project’s resource. Drilling comprised up to 7,209m of reverse circulation (RC) drilling at both the Theia and Eos deposits, 740m of diamond drilling at Theia, and 2,491m of aircore (AC) drilling at Eos. 

Meanwhile, at its Feysvilla Gold Project, Astral undertook 3,202m of RC drilling across the Kamperman, Ethereal, and Hyperno prospects, which uncovered ‘breakthrough and exceptionally high-grade’ gold intercepts, as announced in September. 

Key assays returned from this round of drilling included hole FRC243 with 4m @ 94.84g/t gold from 77m, including 2m @ 187.7g/t gold from 77m, and 5m @ 8.29g/t gold from 53m, including 1m @ 38.72g/t gold from 59m; and hole FRC241 with 21m @ 4.16g/t gold from 31m, including 2m @ 12.73g/t gold from 47m.

Astral closed the books on the September quarter with $4.1 million cash at hand after undertaking a $3 million placement in August. The company followed this up with a share purchase plan (SPP) to support both Mandilla and Feysville.

Astral concluded the SPP in September and pocketed $1.6 million of its desired $2 million.

Astral Resources is a gold-focused explorer targeting the exploration, growth, and development of its flagship Mandilla Project and its Feysville Project.

Mandilla is in the northern Widgiemooltha greenstone belt, about 70km south of the mining centre of Kalgoorlie, while Feysville is within the north-northwest trending Norseman-Wiluna Greenstone Belt in the Archean Yilgarn Craton.

Write to Adam Drought at Mining.com.au
Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.

Gold: no longer sexy but always in vogue

The investment rationale for gold can be succinctly summarised as an unparalleled risk diversifier and a safe-haven asset.

Yet despite the Aussie gold price breaching $3,000 this year and currently sitting at about $3,160 an ounce, gold mining stocks are undervalued on a relative and absolute basis. 

The sentiment from Diggers & Dealers this year has been the clearest indication that the precious metal has lost its lustre in favour of other metals that are battery and critical in nature. That is, lithium, for the most part.

As Great Boulder Resources (ASX:GBR) Managing Director Andrew Paterson puts it: “Gold just isn’t sexy at the moment so it’s very difficult to hold investors’ interest.”

“Gold just isn’t sexy at the moment so it’s very difficult to hold investors’ interest

Sprott Asset Management shares a similar sentiment. Sprott notes that gold explorers and developers are trading at extreme discounts to their producing counterparts. In fact, following the August 2011 peak, gold mining equities have significantly underperformed the metal’s price.

Mine Life Founding Director and Senior Resource Analyst Gavin Wendt explains it as: “Investors being confronted with a cocktail of uncertainty during 2023.”

Wendt says the investors have been spooked by concerns regarding interest rates, Chinese economic health, global economic growth, and fears of recession.

In a September 2023 report, the World Gold Council notes that amid economic uncertainty Australian investors have, so far this year, been reallocating to fixed income assets. 

The World Gold Council says that although currently attractive, persistent inflationary pressure can bring risks to both the growth outlook and return for these assets. The council says gold should be considered as a long-term strategic asset alongside bonds as it provides excellent returns in a wide range of economic scenarios.

Following a strong 2022 in which it gained 7%, gold in Aussie dollars capped another gain of over 12% during the first 8 months of this year – once again outrunning other major assets. 

Lust or love?

However, despite this strong performance Paterson tells Mining.com.au gold is no longer on investors’ radars. Comparatively, there is a variable amount of ‘froth and excitement’ for lithium discoveries. 

“It’s a frustrating situation but all the exploration companies are in the same boat. Having said that, we have a great project so we’re not about to jump onto the lithium bandwagon for short term gain.”

Great Boulder is looking to undertake another Aboriginal heritage survey within the Ironbark Corridor on the back of recent drilling results from its Side Well Gold Project in Western Australia. 

“It’s a frustrating situation but all the exploration companies are in the same boat. Having said that, we have a great project so we’re not about to jump onto the lithium bandwagon for short term gain

The $34 million market capitalisation company received the results as part of a phase five resource expansion and definition program at both Mulga Bill and Mulga Bill North, respectively. 

Mulga Bill North displays potential as a ‘significant’ northern extension to the existing Mulga Bill resource, with mineralisation now defined over 700m of strike and remaining open in all directions. 

Flynn Gold (ASX:FG1) Chief Executive Officer (CEO) Neil Marston echoes the sentiments of Paterson. He explains to Mining.com.au that investors have seemingly exited the gold sector, which is highlighted by the lack of liquidity in the explorer space.

“Whenever you put out some results, there becomes a bit of a liquidity event for people to trade, which is obviously frustrating for companies such as ourselves, which are producing some good results.”

In its quarterly report released yesterday (25 October 2023), Flynn notes that despite the wider issues facing the sector, it remains in a strong position with $2.527 million cash at hand as of 30 September.

On 10 October, the $8.86 million market capitalisation company reported ‘high-grade’ gold mineralisation intersected at its Golden Ridge Project, recording 1.1m @ 51.3g/t Au from 353.2m, including 0.4m @ 137.8g/t Au from 353.9m. 

Subsequent to this announcement, Flynn’s share price saw a spike, increasing from $0.055 to $0.068. Although there was a sudden climb, during mid-January 2023 Flynn’s share price was trading at $0.105 —— nearly double than what it is trading at now. 

Marston says this rollercoaster ride is indicative of the market and what most gold juniors are encountering.

“I think investors are probably not as patient as they might have been a few years ago.”

Mt Malcolm Mines (ASX:M2M) Managing Director Trevor Dixon agrees, adding that small cap companies are on a downward trend. He says valuations often do not reflect the movements of the gold price, which in May this year topped $3,073 and is today about $3,160.

“Mt Malcolm is undervalued currently. Simply because the gold price hasn’t changed, yet our market cap and share price have dropped significantly over the past 12 months.”

As Dixon notes, Mt Malcolm’s share price was trading at about $0.20 in October 2021 and today is trading at $0.022.

Great Boulder and Flynn Gold have endured a similar slide. In March 2023, Great Boulder’s share price was trading around $0.10, however, it has slipped to $0.065 despite having some wins and releasing regular positive updates to the market.

While gold has actually fluctuated from a low of $2,676 on 16 February to breach $3,100 there have not been wild swings per se – although it did dip sharply from 1 June.

According to the World Gold Council, the gold price weakened during June this year, which was predominantly due to the rise in US Treasury yields, a fall in volatility, the strength of the US dollar, alongside ensuring outflows from global gold ETFs.

The council notes price momentum and gold ETF outflows pressured the gold price, particularly in the past 2 months of the second quarter of 2023. 

Mine Life’s Wendt explains that during the first half of 2023 there was hope that inflation would soften. 

“Comments from the Fed poured cold water on these hopes, which means that gold has suffered.”

Golden rule

Despite these conditions and the lack of investors’ attention, the gold price has doubled in the past 10 years – now sitting at about $3,160 AUD, as reported in the Perth Mint’s live gold price. 

Wendt says the driving force behind the gold price rising is the “skyrocketing growth of debt worldwide, especially in the post-covid and post-GFC environments”.

However, as Riedel Resources (ASX:RIE) CEO David Groombridge explains, the strength of the gold price is not translating into higher valuations for small cap explorers.

“From my perspective in the junior space, that rise has not affected anything. It’s been a bloodbath for juniors in the exploration or developing space.

It’s been a bloodbath for juniors in the exploration or developing space

It’s made no difference at all, because you look at all the shares from all the juniors and they’ve been smashed this year and getting access to equity has been really hard.”

As previously mentioned, gold gained 12% during the first 8 months of 2023 on the back of a stellar 2022, once again outrunning other major assets. 

Could it be that gold is still attractive — but it’s explorers that have lost their appeal? 

Speaking to Mining.com.au, The Perth Mint Manager Depository John O’Donoghue reaffirms that gold has been a ‘top performing’ asset during 2023. 

O’Donoghue says this is highlighted by the ‘positive’ returns to investor portfolios, alongside supporting dampening volatility in times of uncertainty, such as the US banking crisis in March this year — where 3 small- to mid-size US banks triggered a decline in the global bank stock prices. 

“I can say that there is evidence that central bank gold buying remains strong and near record levels, and this supports a higher gold price. 

However, a key determining factor of future gold prices will be the direction taken by the US Federal Reserve and whether they cut interest rates or whether they remain higher for longer in their quest to get inflation in line with target.”

As Great Boulder’s Paterson notes, there’s a plethora of macro issues at play boosting the gold price, however it’s a double edge sword. 

Some of these same market influences are making it harder to access capital to advance early stage assets.

In the Gold Price Forecast for 2024: What Experts and Analysts Say, UK Silver and Gold Dealer, Physical Gold CEO Daniel Fisher notes the financial world experienced severe monetary policy tightening in 2023. This was to help control runaway inflation. 

O’Donoghue says a key component in future gold prices will be the direction taken by the US Federal Reserve on interest rates. 

“Continued higher interest rates would support a stronger US dollar, which should curtail gold’s short to medium term performance. Conversely, periods of economic uncertainty, such as the US banking crisis in March 2023, support demand for gold.”

Paterson agrees: “Currently the economy (national and global) is in poor shape and access to funding is difficult, so having a good project is a key attribute for any successful junior.”

The future of gold investing is largely affected by what is going on in the world at the time. In times of turmoil, such as today with the wars in Gaza and Ukraine, investors typically turn to one safe-haven asset — gold. 

O’Donoghue says the world saw this in 2016, while the US-China trade war took place, alongside other geopolitical issues and more central bank demand, and as a result demand surged. 

“This culminated in a record high of USD $2,075 during the COVID-19 pandemic in August 2020 as recession fears and monetary and fiscal stimulus boosted prices.”

A model metal

While gold may not be as sexy as other commodities right now as the world transitions towards decarbonisation, the precious metal’s shine is likely to return sooner rather than later.

Astral Resources (ASX:AAR) Managing Director Marc Ducler describes himself as a perennial gold bull and sees the market as ‘solid’ going into 2024. He tells this news service that moving into next year, the market is likely to only get stronger.

“I am extremely bullish on gold and when we’re doing our next levels of study, we’ll probably have enough runway with the gold price to demonstrate that we can run a high price scenario again.

The gold price is, in my view, certainly going to continue to strengthen from here.”

The gold price is, in my view, certainly going to continue to strengthen from here

Astral is targeting exploration, growth, and development of its flagship Mandilla project, located 70km south of Kalgoorlie in Western Australia. Mandilla hosts a Mineral Resource Estimate (MRE) of 37Mt at 1.1g/t Au for 1.27Moz of contained gold.

A five-stage open pit design has been based on a $2,100 an ounce gold price with all-in sustaining costs (AISC) over the full life-of-mine (LoM) to average about $1,648/oz. Ducler says the three-stage crush, single-stage grind option provides the lowest capital and operating cost across Mandilla’s life-of-mine.

Mandilla is forecasted to generate an unleveraged and pre-tax IRR of 73% and an unleveraged and pre-tax NPV of about $442 million (NPV8%).

Pacgold (ASX:PGO) Managing Director Tony Schreck tends to agree with Ducler and remains optimistic regarding junior gold explorers heading into the new year. Schreck explains the investment return for small companies with ‘quality’ assets will improve.

“The gold majors and mid-tiers have progressively cut back exploration over the past 10-plus years and I see there will be greater interest from these companies viewing undervalued gold juniors with strong assets as a means of growth through M&A.”

Flynn Gold’s Marston also has high hopes as he sees companies putting in the work being rewarded for their results. 

“I think the longer that the gold price stays up at these prices, or starts to trend up further, you’ll see people taking profits out of the other sectors they’re investing in around lithium, rare earths, and uranium – which is having a run at the moment.

I think people will start coming back to add gold stocks to their portfolio, I think gold is not dead, so to speak.”

Whether gold is perceived to be sexy or not one thing appears clear – regardless of what commodity is catching the collective eye of investors, the precious metal will always be in vogue.

Write to Aaliyah Rogan at Mining.com.au 

Images: Great Boulder, Flynn Gold, Mt Malcom
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.

Astral Resources: the making of Mandilla

This article is a sponsored feature from Mining.com.au partner Astral Resources Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.

“Perfection is not attainable, but if we chase perfection, we can catch excellence.”

This quote from Vince Lombardi, who is considered by many to be the greatest coach in American football history, is an apt description of the Scoping Study Astral Resources (ASX:AAR) has completed for its flagship Mandilla Gold Project.

The gold-focused company is targeting exploration, growth, and development of its flagship Mandilla project, located 70km south of Kalgoorlie in Western Australia. Mandilla hosts a Mineral Resource Estimate (MRE) of 37Mt at 1.1g/t Au for 1.27Moz of contained gold.

In this region, there’s about 30 million tonnes per annum of processing capacity and another 15 million tonnes per annum of capacity coming online.

Imagine Mandilla and then head out 100km in every direction and it will add up to that capacity. It’s a very mature exploration area and large profitable open pit deposits that are mineable from surface are becoming exceedingly rare.

As the Scoping Study illustrates, Astral is on track to help fill some of that 15Mtpa of capacity due to come online in the region.

Moves to making Mandilla

Managing Director Marc Ducler explains to Mining.com.au that the study is the culmination of 3.5 years of effort and is based on conservative assumptions for gold price revenue, as well as costs.

The company has considered various development options but ultimately determined a 2.5 million tonne per annum Carbon in Leach (CIL) processing plant and associated infrastructure is the optimum strategy. While some of the larger players in the area would potentially seek to secure more mill feed, at this stage, Astral is content on building its own processing plant.

A five-stage open pit design has been based on a $2,100 an ounce gold price with all-in sustaining costs (AISC) over the full life-of-mine (LoM) to average about $1,648/oz. Ducler says the three-stage crush, single-stage grind option provides the lowest capital and operating cost across Mandilla’s life-of-mine.

Mandilla is forecasted to generate an unleveraged and pre-tax IRR of 73% and an unleveraged and pre-tax NPV of about $442 million (NPV8%).

Ducler tells this news service the Scoping Study has the potential to generate a serious re-rating of Astral’s share price. Additionally, it still has significant exploration potential including at the 1Moz Theia deposit, while Feysville is generating ‘exciting’ intersections including the recently announced 4m @ 94.84g/t and 5m @ 8.39g/t at the Kamperman prospect.

“We’ve put out 5 Mineral Resource Estimates, and pretty much from the first one, every time we did it, we would have a look at what it would look like at a Scoping Study level

“We’ve put out 5 Mineral Resource Estimates, and pretty much from the first one, every time we did it, we would have a look at what it would look like at a Scoping Study level. This is why we’re always keen on continuing to grow the resource because you need a fair amount of runway to give yourself a decent, robust project. Which is the point we believe we have now arrived at.

The feedback I’ve received from our biggest shareholders has been absolutely positive. And I’d like to think that this is going to be the starting point for us. As the market digests this Scoping Study and decides where we should fit in the developer peer group, that it should see us continuing to move up.”

In a 21 September analyst report – the date the Scoping Study was released – analysts at Rawson Lewis noted the study was of such sufficient high quality it could be considered as a Prefeasibility Study (PFS).

The difference between a Scoping Study/PFS and Definitive Feasibility Study (DFS) is the accuracy of the cost estimates.

The MD agrees with Rawson Lewis – this study is robust and, for the most part, is at a feasibility study level. The mine design and scheduling would certainly meet the requirements for this level of study. It also has a fully detailed design and is scheduled all the way through to the end of life of mine.

“There are a number of things that we’ve done to a definitive level of study and they are the important things. You need to get your pit wall angles right. You need to have a design that you can execute and a schedule that makes sense. So, I would argue that the work we’ve done in the Scoping Study should absolutely be sufficient to drive a re-rate in the share price.”

Of note, while Astral is using a conservative gold price, the precious metal has spent less than 30 days under $2,900 in the previous 180 days prior to the 21 September release of the study.

The MD adds: “I am extremely bullish on gold and when we’re progressing our next levels of study, we’ll probably have enough runway with the gold price to demonstrate that we can run a higher price scenario again. The gold price is, in my view, certainly going to continue to strengthen from here.”

Other gold companies such as Black Cat Syndicate (ASX:BC8) and Bright Star (ASX:BTR) have used the higher $2,900 gold price assumption in their studies.

Meanwhile, Ducler is confident of raising the required $191 million in pre-production capital expenditure when the time comes. For one, Mandilla has strong technical and economic fundamentals, which will deliver an attractive return on capital investment – it will generate free cash flow of some $740 million over the 11-year life of the mine and a payback period of less than a year.

Astral also has a strong track record of raising equity.

Ready for a re-rating

In the Rawson Lewis analyst report, the firm states the Mandilla Scoping Study demonstrates Astral should be trading at $0.24 based on a standalone project NPV discounted at 15% per annum allowing for project funding dilution from raising $120 million in equity at $0.15 per share.

This $0.15 share price seems reasonable considering there’s no large equity raise coming for Astral until 2025. Interestingly, the company is currently trading at $0.085.

The MD says Astral went into the study with “reasonable views the whole way along”, taking a conservative approach to price and cost assumptions.

“What we wanted to do is be able to pitch ourselves in a reasonable spot from a mining and processing cost perspective.”

Mandilla’s AISC average of about $1,648/oz over the full life-of-mine is competitive. Comparatively, fellow gold miner Capricorn Metals’ (ASX:CMM) Mount Gibson project’s AISC is $1,420/oz for the first 7.5 years of its operation.

The MD notes: “You want to have your unit cost about where these other players are forecasting their costs to be, because otherwise, analysts will discount the quality of the technical work. And so, we’re comfortable that the work we’ve done shows that our unit costs are in the ballpark of where they need to be. And given that it’s in the right ballpark and we have a project as robust as this certainly works in our favour.”

The Mt Gibson Gold Project was acquired in July 2021 at a time when Capricorn’s share price was trading at about $1.75. It is currently trading at about $4.095. Essentially, Capricorn has grown from a gold company about the same size as Astral to the $1.5 billion market capitalisation company it is today – off the acquisition of one asset.

In terms of magnitude, while Mandilla is about 70% of Mt Gibson’s size, as the Scoping Study shows, Astral’s prized asset is poised to generate some serious free cash flow.

Ducler adds: “You get judged on your free cash flow generation, and you get marked for that. Delivery on that metric tends to give you the market capitalisation to then look at how you grow your business with the right value accretive transactions.”

Focus on funding

He says the $191 million pre-production capex will likely be funded via a mixture of debt and equity, which will be raised prior to construction starting.

“We will do a debt carrying capacity analysis because you want to get a sense as to what is the capacity of this project to carry debt and that’s because we want to deliver an outcome that’s robust and beneficial for shareholders. We want to be able to carry a strong amount of debt, and obviously minimise dilution.”

The debt carrying analysis will potentially be carried out in the next couple of months, well before the PFS. At some stage, Astral will seek to appoint a debt advisor to facilitate the process.

We want to be able to carry a strong amount of debt, and obviously minimise dilution

While a 70% debt and 30% equity split is preferred, the MD notes in the current market this is an exception rather than the norm so Astral is guiding towards a 60:40 split.

“The thing is, you put out a study and everyone is talking about the equity component. This is a Scoping Study, so it’s very preliminary. What it does is it tells the market that this is a solid project that produces fantastic free cash-flow, it can pay back its debt inside a 9-month period.”

He is confident of raising the required capital for a number of reasons. One, the study confirms the potential for Mandilla to become a highly profitable standalone gold operation. Also, Mandilla has strong technical and economic fundamentals, which will deliver an attractive return on capital investment. And generating free cash flow of some $740 million over the 11-year life of the mine and a payback period of less than a year is impressive for a junior currently valued at $60 million.

Again, Astral also has a strong track record of raising equity.

Down the track this also presents Astral with plenty of growth opportunities.

“We’ll be making $40 million per annum in free cash flow. We process high-grade ore for 7.4 years before starting on the stockpiled lower grade material. But we would certainly want to have grown our high-grade resources by the time we got to that stage and that would be from additional exploration at Mandilla, exploration at Feysville. And we’d be looking in our immediate neighbourhood for the sort of tenure that we believe would have the capacity to generate deposits of similar scale that we could feed into our large Mandilla process plant.

We’ve identified some projects that we would be keen to try to get our hands on if we could that are in our region. Once you tie those opportunities up then you can look further afield, but that is a fair way off into our future.

Ducler concedes the robust Scoping Study and attractiveness of Mandilla as a standalone project will likely put Mandilla on the radar of many suitors.

“At the end of the day, the market is a voting machine and if someone wants to buy this project, well, then they just have to put that offer into the voting machine and then the outcome will be determined by the shareholders. And I’m more than comfortable with that process. That’s one of the great things about running a publicly listed company – it’s a democratic process, and shareholders can vote with their holdings.”

Mandilla is situated in the northern Widgiemooltha greenstone belt, 70km south of Kalgoorlie and is firmly established as one of the best free-milling, open pit resources in this renowned district in both scale and quality.

The study estimates an average gold production target of about 100,000oz per annum at an average feed grade of 1.3g/t Au over the first 7.4-year period, reducing to a projected average production target of some 41,000oz per annum at an average feed grade of 0.50g/t Au when treating lower grade stockpiles over the remaining 3.4-year period.

Exploration and evaluation activities are continuing at both the Mandilla and Feysville Gold projects. Exploration at Mandilla will include both in-fill drilling to convert inferred resources to indicated resources, together with ongoing exploration drilling targeting further resource growth.

Feysville is located 14km south of the KCGM Super Pit in Kalgoorlie and hosts a MRE of 3Mt @ 1.3g/t Au for 116,000oz of contained gold. Astral also holds other tenement interests at its Carnilya Hill project in the Western Australian Goldfields.

Write to Adam Orlando at Mining.com.au

Images: Astral Resources
Author Image
Written By Adam Orlando
Mining.com.au Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.

Astral Scoping Study outlines Mandilla potential

Astral Resources (ASX:AAR) Managing Director Marc Ducler discusses the Scoping Study for the company’s Mandilla Gold Project in Western Australia, which he says demonstrates that the project is ‘financially viable’.

Author Image
Written By Carolyn Rebeiro
Joining Mining.com.au from the West Coast, finance presenter Carolyn began her journalism degree in Townsville and developed a passion for mining news after a FIFO stint in WA's Goldfields.

Astral posts ‘positive’ Mandilla Scoping Study

Astral Resources (ASX:AAR) has reported ‘positive’ results from a Scoping Study for its Mandilla Gold Project, highlighting the ‘strong’ potential to develop a standalone, long-life operation. 

The $56.08 million market capitalisation company says the Scoping Study provides justification that Mandilla is commercially viable, and its board is supporting the progression of the project to a Preliminary Feasibility Study, subject to ongoing funding. 

The company notes the timing of project development is yet to be determined due to the preliminary nature of the studies completed to date. 

Astral also reports the Scoping Study determined that a 2.5-million-tonne-per-annum (Mtpa) Carbon-in-Leach (CIL) processing plant and associated infrastructure would be the ‘optimum’ commercialisation strategy for Mandilla.

As far as costs go, Astral has reported a life-of-mine (LOM) payable metal production target of 845,000 ounces at an all-in-sustaining cost of $1,648 per ounce. 

Meanwhile, exploration and evaluation activities are still ongoing at Astral’s Mandilla and Feysville Gold projects. Activities at Mandilla will include both in-fill drilling to convert inferred resources to indicated resources and exploration drilling targeting further resource growth. 

Commenting on the Scoping Study results, Astral Resources Managing Director Marc Ducler says: “We are pleased that the Mandilla Scoping Study has confirmed the potential for Mandilla to become a highly profitable standalone gold operation. 

The study outlines compelling financial metrics for a Mandilla development, with projected free cash-flows of approximately $740 million over a life-of-mine of 11 years and a payback period of less than a year for total pre-production capital expenditure of approximately $191 million. 

the Mandilla Scoping Study has confirmed the potential for Mandilla to become a highly profitable standalone gold operation”

The study financials have been modelled using a gold price assumption of $2,750 per ounce, which is lower than the spot price has been for the past 6 months, and using a 5-stage open pit design based on a $2,100-per-ounce pit optimisation. This further highlights the potential upside for a Mandilla development. 

Astral continues to advance exploration and resource definition efforts at Mandilla, as well as at the company’s nearby Feysville Gold Project, while simultaneously progressing Prefeasibility studies as it seeks to deliver on its strategy of building another quality Western Australian mining operation.”

The Mandilla Gold Project is one of the ‘largest’ undeveloped free-milling open-pit gold development projects in the Kalgoorlie region. 

Astral Resources is a gold-focused explorer targeting the exploration, growth, and development of its flagship Mandilla project. 

As of 30 June 2023, the company had $1.3 million cash at hand, according to its latest quarterly report. Astral launched a $3 million share placement in late July and then raised $1.6 million through a share purchase plan completed on 15 September 2023

Write to Aaliyah Rogan at Mining.com.au  

Images: Astral Resources
Author Image
Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.