This article is a sponsored feature from Mining.com.au partner Prodigy Gold Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Such is the course and vicissitude of mining exploration that hurdles are oftentimes too cumbersome to overcome.
Pure-exploration plays in new unexplored areas is exciting, however more are likely to fail than juniors in regions with geology similar to those of nearby producing mines.
Fortuitously, Prodigy Gold (ASX:PRX), has a contemporary and de-risked greenfields and brownfields portfolio in the Tanami Gold Province in northern Australia, with mining majors as its neighbours.
The precinct is regarded as one of Australia’s most productive gold producing areas and over its 125 storied years of history the Tanami Gold Province has proven to be a well-endowed multi-million-ounce region. This region is home to one of Australia’s most successful gold mines – Newmont’s (NYSE:NEM) Callie operation – with Prodigy’s tenements located around the mining area. Australian majors such as Northern Star (ASX:NST) and IGO (ASX:IGO) are also exploring there.
Speaking to Managing Director Mark Edwards about the plans afoot for Prodigy Gold, there was something clear and passionate in his alacrity.
He explains that as part of its exploration strategy, the focus for Prodigy Gold over the coming year will be placed on the Northern Tanami and Lake Mackay projects. With the drilling at Phreaker completed towards the end of 2022, the company will focus its efforts on the Northern Tanami region initially in 2023. Three programs are planned to commence at the end of the wet season when site access can be assured.
Three-pronged exploration focus
“We are etching to get back in there and start drilling and we’re ready as soon as things open up around April, in terms of the wet season, with the idea to finish that drilling campaign around June this year.
In the first half of 2023, we’ll be focusing on several different deposits in that area so we’re wholly focused on that central core project area in the next 6 months. And then once we’re in we’ll be consistently busy.”
“We are etching to get back in there and start drilling and we’re ready as soon as things open up around April”
The company will deploy a reverse circulation (RC) drill rig for what is expected to be a 7,500m drill program.
“Our objective will be to drill around known resources, advanced projects, as well as greenfields targets. So, it’s a combination of all those specs of exploration at one area. Then we’ll have idea by the end of June on how things are looking. We are currently proposing that early in the next financial year, so post June 2023, we’ll head off to Lake Mackay and we’ll come back to Northern Tanami once we’ve had a chance to process all the results.”
The MD notes that Prodigy Gold is conducting a detailed review of all drilling campaigns planned to ensure it is targeting the highest priority prospects. These programs are part of Prodigy Gold’s strategy of committing to advancing projects in the Tanami Region with a keen focus on the mineralised trend between the Central Tanami Project Joint Venture (NST:TAM) “CTPJV” Groundrush and Crusade gold deposits, that also hosts its Hyperion Mineral Resource. The potential gold endowment for this trend is significant, highlighted by the Groundrush deposit, which is identified as a single million-ounce deposit with over 600,000 ounces produced between 2001 and 2004 and over 1.1 million ounces remaining in resources, taking the total endowment for this deposit to over 1.7 million ounces.”
While Prodigy will embark on exploration in earnest, the RC drilling results could take some time to be returned from the laboratories. Edwards notes that when they are received the company will ‘go back and continue that drill program with gusto’.
He says that Prodigy Gold is well-capitalised to have such gusto to undertake an expansive drill program following the completion of a capital raise in October last year.
“We’re well funded which I guess means with success, we can quickly advance projects to best understand their potential”, the MD said.
“If we discover something amazing, obviously we’ll keep focusing on investigating that further so while we’ll always be prudent and strategic with how we deploy our capital, on the same token it would be remiss of us to not utilise that cash to its full potential.
So, you never want to set time limits with when you’ll spend it depends on many factors, but we are also very mindful that we need to conduct our exploration with the best interests of our stakeholders and shareholders in mind.”
War chest for works program
As of 31 December 2022, Prodigy Gold held $8.1 million in available cash and had no debt.
In a sign of support for its strategy, major shareholder APAC Resources Capital, which currently has a 49.9% stake in Prodigy, committed to sub-underwrite the capital raise to the tune of about $9.71 million (including its entitlement). Following the capital raising, Prodigy restarted diamond drilling within the Lake Mackay Project in November in order to follow up on the previous drilling campaign conducted at the Phreaker prospect.
The fundraising also enabled the company to make a $2.5 million repayment of its existing unsecured loan facility agreement with Mount Sun Investments, resulting in Prodigy being completely debt free.
Edwards notes that with access to a small war chest, Prodigy Gold’s team is laser-focused on the Northern Tanami project, including the Hyperion mineral resource, the advanced Tregony gold deposit, as well as the Boco North greenfields prospect, which will be co-funded under the Resourcing the Territory program with the NT Government.
These Northern Tanami programs will increase the company’s understanding of the gold deportment between the Central Tanami Project Joint Venture (CTPJV – Tanami Gold/Northern Star Resources) Groundrush gold deposit in the south and the Crusade gold deposit in the north.
“Prodigy Gold holds defined resources, such as Hyperion and Buccaneer, which could be expanded plus several defined prospects that require follow up work such as Tregony and Boco. But we’re a junior exploration company, so we must ensure that we invest in the projects most likely to return positive results, which means we rank projects and drill those which will provide success to our stakeholders and divest or surrender lower ranked projects.
“we’re a junior exploration company, so we must ensure that we invest in the projects most likely to return positive results”
Those ranked in a lower position are unlikely to be explored by us, so the decision has to be made to either drop, sell, or find other ways, such as joint ventures, to get other explorers involved otherwise we hold this ground at a cost. For example, the sale process we are currently going through of the Old Pirate project to Stockton Mining.”
In December, it was agreed the end date to the transaction would be extended from 31 December 2022 to 30 June 2023. The parties must also negotiate in good faith to further extend the end date if the conditions precedent is well progressed and likely to be satisfied shortly after the new date.
‘Phreaking’ formidable 2022
Also during Q4 2022, Prodigy Gold mobilised a diamond drill rig to the Phreaker prospect to complete an additional diamond hole as part of the sole funding requirements of the restructured joint ventures with IGO (ASX:IGO). This drilling program was completed prior to the end of the field season with assay results expected shortly.
Edwards says the company will undertake further drilling around the Northern Tanami before moving back to focus on Lake MacKay.
With such a unique greenfields and brownfields exploration portfolio in the proven multi-million-ounce Tanami Gold Province, Prodigy remains highly active in its systematic exploration approach. Whether it be prioritising drilling targets on its Tanami Projects and Lake Mackay; a Scoping Study on the Buccaneer Resource; systematic evaluation of high potential early stage targets; or, joint ventures to expedite discovery on other targets, the company is not looking like the course and vicissitude of mining exploration will throw up too many hurdles for it to overcome.
It already has a history of success with its drill programs.
At Lake Mackay, diamond drilling was completed during the past quarter on the second phase of exploration on the Phreaker prospect. The hole was designed to intersect the mineralisation down-plunge and along strike from hole PRDD2202 that previously returned results of 5.6m @ 0.23% Cu, 0.35% Zn, 1.2g/t Ag and 0.18g/t Au from 545m, including 0.45m @ 1.15% Cu, 1.08% Zn, 6.0g/t Ag and 0.2g/t Au from 547.25m; 5.7m @ 0.35g/t Au from 396.9m; 1.0m @ 0.54g/t Au from 391m; and 0.4m @ 2.59g/t Au from 368.5m.
The Boco North RC drilling program involves 20 RC holes through the non-prospective sedimentary cover sequence, targeting potential mineralisation related to the regional scale Suplejack Shear Zone that is interpreted to occur below the overlying sediments.
This program is an ‘exciting opportunity’ to test the gold potential within the regional Suplejack Shear Zone structure
This program is an ‘exciting opportunity’ to test the gold potential within the regional Suplejack Shear Zone structure, which hosts several known gold occurrences including the Groundrush Gold Deposit to the south (resources of 10.7Mt @ 3.3g/t Au for 1.13Moz of Au) and the Crusade Gold Deposit to the north (resources of 1.4Mt @ 2.6g/t Au for 119,000oz), both part of the Central Tanami Project Joint Venture between Tanami Gold NL (ASX:TAM) and Northern Star Resources (ASX:NST).
The Tregony deposit is hosted around the contact in the sandstones and siltstones of the Killi Killi Formation of the Tanami Group. Meanwhile, the Hyperion mineral resource is located about 20km south of the Tregony prospect along the same regional Suplejack Shear Zone structure that hosts both the Tregony and Boco North prospects.
As Edwards mentioned earlier, the Suplejack Shear Zone is a key focus for Prodigy Gold’s exploration activities in the early part of the year, including drilling in close proximity to the 310,000 ounces of gold hosted at Hyperion to identify potential extensions to the known mineralisation.
“A lot of work is still required to understand all the potential we have with our portfolio and there are some questions we need to answer. But with committed support of our shareholders, like APAC, access to capital, and a clearly defined exploration program, we really are looking like a prodigy among junior exploration companies.”
Write to Adam Orlando at Mining.com.au
Images: Prodigy Gold Ltd