Aurumin Ltd (ASX:AUN) joint venture (JV) and earn-in partner Kula Gold Ltd (ASX:KGD) has begun a diamond drilling program at the Mt Palmer Gold Mine in Western Australia, drilling beneath the historical resource to hunt for high-grade gold left unmined by previous operations.
The company plans to drill 320 metres over three existing reverse circulation (RC) drilling collars, pre-collared to between 102 and 156 metres of depth.
Kula currently holds a 51% interest in the Mt Palmer Project, intending to earn up to an 80% interest in the asset via exploration expenditure.
Contractor Terra Drilling has also agreed to provide services in return for equity funding for any additional diamond core holes drilled beyond the original three planned.
Strong gold price provides opportunity
“This is an exciting next phase in our first round of our maiden drilling program at Mt Palmer,” Kula Gold managing director Ric Dawson said.
“This historically rich ‘half ounce’ gold mine is now ready for this next stage of the drilling program with the diamond drilling planned to test below the production stopped by 1944 exodus of miners due to World War 2 and never re-opened.
“Historical data reviewed by Kula’s technical team shows solid targets for high-grade gold mineralisation extending below 160 metres, the past mining level, shallow by today’s modern operating practices.
“With the current gold price over US$2,500/ounce (A$3,800), this is an opportune time for Kula to be exploring and advancing a previously producing high-grade gold mine whilst other ASX listed high grade gold developers are being fully appreciated with significant market capitalisations.
“This acquisition aligns with the company’s strategy to explore near to existing operations to fast track any discovery to monetary success.”
Mt Palmer sits just 15 kilometres from the Marvel Loch gold plant and its infrastructure, and about 90 kilometres from the Edna May gold plant, offering cost-effective options for processing and hauling should an economical discovery be made.