Standing looking at the drilling and mineralisation trends of the Lake Austin Gold Project in WA, I was trying to remember what is so familiar about this place. I kept looking for something familiar, and I can see the words, Lena Shear, but I kept thinking I know this place.
I was intrigued by this Lake Austin Gold Project. The fundamentals that I had seen had, indeed, perked my curiosity. I started talking to management to learn the story. I told them that I know the Tuckabianna project and I had walked all around the project in another career path. This Lake Austin Gold Project seemed to remind me of something southeast of Cue or southeast of Mount Magnet.
The Lake Austin Gold Project is within a 30-kilometre radius from the township of Cue. The mining town of Cue is about 650 kilometres NNE from Perth, Western Australia (Figure 2). As many would know, Cue is no stranger to mining. This Murchison region is one of the most endowed goldfields in Western Australia with gold mines producing in multiple of millions of ounces.
Figure 1: Gold nuggets discovered in the Cue region.
The mining complex of Mount Magnet, Cue and Meekatharra has been active for decades, especially in the 1990s. I was informed by 'experts' that the gold nuggets you find in the Murchison are cleaner and purer, but I don’t know how much is myth or truth.
In 2008, when I was making my first trip as Exploration Manager for Silverlake Resources Limited (ASX:SLR), I met a prospector who had these nuggets shown in Figure 1. He told me the story about how Murchison gold is the best, and I guess it must be true. Don’t all prospectors know everything …
I came to know about Musgrave Minerals Ltd (ASX:MGV) when I attended a presentation in Perth organised by Cannings Purple several weeks ago. Hence when I participated at the RIU Conference in Sydney in May 2019, I was keen to catch up and get an update on the projects.
Figure 2: Project Location Plan (source: MGV).
After the initial presentation in Perth, I felt that this Lake Austin Gold Project had a lot of promise. These big intercepts were worthy of being a discovery. I don’t doubt that there is a big story here, but I was just conscious of the grades. They were not too shallow, also, which was my main concern.
When I talked to Musgrave in more detail, I realised that although my initial concerns were valid, what I was learning is that we could be dealing with a much bigger system.
The real light bulb moment for me came just a few days ago. I realised why this place was so familiar. This Break of Day project was the old Moyagee project from my days at Silverlake. When I realised this and knowing the discovery to date, I was suddenly very optimistic about the project. So much so that I started doing some Samso-style research. This also explained how Silverlake became a significant shareholder.
Close to Infrastructure
In terms of logistics, the project is proximal to many operating mills (Figure 3). Hence, one can pretty much say that they would look at toll treatment when they get to a mining scenario. There are a lot of choices, and if they find more ore, I am sure the other mills will all be chasing them for business. However, drilling may later show the economics to build their mill closer to the action.
Figure 3: Producing mills that are close to the Cue Project (source: MGV).
According to the presentation given at the RIU conference in Sydney, the district has over 20 million ounces of historical gold production. The primary gold system at Cue is over 28 kilometres in length/strike.
The upsell of the Lake Austin Gold Project is the possibility that it could be a Great Fingall lookalike (Figure 4). I think they are probably not too far from that theory and creating a legacy of their own. One cannot have this amount of good results and not go down the road of production or at least produce an excellent resource scenario.
Figure 4: Gold Mineralisation potential of the Cue Project (source: MGV).
Break of Day and Lena gold projects
These are the Moyagee projects from Silverlake Resources, and it is good to see that the thinking from back then has been followed up. In my time there, we were going to drill that area, but circumstances prevented that from happening.
The resource was already there, and I guess the drilling that Musgrave completed proved that the system was in place and there were more legs to the story. The new drilling proved that the mineralisation did indeed go more in-depth, but I don’t think this is going to make the custard. There is not enough width, and the grades are not spectacular (Figure 5).
Figure 5: Summary of Break of Day and Lena Gold Deposit (source: MGV).
The numbers show some promise, but I think there is just not enough work done and with the discovery of the Lake Austin Gold Project, I can’t see management diverting money to this project.
As I mentioned, what this does show is that the system is mineralised and I think the potential of a separate ‘district’ is very high.
I do believe that the potential shown in Figure 4 is not a pipe dream. I remember when I was at Silverlake, I liked the Lena Shear system. I felt that it is consistent and the system has the potential to be part of a bigger, more endowed metallic system. I did think that the management at that time was more interested in Daisy Milano and rightly so as the mishap at the Lakewood mill nearly took them underwater six months from raising $30 million from the IPO.
I am glad that the recent drilling from Musgrave has shown that I was correct and the discovery of Lake Austin Gold Project in potentially the same system is even more exciting. This system may be sparked by the Break of Day/Lena Shear System.
Lake Austin Gold Project
The Lake Austin Gold Project has all the hallmarks of a great future mining project. The recent drilling results have been pretty spectacular. The presentation slide (Figure 6) showing all the recent intercepts is fantastic and has some good length to the intercepts. They are very encouraging, and one would have good reasons to think that this could be early signs for duplicating the Great Fingall deposit.
This potential that management is hoping for may not be all myth after all. Asking me would be biased as I am always an optimist and an exploration geologist. We still think there is a pot of gold at the end of every rainbow … eventually.
Figure 6: Summary of results from the Lake Austin gold project (source: MGV).
Looking at the other announced results in Figure 7, it does give one a clearer understanding of the potential. The mineralisation of 242 metres at 1 g/t is fantastic, as there is a high grade of 45 metres at 3.3 g/t.
As I have mentioned in previous articles, intercepts of 242, 84 and 94 metres are lengths of drill intercepts that make mines. The grades may not be high enough to excite, but you have to understand the mix of high grade and lower grade components of the deposit.
The challenge for the company will now be to drill this out and hope that they come up with a decent resource and reflecting a suitable grade. There does look like a consistent link to the trend heading in a north-eastern orientation.
I can’t help but think that the Lake Austin Gold Project is the confirmation from Break of Day and Lena. Subsequently, I feel that the Mainland project could be the confirmation from Lake Austin. All they need to do now is drill and drill and drill.
Figure 7: Summary of results from the Lake Austin gold project (source: MGV).
When you look at the diagrams within Figure 6 and Figure 7, one can see the potential of a mineralised belt happening. This structural splay coming off that central north-south shear zone could be what Musgrave needs to make their 'Great Fingall' theory come alive.
The gravity data show observable targets and good correlation to the orientation of mineralisation and a structural corridor.
Musgrave Minerals has got themselves a project that continues to uncover more ounces. This project reminds me of the discovery that started from a small intercept to one of the most well-known salt lakes.
Lake Lefroy in the Kambalda area has one of the most metalliferous endowed salt lake systems. Figure 8 shows the discovery around Lake Lefroy over 40 years of activity. The development of Invincible was the latest, but that also took several years due mainly to not recognising the importance of early exploration results.
Figure 8: Plan of gold mines around Lake Lefroy (source: Goldfields – Invincible Presentation 2014).
The discovery of Invincible in 2012/2014 is active in my mind as that was a 1.3-million-ounce discovery in an area that you would have thought had been thoroughly drilled out.
To me, Musgrave could be onto something that could make them a producer or a takeover target. Thick intercepts and decent grades are the right combinations of a good story that would attract corporate activities with the gold price continuing to rise up the charts.
What could make this come a cropper would be running out of money. Musgrave has strong shareholders, Westgold is a major shareholder and they would be the first to benefit if Musgrave defines a workable resource as the nearest toll treating avenue is their Tuckabianna Mill.
Apart from a lack of funding, I don’t think there is anything else that could make this a lemon. Even a chinaman geologist like me could make myself a hero from here … maybe.
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