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Kingwest Resources gets ready to drill after $8 million Menzies gold acquisition

Shareholders in agreed to the acquisition of the high-grade exploration project in a recent vote.

Kingwest Resources Ltd - Kingwest Resources gets ready to drill after $8 million Menzies gold acquisition
Gold is Kingwest's focus
  • The purchase price for the Menzies Gold Project in Western Australia was $8 million in cash and shares. 
  • A 26-hole 6,500-metre drilling program will get underway this month to test high-grade extensions to five of the project’s highest priority targets. 
  • The initial drill testing will take in the Yunndaga, Lady Shenton, Pericles, Selkirk and Lady Irene targets. 
  • Menzies project is found on one of the highest grading fields in WA, where at least 800,000 ounces grading 19 g/t gold was historically produced. 
  • Historical production included 650,000 ounces grading 22.5 g/t from historical underground resources. 
  • Kingwest believes high-grade and high-margin gold from the project could reduce investment risk and offer growth potential. 
  • Bank of Novia Scotia is an investor and upped its stake in Kingwest to 8.78% last Friday after previously holding a 6.1% voting stake.

Menzies is one of WA’s original large-scale and high-grade gold camps. Modern work missed underground opportunities (and the project) can deliver quick results — numerous high-grade lodes to follow up and drill targets to test.

Kingwest Resources investor presentation, September 2019

What does Kingwest Resources do?

Kingwest Resources Ltd (ASX:KWR) is an Australian gold explorer that was added to the Australian Securities Exchange in August 2018.

The Perth company is primarily focused on gold projects in Western Australia’s Eastern Goldfields subregion.

Kingwest’s exploration assets now include the Menzies project.

Who leads Kingwest Resources?

The company is led by chief executive officer Ed Turner, a geologist with more than 30 years’ mining industry experience.

Turner was previously the CEO of Galena Mining Ltd (ASX:G1A) (FRA:GM6), where he delineated the high-grade Abra lead-silver deposit.

The EJ Turner Consulting geologist’s expertise lies in exploration, underground mining, resource estimation, feasibility study and development work.

He has worked with a variety of minerals across the world, including gold and precious metals, base metals, and speciality metals.

What does Kingwest Resources own?

A key asset is the newly-acquired Menzies Gold Project which surrounds the tiny town it is named for, Menzies in Western Australia.

The wholly-owned project is 120 kilometres north of Kalgoorlie and 100 kilometres south of Leonora on sealed roads near amenities such as water, power and established processing plants.

Menzies project features granted mining leases and prospecting licences.

Kingwest views the project it picked up from Horizon Minerals Ltd (ASX:HRZ) as a chance to enter the market as a producer while shelling out minimal capital expenditure.

Horizon is a relatively new name on the ASX, having been formed mid-year with a merger of the original Menzies owner Intermin Resources Limited (ASX:IRC) and MacPhersons Resources Ltd.

The company’s Menzies buy price from Horizon was $8 million in cash and shares, with Kingwest seeing a base of valuation being supported by the current values of JORC open pit resources.

Total resources at Menzies project are 2.42 million tonnes grading 2.2 g/t gold for 171,310 ounces.

These resources are made up of indicated and inferred resources from the project’s Yunndaga, Pericles, Bellenger and Warrior deposits.

What targets will Kingwest Resources drill?

A 26-hole 6,500-metre drilling program will start at the project in the next few weeks as the company aims to test high-grade extensions to the project’s highest priority targets.

The five targets for drill testing are the Yunndaga, Lady Shenton, Pericles, Selkirk and Lady Irene targets.

Yunndaga was historically mined in the 1800s and 1900s.

Historical underground production between 1896 and 1943 produced 271,000 ounces grading 16 g/t gold before a further 64,000 ounces grading 2.5 g/t was mined in the 1990s.

An open pit resource for the target sits at 103,000 ounces grading 2.0 g/t.

Lady Shenton pit’s underground resources delivered 191,000 ounces grading 32 g/t between 1896 and 1939 before the mine’s closure in 1943 due to World War II.

The Lady Shenton open cut then historically produced 30,350 ounces grading 2.7 g/t between 1995 and 1999.

Pericles has no historical mine production figures but two lodes along strike north of Lady Shenton feature a 530,000-tonne resource grading 2.5 g/t for 42,500 ounces. The lodes are open at depth.

Selkirk underground production delivered 3,700 ounces grading 24.0 g/t between 1896 and 1939.

The Selkirk open pit then produced 6,249 ounces grading 4.6 g/t in the 1990s.

Drill highlights from beneath the Selkirk open cut in more recent times have produced intersections such as 3 metres grading 74.56 g/t and 2 metres grading 12.65 g/t.

Lady Irene satellite deposit produced 6,502 ounces grading 4.77 g/t to 34-metre depth in the 1990s.

Recent drilling beneath open cuts has produced wide intersections as 39.3 metres grading 4.27 g/t from 159 metres, including 12 metres at 7.68 g/t from 124 metres.

What other projects are in Kingwest Resources’ portfolio

Kingwest picked up a package of Goldfields tenements with its August 2018 initial public offering.

These included all the assets involved with the acquisition of Roman Kings Limited, now Roman Kings Pty Ltd, which form part of its Leonora projects.

The named Leonora projects include Emperor Gold Project, the 75%-held Crawford and Gambier Lass North projects and the Roman Well, Greymare Well, Big Well, King of the West and Northern Wells projects.

Goongarrie Gold Project is another asset in Kingwest’s armour and is 100 kilometres north of Kalgoorlie on the Goldfields Highway.

Inflection points

  • First results from the Menzies drilling campaign
  • Notable gold mineralisation seen during drilling
  • Final intersections for high-priority targets
  • Key milestones
  • Funding and asset backing
  • Gold industry sentiment and WA market support

Quick facts: Kingwest Resources Ltd

Price: 0.2 AUD

ASX:KWR
Market: ASX
Market Cap: $20.12 m
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Full interview: Kingwest Resources continues to hit high-grade gold at Menzies

Kingwest Resources Ltd (ASX:KWR) chief executive officer Ed Turner speaks to Proactive about continued high-grade gold discoveries at the Menzies Gold Project in Western Australia.  Turner said the company had completed more than 7,000 metres of diamond core drilling at Lady Shenton and...

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