Kingwest Resources Ltd (ASX:KWR) is higher after an updated resource estimate for Lady Shenton deposit and a maiden estimate for the Stirling deposit increased overall resources at its Menzies Gold Project (MGP) by 37% to 320,000 ounces.
Drilling in 2020 has extended high-grade mineralisation at depth as well as added 85,000 ounces to the MGP total resource estimates and the resource has increased by 87% since the company acquired the project in September 2019.
Kingwest chief executive officer Ed Turner said: “We are very pleased to continue to increase our near-surface gold resources at Menzies whilst at the same time we explore for higher-grade resources at depth, along strike from and between these near-surface deposits.”
The Menzies-Goongarrie combined resource total is now greater than 340,000 ounces.
Shares have been as much as 20% higher to 18 cents.
Lady Shenton System
The Lady Shenton System comprising Lady Shenton, Stirling and Pericles deposits delivered very high-grade production of 185,000 tonnes at 32 g/t for 191,000 ounces prior to 1946 and then later open pit mining in the 1990s which produced 349,000 tonnes at 2.7 g/t for 30,300 ounces.
Extensions of this mineralisation extend at depth and are repeated adjacent to the main workings, with Pericles and Stirling discovered since completion of open pit mining in the 1990s.
The updated estimate for Lady Shenton is 791,000 tonnes at 2.6 g/t for 64,700 ounces and the estimate for the Stirling lode is 313,000 tonnes at 2.2 g/t for 21,900 ounces.
Along with the Pericles estimate of 1.4 million tonnes at 1.8 g/t for 79,500 ounces, this brings combined resources for the Lady Shenton System to 166,100 ounces.
Aerial view showing the main mineralised systems as well as the Lady Shenton and Stirling resource locations.
Kingwest is planning further drilling with the objective of adding further increases to the size and confidence levels of the estimates in 2020, with all Lady Shenton lodes currently classified as inferred.
In addition, pit optimisation and economic studies are underway for all of the Menzies resources with open pit mining methods and conventional CIL/CIP processing assumed.
Turner said: “We are now in a position to advance towards scoping studies in the second half of 2020 as we recently did at Goongarrie Lady and investigate the best pathway towards economic production of these deposits.”